Know Your Rights

Know Who Is Calling To Collect Your Debt

For many of us, when a debt collector begins calling to collect on a debt it usually is no surprise.  Most consumers are aware of their finances and their inability to make payments.  When the collection calls begin it most often means your debt has not been paid in quite some time and a collector has every intention of forcing you to make payment.  The collector is savvy, and has a lot of tools at his or her disposal to coerce you to make a payment, whether you are ready and able, or not. Knowing your rights under the Fair Debt Collection Practices Act ("FDCPA") will protect you from being taken advantage of.   

When communicating with collectors, it is important to understand what type of collector is contacting you so you can respond accordingly.  There are three different types of collectors: collection departments of the creditor, third party or contracted debt collectors and debt buyers.  A clear understanding of who you are communicating with will allow you to gain the upper hand during debt negotiation and ensure you are not being taken advantage of.

Type 1:  Collection Departments
When first contacted by a debt collector the initial communication often comes from an agent from a collection department.  For example, if you default on a store credit card, the collection department from the credit card company or the store will contact you in an effort to receive payment.  This type of collector will usually treat you like a client as they want to work out payment, while still holding on to your business.  Collectors who work in house for a store or credit card company are usually less forceful and more likely to negotiate a payment plan.   That is, until the account is "charged off".  While most creditors will not still be collecting their own debts at the time the account is charged off, some still will on occasion.  The trouble is that the FDCPA does not apply to the original creditors, and therefore, this caller will get away with some of the harassment and abuses that debt collection agencies will not. 

Type 2:  Third Party or Contracted Debt Collectors
After payment is not received and the creditor charges off the debt, companies often hire an outside collection agency to do their dirty work.  In this situation, the original creditor holds onto ownership of the debt and hires a collection agency to go after you for payment.  This type of collector is contracted for their work and most often only get paid a percentage of what they collect if they are successful.  These collectors are more aggressive.  However, the FDCPA does apply to them in every way, and as they tend to be more aggressive, they are more likely to violate the law under the FDCPA because they only get paid when you pay. 

Type 3:  Debt Buyers
Debt buyers most often purchase old debt for pennies on the dollar that are considered uncollectable because they are either passed the statute of limitations or a previous collector's efforts were unsuccessful.  If you know that your debt is passed the statute of limitations and you can no longer be sued for payment, make sure this type of collector does not trick you into making a payment.  Making a payment, even a small one, can revive or bring the debt back to life when you would otherwise not have been responsible.    While debt buyers themselves are often also collectors, many debt buyers will hire out yet another collection agency to perform the collection work.  Thus, to truly understand who is the owner and who is the collector, read the letters that they send you thoroughly.  They will disclose who the current creditor is.  If it is a different company from whom you originally had credit with, you know that the debt was bought.  If that current creditor is a different company than who is contacting you, you know the debt was bought and then assigned. 

If you are being contacted by a debt collector and feel your rights may have been violated under the FDCPA, contact SmithMarco P.C. for a free case review.

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