Thursday, July 31, 2008

Consumer complaints to the Federal Trade Commission about debt collectors have consistently ranked No. 1 among all industries for several years in a row.

The Fair Debt Collection Practices Act, prohibits deceptive, unfair and abusive practices by third-party collectors. The act doesn't apply to a company's in-house debt collectors, but the FTC can go after in-house collectors due to a provision of the Federal Trade Commission Act that prohibits "unfair and deceptive acts in commerce."

If you are being harassed by a debt collector, here are steps you can take to ensure that you resolve your situation quickly:

1. Don't ignore calls or written communications from collectors.

"As long as the collector is not being abusive, it's a good idea to communicate with the collector because if you don't owe the money, you'll be able to convince the collector to go away," Kane said.

"If you do owe the money, you may be able to work out some partial payment or long-term payment, which you may not be able to do if you don't maintain some line of communication with the collector."

2. Make the collector prove you owe the debt.

Within five days after you're first contacted, the collector must send you a written notice telling you the amount you owe, the creditor to whom you owe the money and what to do if you believe you don't owe the money.

3. If a collector calls about a bill you already paid, send them proof in writing that you met the obligation.

Respond in writing and provide documents showing the account has been paid or settled in full. If you don't have the records, you can dispute the debt or try to get proof from the original creditor.

4. Don't tolerate abuse from debt collectors

Collectors cannot threaten violence or publish a list of consumers who refuse to pay their debts (except to credit bureaus). They cannot use obscene or profane language, or repeatedly use the telephone to annoy you. They cannot call you at work if you tell the collector that your employer will not allow it.

Collectors are prohibited from revealing the existence of your debt to any other party unless you've given consent or a court has given permission.

A collector may contact a third party to find out your whereabouts. They can learn where you live, your home phone number and where you work. They are not entitled to your work number, although they can easily obtain it once they know where you work.

5. Take action if you are being harassed with collection calls.

Send the debt collector a written notice to cease communications in connection with the debt or written notice that you refuse to pay it. Send the notice directly to the debt collector via certified mail, with a return receipt to document proof the collector received your cease and desist notice.

Once the collection firm receives your notice, it must stop contacting you, other than to tell you that the collector or creditor may invoke further specified legal steps to collect the debt.

The best way to deal with debt collectors is to communicate with them quickly, document all communications, and to try to work out a payment plan, if possible.

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