Given the current economic turmoil occurring in America lately, unemployment is at an all time high, jobs are scarce, and people are more stressed about finances than any other time in recent memory. To add fuel to this already growing financial inferno, while the times were good, we did what Americans do best: spend money! And when Americans spend money, we’re talking credit, and lots of it!
Chapter 1. The Honeymoon Is Over
So now that you may be out of a job, bills are stacking up, and your phone is starting to ring incessantly with collectors wanting their money, here’s what you need to know.
Chapter 2. You Have Rights
In 1977, The Fair Debt Collection Practices Act (FDCPA) was made to be law. Prior to the passing of this law, creditors could do pretty much anything they wanted in order to collect a debt. This law levels the playing field, so now you, the consumer, have rights to protect yourself from unscrupulous bill collectors.
Chapter 3. What Collectors May Not Do
- They may only contact you between the hours of 8am to 9pm.
- If you ask for their information, they must give it to you.
- They cannot say they are a government representative.
- Any communications they send via mail cannot indicate it is from a debt collector.
- If they call friends or family to try and locate you, they cannot indicate they are a debt collector or that a debt is owed.
- They may not indicate they will take legal action if, in fact, they are not prepared to do so.
- They may not threaten you, swear at you, or harass you.
- There are many, many other protections you have under the FDCPA.
Chapter 4. What You Should Do
If you are receiving calls from debt collectors, make sure you keep notes of who calls and at what times. Take down company and representative names and phone numbers. If you have the ability to actually record the conversation, this would be optimal. If you feel threatened or harassed, make notes regarding what was said.
Try to only communicate with collectors via written correspondence. Always keep a copy of everything they send to you and what you send to them.
If you feel the debt is not valid or justified send them a “debt validation letter.” The following is a great example of a debt validation letter.
RE: Account/Reference Number
In accordance with my rights under the Fair Debt Collection Practices Act (FDCPA), I am hereby requesting formal validation of the alleged debt you are reporting to the major credit reporting agencies on my behalf. Note that I am not requesting a simple account summary. Rather, you should forward the following expeditiously:
1. Validation that the alleged debt was established, including a signed application for credit or services.
2. Formal certification that the alleged debt was transferred to a third-party.
3. Notarization regarding the alleged debt’s profit and loss (P&L) application to federal or state tax write-off.
4. A complete monthly accounting history from the alleged debt’s inception through the present date, including any alleged charges, penalties, service charges, and payments, as well as a certified attestation regarding current status.
5. Documentation regarding your company’s compliance, including applicable bond regarding debt collection laws in the state of _____.
I will look forward to receiving the requested documentation so that this matter will not escalate further. Otherwise, you are prevented from reporting this account to the consumer reporting agencies. Any further reporting is in violation of the Fair Debt Collection Practices Act (FDCPA) Sec. 809(b) 15 USC 1692g.
If the collector cannot prove the debt is valid, they cannot collect on it or report it to the credit bureaus. It is their job to prove and validate the debt.
If you do feel you have been abused by a debt collector, you need to report it to your state Attorney General office and to the Federal Trade Commission www.ftc.gov who enforces the violation of these laws.
I hope that after knowing more of your consumer rights, you will no longer fear the debt collection calls, you will have the confidence in knowing how to protect yourself and your consumer rights.