5 things debt collectors are not allowed to do
Debt collectors have a reputation, in some well-deserved cases, for being obnoxious, rude and even scary when trying to get borrowers to pay. Federal Fair Debt Collection Practices Act (FDCPA) was enacted to curb this annoying and abusive behavior, but some debt collectors are flouting the law.
Here are five tactics debt collectors are specifically prohibited from using. Knowing what they are can help you stand up for yourself with confidence.
1. Pretend to work for a government agency
The FDCPA prohibits debt collectors from pretending to work for any government agency, including law enforcement. They also cannot claim to work for a consumer news agency.
Key points to remember
- If you really don’t owe the debt, there are steps you can take.
- Even if you do, debt collectors are not allowed to threaten, harass or publicly shame you.
- You can order them to stop contacting you.
A 2014 incident in Georgia shows exactly what debt collectors are not supposed to do. The owner and six employees of Williams, Scott & Associates have been arrested for allegedly accusing people of fraud and saying they would be arrested and face criminal charges for failing to repay their debts.
Debt collectors also allegedly misrepresented themselves as working under contract for federal and state government agencies, including the Department of Justice and the US Marshals.
The company operated nationwide from 2009 to May 2014 and called itself the Warrant Services Association
2. Threatening to arrest you
Collection agencies cannot falsely claim that you have committed a crime or say that you will be arrested if you do not pay back the money they say they owe.
First of all, agencies can’t issue arrest warrants or put you in jail. Plus, failing to pay off credit card debt, mortgage, car loan, or medical bill in a timely manner doesn’t put you in jail.
That said, if you receive a lawful order to appear in court on a debt-related matter and fail to show up, the judge may issue a warrant for your arrest. And, if you don’t pay a debt-related court fine, or if you refuse to pay taxes or child support, you could go to jail.
5 things debt collectors are not allowed to do
3. Shame yourself publicly
Debt collectors are not allowed to try to publicly shame you by making you pay money you owe or not.
In fact, they aren’t even allowed to contact you by postcard. They cannot publish the names of people who owe money. They can’t even discuss the matter with anyone other than you, your spouse, or your lawyer.
Debt collectors are allowed to contact third parties to try to locate you, but they are only allowed to ask these people for your address, home phone number, and place of work. In most cases, they cannot contact these people more than once.
4. Try to collect debts you don’t owe
Some debt collectors will knowingly or unknowingly rely on incorrect information to try to get money from you.
The creditor who originally owed you money may have sold your debt to a collection agency, which in turn may have sold it to another collection agency. An error somewhere along the way could mean that the collector contacting you has incorrect information.
The agency might try to collect a debt from you that has been released from bankruptcy or even a debt owed by someone else with a similar name.
Within five days of your first contact, a debt collector must send you written notice of how much you owe, to whom, and how to make your payment. You may need to invite them to do so.
If you are unsure whether you have a debt, send a letter to the collector by certified mail with a return receipt requesting more information. Be careful not to take responsibility for the debt.
The Consumer Financial Protection Bureau provides sample letters to debt collectors who you can use to make sure you’re not saying the wrong thing or giving out more information than you need to.
5. Harass you
The law lists specific ways in which debt collectors are not allowed to harass you. They are not allowed to:
- Threaten you with violence or harm
- Use obscene or profane language
- Calls you repeatedly
- Call you before 8:00 a.m. or after 9:00 p.m. without your permission
- Call you at work, if you forbid it in writing
- Contact you if you tell the collector, in writing, to stop contacting you altogether or to stop contacting only your lawyer.
Even if you take these steps, there are still circumstances that allow debt collectors to get back to you: They may contact you to let you know they will no longer contact you or to tell you that a lawsuit has been filed. against you.
Don’t fall for the trap
If you receive a summons to court for a lawsuit concerning your debt, do not ignore it. An unscrupulous debt collector could fabricate such a document, or it could be legitimate.
If you receive a summons, search for court contact information online (not on the notice sent to you) and contact the court directly to confirm that the notice is correct. Do not use the address or phone number on the document you receive.
The big exception
There is one important exception to the FDCPA: internal collectors are not subject to it. For example, if you are late on your Macy’s credit card bill and Macy’s calls you directly, there is no need to follow the rules outlined in the FDCPA.
Most in-house collectors are for debts that have only been in arrears for a few weeks or months. After that, the original creditor usually hires a collection agency to collect on their behalf or sells your debt to a debt buyer who keeps what he collects.
These two types of collectors are subject to the FDCPA.