Educational Consumer Tips

Debt Collection

Author: Better Business Bureau
Published:

 Better Business Bureau and the Federal Trade Commission offer the following information on fair collection practices:

The Federal Trade Commission (FTC) enforces the Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices to collect from you.

Under the FDCPA, a debt collector is someone who regularly collects debts owed to others. This includes collection agencies, lawyers who collect debts on a regular basis and companies that buy delinquent debts and then try to collect.

New York State also has specific regulations for debt collectors. 

Contact 

Debt collectors may not contact you before 8:00 a.m. or after 9:00 p.m., unless you agree to alternative times. They may contact you in person, by mail, telephone, telegram, or fax; however, they may NOT contact you by postcard. 

Consumers can communicate with collectors via their personal email if they so choose. This may help to reduce the number of phone calls and allow consumers to maintain better records of their interactions with debt collectors. If a consumer wants email communication, they must put it in writing to the debt collection agency.

You may stop a collections agency from contacting you at work by sending a registered or certified letter with the request. Once the agency receives your letter, it may not contact you again except to say there will be no further contact, or to notify you if they intend to take a specific action. 

If you are represented by an attorney, debt collectors may not contact anyone other than your attorney. If you do not have an attorney, collectors may contact other people, but only to find out where you live and work. In most cases, collectors may not contact such permissible parties more than once and cannot reveal to anyone other than you or your attorney that you owe money. 

Validation of Debt 

Within five days after you are first contacted, collectors must:

· Send a written notice telling you the amount of money you owe, 
· The name of the creditor that you owe the money to, 
· What action to take if you believe you do not owe the money. 
· If you believe the company contacted you in error, you must write within 30 days after the initial contact; upon receipt of your letter, the company must cease collection activities. 
· If the company can provide proof of the debt such as a copy of a bill for the amount owed, the company may renew collection proceedings. 
· Some debt collectors may try to collect on debts for which the statute of limitations has already expired. 

If a collector attempts to collect on a debt for which the statute of limitations has expired, prior to accepting payment, the collector must provide notice that they believe the statute of limitations may be expired and that, if the consumer is sued on such a debt, the consumer may be able to prevent a judgment by informing the court that the statute of limitations has expired. 

Even if the statute of limitations has expired, people may choose to make payments on the debt. However, be aware: if you make a payment on the debt, admit to owing the debt, promise to pay the debt, or waive the statute of limitations on the debt, the time period in which the debt is enforceable in court may start again.

You may also request debt substantiation at any time during the collections process. This will empower the many consumers who do not exercise their right to verification under the Fair Debt Collection Practices Act within the short 30-day window. 

Once a debt collector receives a substantiation request, the debt collector must cease collection and provide documentation proving the validity of the debt and the creditor’s right to collect that debt within 60 days. 

The debt collector must provide general information on the rights of debtors and, for charged-off debts, specific information about the debt that they are attempting to collect. 

These disclosures go beyond current federal requirements, ensuring that collectors have key information about the charged-off debts they collect, such as the amount owed at charge-off, and the total post-charge-off interest, charges, and fees. 

As consumer debts may be sold and resold, this information will help combat fraud and debtor confusion by showing an alleged debtor where the debt originated and the total debt owed both at charge-off and after years of interest and fees were added.

If no debt is confirmed, contact any involved parties to clear up possible inaccuracies on your credit report, such as: the debt collector; the creditor or company claiming unresolved accounts; and the major credit bureaus. 

Prohibited Practices 

Debt collectors may not engage in unfair practices while attempting to collect a debt. For example, debt collectors may not: 
1. Use threats of violence or harm against the person, property, or reputation
2. Publish a list of consumers who refuse to pay their debts (except to a credit bureau)
3. Use obscene or profane language
4. Use phone calls to repeatedly harass you
5. Fail to identify themselves on the telephone as a debt collector
6. Advertise the debt
7. Indicate that actions such as a lawsuit will be taken against you, which legally may not be taken, or which they do not intend to take
8. Collect any amount greater than your debt, unless allowed by law
9. Take a payment arrangement prematurely
10. Use false, deceptive or misleading statements when collecting a debt.

If a creditor or debt collector receives a money judgment against you in court, state and federal laws may prevent the following types of income from being taken to pay the debt:

1. Supplemental security income, (SSI); 
2. Social security; 
3. Public assistance (welfare); 
4. Spousal support, maintenance (alimony) or child support; 
5. Unemployment benefits; 
6. Disability benefits; 
7. Workers’ compensation benefits; 
8. Public or private pensions; 
9. Veterans’ benefits; 
10. Federal student loans, federal student grants, and federal work study funds; and 
11. Ninety percent of your wages or salary earned in the last 60 days.

If a debt is confirmed and owed
Consumers will now receive written confirmation of any debt settlement agreement. Consumers will also receive written confirmation once a debt is satisfied. If another creditor attempts to collect that debt, consumers will have written documentation that the debt has been paid off. 

Ordering you free annual credit report
You will be required to disclose your Social Security number to obtain your credit report. If you print your credit report, make sure your Social Security number does not appear on the printed form.  

Contact: 
877-322-8228    
annualcreditreport.com              

For more information, contact: 
Better Business Bureau of Upstate New York
(800) 828-5000
bbb.org/upstate-new-york

Federal Trade Commission (FTC) 
(877) 382-4357 
ftc.gov 

If you believe a debt collector has violated the law, contact the Federal Trade Commission.