According to Attorney General Andrew Cuomo, the sketchy New York operation “was run by people who lied, bullied and preyed on vulnerable Americans struggling to resolve their financial situation.” Not nice.
Here are the rules that debt collectors (whether they’re from a credit card company or collection agency) have to play by, according to the Fair Debt Collection Practices Act.
If a debt collector contacts you via telephone or leaves a message:
- She can only call you between the hours of 8 a.m. and 9 p.m. in your time zone. If it’s before 8 or after 9, it’s considered harassment.
- She has to identify herself by name. (“This is Kim Fusaro.”)
- At that point, you have the right to ask the name of her employer. She cannot give that information to anyone who answers the phone except you. (Even if your mom answers and you live at home.) She can’t pretend to be calling on behalf of the government.
- She cannot say (if someone answers the phone, or if she leaves a message) that she’s calling about debt collection. (Instead, “I’m calling about a business matter.”)
- She cannot call you at work after you’ve said, “My employer prohibits this type of communication.”
- If you say you wish to “cease communication” with a debt collector, she can only call you again if her employer has dropped your case or plans to take further action. (She can’t keep calling and saying her company’s going to sue you. She can say it once, if the company is, in fact, going to sue you.)
- She cannot threaten violence, your reputation (“We’re going to tell your boss about this.”), or your property (“We’re going to have your house taken away.”) At the organization that was just shut down in New York, one debtor was told, “Make sure you have somewhere for your kids to go. Lock up your house. Get some clean clothes, because you're not coming home anytime soon.” Yikes!
- She cannot use profane, obscene, threatening, or abusive language. (jennw81’s friendly neighborhood debt collector said—on her parents’ answering machine—“You are hereby ordered to call me back.” Easy, buddy.)
- She cannot threaten to publish your name. (“We’re mailing a list of people who owe us money to businesses in your area.”)
- She cannot call you “repeatedly or continuously,” which is pretty vague. But if you feel like you’re being harassed, write down every time she calls.
If a debt collector contacts you via the mail:
- She cannot send you a postcard (which exposes your debt to the world).
- She cannot send a letter in an envelope that indicates the correspondence is from a debt collector or in regards to debt collection. (It can have the debt collector’s address. That’s all.)
No matter how she contacts you—and she can never contact you in person—a debt collector is only allowed to discuss your debt with you.
- She cannot tattle to your parents. Or your roommates. Or your roommates’ parents. (I had a debt collector call and send letters to my roommate’s parents. Who lived in a different state. Way illegal.)
There are a bunch more rules and legalese—you can read the whole act here—but that covers most of it.
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My advice to jennw81 (who’s just about to graduate from college doesn’t have a job) and anyone whose feeling pressured, freaked out, or otherwise upset by debt collectors:
- If you’re dealing with people from your credit card company (not collection agencies), work with a nonprofit credit counselor. (Read all about my experience—and learn how to contact one—herehere and .)
- Speak with the debt collector once (Be brave!) and request written proof of the debt. She’s not allowed to contact you again until she’s sent written proof. (If nothing else, this buys you some time.)
- jennw81, you mentioned that the company that called you claimed to be a law office. When you speak to them (even if their company name is “Smith & Smith, Esq.” or some other lawyer-sounding nonsense) or receive a letter from them, they MUST convey, “This communication is from a debt collector and is an attempt to collect a debt. Any information obtained will be used for that purpose.” (So that should clear up whether you’re dealing with an actual lawyer.)
- If you do get sued, don’t ignore the summons. If you don’t show for your court date, there will be a warrant out for your arrest, which is even scarier than the scariest phone call.
- Attempt to set up a good-faith payment plan. Meaning, if you can scrape up $50 a month—no matter how much you owe—say you’ll send them $50 a month. Even if you owe $10,000, say you’ll send them $50 a month until you find a job and can renegotiate your settlement plan.
- If you can only afford $50 a month, start by offering $25. Then don’t let them bully you higher than $50. If you “give” a little you can say, “I’m working with you. This is the most I can afford.” They may come back with something to the effect of, “Well I don’t know if my manager will accept this.” Don’t back down. You don’t want to wind up in more debt!
- If you’re dealing with a collection agency and can afford it, try to negotiate a settlement over a couple months. If you owe $1,000, say, “I’ll give you $300 right now to close the account.” They’ll try to negotiate you up, so start low. The might offer you a $600 settlement over two or three months.
- Do NOT let them bully you into taking out a loan (from a bank or even your parents). Someone tried that on me once. I was like, “Lady, I owe your company alone more than $20,000. Who do you think is going to give me a loan?” (The answer would be someone who was going to charge me an insane amount of interest—and land me further in debt.)
- Don’t let collection agencies sneak in little lies. I once offered to pay off a debt over two years and was told, “The original lender won’t accept that. They want the account paid in full in a year.” Once the debt is with a collection agency, the original lender is no longer part of the conversation.
- If you’re worried you’re dealing with a shady company, get your agreement in writing before you send them any payments. Don’t let them pressure you into sharing your bank account info.
- Also, according to this article, the operation that was shut down in New York worked under the following names: Central Resource Management, Final Claims Asset Locators, Final Control Asset Locators, Interchange Payment Solutions, Next Step Services, Portfolio Asset Assurance, Silverbay Services, and Teleport. If these are the people anyone was dealing with, you’re off the hook for now.
I hope that answers all (or at least some!) of your questions, jennw81! If anyone else has more questions, let me know and I’ll do my best to answer them (or find answers).
Anyone else under pressure from debt collectors? Or does anyone have a funny joke to lighten the mood around here?
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