Your Rights Against Debt Collection Calls

I have been getting unwanted, sometimes abusive calls from a debt collection company. Why are they doing this?

Debt collectors can be pretty intimidating. But who are they? If you owe a creditor - such as a gym, utility company, or credit card company - a long-overdue bill, they may have contracted an independent or in-house collection agency to gather up any money you owe.

Sound a little creepy? Like Big Brother is watching you? It is - in the sense that unpaid dues can follow you around forever. The best way to get rid of it is to pay it off as soon as you can.

Independent agencies work by purchasing debts for less than they cost your original creditor, or by securing a fee or percentage of the debt money. For example, a collection agency might contract $100,000 USD of creditor for $25,000, knowing that their bill collectors will pursue and obtain about $70,000 of what is owed.

In-house agencies work directly on behalf of your creditor. When you pay the dues, both kinds of agencies get all or at least some of that money. Their incentive is simple: they want you to pay as soon as possible, so that they can earn their cut (1).

But I don't have any outstanding debts. Why is a dues collection agency contacting me?

In this case, you may be a victim of identity theft - when a thief gains access to your credit card(s) and/or bank account and uses your identity to make purchases, sometimes incurring fees and dues. Don't panic. Identity theft is a widespread problem that affects millions of Americans every year. Hearing from a collection agency is often the first clue that something has gone wrong.

If you suspect that you are a victim of identity theft, you should know that the Fair and Accurate Credit Transactions Act (FACTA; passed in 2004) requires collection agencies to take certain steps to help you.

First, they have to let the original creditor know that they are dealing with a case of identity theft. Second, they have to give you information about the fraudulent debt, such as account applications and statements, and transaction receipts. Ask the agency for copies of all of these, as well as a fraud affidavit form from them and from the original creditor - having hard copies will help you document and report the theft. For more information on what to do about identity theft, check out the websites listed below (2) (3).

I feel that a debt collection agency is harassing me. Are there any laws that protect my rights?

Debt collectors often sound like they're coming straight from the set of The Godfather, and the offer you can't refuse is pretty scary. You won't have to sleep with the fishes, though: the federal Fair Debt Collection Practices Act (FDCPA) provides guidelines for collection agencies and protects you from harassment (4).

Keep in mind, however, that the FDCPA only applies to agencies or individuals (such as lawyers) who gather debts for others. Creditors who gather their own debts, people who work directly for a property owner, and government officials (such as IRS workers) are not covered (5). Some states have laws that apply to these collectors or more specifically to independent collectors, so it's a good idea to check out your state's rules (6).

The FDCPA makes it illegal for collection agencies to harass you (7). Although agencies may call you before they send you written notice of your dues, they cannot:

1. use obscene or racist language
2. insult you
3. call you before 8am or after 9pm
4. call you at work if they know you are not allowed to take personal calls there
5. call you repeatedly in order to harass you
6. force you to pay for collect calls
7. lie to you about who they are or the amount of money that you owe
8. publicly shame you by telling other people about your debt, or by sending you mail that makes it clear that you are in debt

Collection agencies also cannot threaten you with measures that are illegal or that they don't intend to take, such as:

1. suing you (if they don't intend to do this)
2. taking money from your paycheck or selling your property (if this is illegal in your case)
3. having you arrested
4. violence

How do I make debt collection calls stop?

One way to stop a debt collection agency from calling you is to direct them to call your lawyer instead. If you don't have a lawyer hanging around on retainer, you can still get them to stop calling you by sending them a letter. If they have a fax number, it may be a good idea to send a request by fax and another by post. Ask the agency to send you documentation indicating that they have received your request.

Remember that even though the agency will stop calling you, you still have to settle your debt with them - even if you are a victim of identity theft, it is never in your interest to ignore a dues gathering agency. Continue written correspondence with the agency, and keep detailed records of this (including copies of letters you send, and written copies of any agreements you make over the phone) in case the debt needs to be resolved in court or it comes back to haunt you later (8).