Each year, the Federal Trade Commission receives hundreds of thousands of complaints against debt collectors – third parties that collect debts for banks and other companies. The number of complaints is a clear signal that debt collectors do not always follow the rules when it comes to communicating with consumers. Knowing your rights when dealing with collection agencies can help you decide whether or not you want to deal with collection agencies. If a debt collection agency is pressuring you to pay, here are some key questions you should answer first.
Do you know what a debt collection agency is?
When banks and other companies have difficulty collecting payments from debtors, they hire a debt collection agency to collect the debt. Whatever actions the collection agencies choose to take to pursue the debt, they must always comply with the Fair Debt Collection Practices Act.
Does the collector contact you at permitted times?
The Federal Trade Commission receives hundreds of complaints about collectors contacting consumers outside of permitted times. There may be more instances of such illegal contacts; consumers may not have filed complaints with the Federal Trade Commission regarding them. Collection agencies can only contact you during specific hours of the day – between 8 a.m. and 9 p.m. local time. If the collector calls you outside of these times, they are violating the Fair Debt Collection Practices Act.
Do you want the collector to stop contacting you?
You have the right to stop debt collection contacts. But a phone request is not enough. For a collector to stop contacting you, you must submit your request in writing. Send a cease and desist letter instructing the collector not to contact you. Remember that a cease and desist letter only works for that specific collector. You will need to send a separate letter to each collection agency that contacts you. Sending your letter via certified mail allows you to track the letter to ensure that the debt collector has received it. If the debt collector continues to contact you after receiving your cease and desist letter, they are violating the Fair Debt Collection Practices Act.
Is this your debt?
Do not assume that a debt belongs to you simply because a debt collector says so. The Consumer Financial Protection Bureau states that one of the most common complaints about debt collectors is that they are collecting the wrong debts from the wrong person. You have the right to ask a debt collector to verify that the debt is really yours and that they have the right to collect it. They must provide some form of documentation from the original creditor. If the collector cannot provide proof, they cannot collect the amount from you. You only have a limited time to exercise this right, so send your verification request as soon as possible after the debt collector contacts you for the first time.
Has the statute of limitations expired?
The statute of limitations is the period during which a debt collector can legally sue you for an unpaid debt. The statute of limitations varies from state to state and typically ranges from three to six years. Debt collectors may try to sue you even if the statute of limitations has expired, but you must prove in court that the time allowed to file a lawsuit has passed in order to dismiss the case.
Has the collector violated your rights?
There are many things that debt collectors cannot do. For example, they cannot ask you to pay an amount greater than what is owed. If a debt collector has violated your rights, you can sue them for actual damages plus $1,000 in punitive damages.
Have you…
Should you pay the debt?
If the debt is old (for example, more than seven years), you might forget about it. After all, the statute of limitations and the credit reporting period may have expired. There are also moral obligations you should consider. Paying what you owe is the right thing to do.
Can you remove the debt from your credit report?
If the collection appears on your credit report, it’s best for your credit score to have it removed. Some collection agencies may agree to delete the collection in exchange for payment. Some may insist on keeping the collection on your report. When you are able to convince the collector to remove the entry from your credit report, make sure to get the agreement in writing. That way, you can force the collector to stick to their side of the bargain.
Thank you for reading this article. We hope it has provided you with valuable information on dealing with collection agencies. If you have any further questions, please don’t hesitate to ask.
Source: https://www.thebalancemoney.com/questions-before-paying-collection-960570
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