Debt Collection Practices and What Every Debtor Should Know

Debt collection practices can be unfair and unlawful -- so protect yourself.

Many people experience getting harassed by debt collectors who use unjust (and unlawful) debt collection practices. You can and should stop debt collectors from using unfair debt collection practices. Why? Because the law protects you!

It’s not easy to believe, but the law is on your side and always has been. This is especially true now, with recent reforms in consumer credit legislation. There are laws with which bill collectors must comply — nevertheless, illegal and unfair collection practices still exist. Your awareness about these laws can keep debt collection agencies from plaguing you.

Here are a few things you should know if you’re set upon by unlawful debt collection practices:

• When collection agencies reach you by telephone, they must let you know who they are and why they’re calling. Bill collectors will use every trick in the book to avoid identifying themselves. It’s no secret that you’re less likely to accept a phone call from a collection agency, so they want to use slippery debt collection practices. They’ll try to surprise you and catch you off-guard. You’ll often see “unknown caller” or some other mysterious listing on your caller ID. If you accept unknown calls, ask the caller to identify himself or herself and demand to know the purpose of the call. If they won’t give straight answers, simply hang up.

• Debt collectors must not use insulting language when calling you. Collecting agents can’t use debt collection practices like threatening you with a prison sentence for your debt. You won’t ever go to jail for not paying bills, unless you perpetrate some sort of fraud.

• Collection authorities are legally allowed to call spouses and other members of your family, personal references, and employers. They will resort to debt collection practices like this to embarrass you, ratchet up the pressure level, and find out employment details and your current address. Hopefully, you’re smart enough never to reveal this kind of personal data when you apply for credit and you keep it out of credit reports. Of course, we’re all prey to these debt collection practices because we all make mistakes. Anytime a debt collector calls relatives, employers, or other references, they can be told to cease and desist from calling. It’s so simple, yet “who knew”? A debt collector certainly won’t tell you that little secret. They trust that you won’t know anything about their debt collection practices, whether they’re illegal or legal.

Last but not least, here are some tips about disputing a debt. You should always make use of the right to send a dispute letter to collection agencies concerning your debt. Below are many things to look for when you get a bill from a collection agency:

• Be sure it’s your debt and not somebody else’s.
• The amount outstanding is correct.
• Exact address and phone number.
• Make certain that the bill is not out-of-date.
• To challenge a debt with a debt collector, you must contact them by telephone, after which the debt collectors must send you a written statement. The written notification must contain account details and instructions on how to dispute the debt. Their letter must report the name of the original creditor, how and where to remit payment, the precise amount you owe, as well as a legal notice acknowledging that it is trying to collect a debt.

NOTE: If you’re getting swamped by bill collectors and their unfair debt collection practices, your personal bank account is in danger. When you ignore bills and other notices via snail mail, you could be overlooking an information subpoena or a default judgment. Armed with these legal weapons, debt collectors gain the upper hand and the law is no longer on your side. It won’t take much for a debt collector to find and freeze your bank account, especially when there are fewer banks around these days.

Be smart. Do online research about protecting your assets and making yourself judgment proof. You’ll sleep better knowing that a collection agency can’t grab your next paycheck or your rent money. It pays to be a step ahead of these sharks and their slippery debt collection practices.