Know Your Rights

What The Debt Collector Is Not Telling You

Complaints from consumers about debt collection tactics are at their highest levels in history.  Many Americans are feeling the heat of debt collection calls.  But in those calls there are things that the collector won't let you know and surely won't tell you.  Here are 6 items:

1.  They really don't intend on suing you.
Many consumers complain that collectors call them on the phone and make threats to file a lawsuit.  If that threat comes from a debt collection attorney, then perhaps this statement could be a true statement if the attorney was hired to file the lawsuit by the company that actually owns the debt.   However, in most situations, this is not true.  What the collection agency is not telling you is that they actually have no say in whether a lawsuit could or should be filed.  That decision is to be made by an attorney that has reviewed the file.  That collection agency may refer the matter to an attorney, but the collection agency say-so on whether the consumer will be sued ends right there.

2. They really have to stop calling at work if they are advised you cannot receive calls there.
Once a debt collector has any knowledge that a consumer cannot receive these calls at work, the collector is no longer permitted to attempt to call the person at their workplace.  The Fair Debt Collection Practices Act is very clear on this point.  Moreover, this notice does not have to come in any particular form.  It can simple be told to the collector calling.

3. They cannot tell others, including your human resources department, about your debt.
A common complaint we hear is that collectors are telling people that they will contact their human resources department at work.  Seemingly, this is to make one think about a possible pending garnishment.  While a collector can make contact for the sole purpose of setting up a garnishment where there is an immediate right to such garnishment, any other contact is prohibited by the FDCPA.  If the collector does not have a judgment against a consumer, than any contact with a third party is governed by the mandates of the FDCPA, and any disclosure of the debt being owed is prohibited. 

4.  Your debt may be too old to actually do anything about it.
Most debts, such as credit cards or auto loans, are made from a contract.  When a creditor is not being paid, the ultimate tool they have is the use of the court systems to file a breach of contract case against the consumer.  However, every state has a limit on how long a creditor has to assert a claim for a breach of contract.  This is known as the Statute of Limitations.  Once the statute of limitations passes, the collector is without the use of the court systems and cannot obtain a judgment for the money.  Another collection tool they like to use is credit reporting the debt.  Having negative collections on one's credit report could propel one to pay the debt off.  However, there is a limit of time with which a debt can be reported on a consumer's credit report.  Once these dates pass, the collector is without any power whatsoever.  Sure, they legally can try to collect the debt, by using other persuasive techniques.  However, without the use of the courts or credit reporting, much of their power is gone.

5.  Debt collectors are under as much pressure to collect as you are to pay.
Most debt collectors earn their pay on a commission basis.  That is, they only get paid when they make you pay, and they only get a small percentage of what they recover for their boss.   If a debt collector is not convincing enough, they are not going to make any money for themselves.  This explains the aggressiveness.   Also, the collectors only have a limited time to obtain payment before the account is taken back by the creditor and given to another.   If they don't get you to pay in that short period of time, then they are not going to be able to pay their own bills.  

6.  Paying off a debt will not help your credit rating.
If a debt is being reported to the credit bureaus by a debt collector, is has a great effect on your credit rating.  Just its existence alone is harmful regardless if it is being reported as paid or unpaid.  Making that payment will not take the collection off your report.  It will still be seen and still cause significant harm. 

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