As a consumer, you agree with a company, credit card lender, or other organization to repay a debt. When you make that agreement, you enter into a legal contract that you are responsible for repaying. However, U.S. law requires that you not only repay that debt as you promised but that the lender has the right to seek out repayment from you in various other terms should you not follow through.
They do this through debt collection. No one likes to deal with a debt collector, but that may occur if you fall behind on debts. At the same time, debt collectors must follow specific rules and regulations when reporting that debt, contacting you, and collecting on it.
Knowing Your Debt Collection Rights
U.S. law puts in place particular strategies that debt collectors must follow when collecting a debt. Most organizations do so, but you should know what these rules are. And, if you feel they are violating those rules, you should take steps to report the agency.
The Fair Debt Collection Practices Act (FDCPA)
Most of the laws that apply to debt collection fall under the Fair Debt Collection Practices Act. It's a good idea to read the law yourself on the FTC website, found here. However, here are some of the most impactful components of the FDCPA:
Debt collections must follow these rules:
- They cannot contact you before 8 am or after 9 pm your time unless you tell them to do so.
- They cannot contact you at work if you tell the debt collector you cannot get calls at your place of business.
- They cannot email or text you if you tell them not to.
- They cannot call more than seven times during a 70-day period or within seven days after talking to you about a specific debt.
- Debt collections cannot send your messages on social media if you ask them not to.
- They must provide you with information to validate the debt, including their name, mailing address, the creditor you owe money to, how much you owe, what you can do if you do not think you owe the funds, and all of your debt collection rights – if you ask for this information.
- Debt collectors cannot contact anyone else about your debt outside your spouse. They can talk to your attorney about your debt if you confirm that the attorney can speak to them.
Debt Collectors Do's and Don'ts
When dealing with a debt collector, there are several things you can do to protect yourself. The critical risk here is that sometimes people will try to scam you – claim that you owe money that you do not. Keep these factors in mind:
- Don't confirm the debt with the debt collector yourself. Ask them to prove to you what you owe. Ask for a letter to be mailed to you that outlines what you owe.
- Do talk to the debt collector at least one time. Even if you don't think you owe the debt, it will help you to ensure that you verify the information. That also allows you to confirm if the debt is accurate or not.
- Do request validation of the debt you owe within 30 days of receiving notice of the debt. Do so in writing.
- Make the debt collector treat you fairly – they cannot lie, harass you, or try to threaten you.
Disputing a Debt
As noted, you shouldn't simply agree to pay the debt or even state that it is yours unless you are sure that's the case. If you believe the debt is in error, dispute it. As noted, you should request that the debt is valid. The debt collector then must send you information to tell you the debt is valid – including a breakdown of what you owe, interest, and what's not.
It is crucial to send them a certified letter outlining that you do not believe the debt is yours. You may also pursue support from an attorney throughout this process if the lender continues to contact you.
Protecting Your Credit Score
In some situations, you may find that you owe the debt and that the debt collector has taken action to report that debt to the national credit bureaus. That can hurt your credit score.
Check your credit report.
- If you see that your debt is not listed, that's a good thing. Contact the debt collector to arrange to pay the debt on time or as agreed.
- If there's a notice on your credit report about the debt, dispute it with the credit bureaus. The credit bureau will require the debt collector to prove that the debt is valid, and they will remove it if they cannot.
Seeking Legal Help
In some situations, debt collectors use unlawful actions to collect debts. If they do so, that does not mean that you don't have to pay it. However, you should seek the help of a debt counselor or a debt attorney who can help you resolve the matter. That may include reporting their actions to the FTC as illegal. The FTC has the authority to fine them related to their actions.