Consumer 101: How to push back when the debt collector calls

August 10, 10:38 AMConsumer News ExaminerBroderick Perkins

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Debt collection was the fastest growing type of consumer complaint last year, according to a
survey by consumer groups Consumer Federation of America (CFA), the National Association of Consumer Agency Administrators (NACAA) and the North American Consumer Protection Investigators (NACPI).

But if you know your rights, under the federal Fair Debt Collection Practices Act (FDCPA), which prohibits debt collectors from using abusive, unfair, or deceptive practices, you can give errant collectors what for.

The "2008 Consumer Complaint Survey Report," a survey of 34 state, county, and city agencies from 19 states, also said credit and debt collection ranked as the No. 3 top consumer complaint category in 2008.

The category includes billing and fee disputes, mortgage-related fraud, credit repair, debt settlement, predatory lending, illegal or abusive collection tactics.

Susan Grant, CFA Director of Consumer Protection, says "A federal agency that would focus on financial safety would help consumers and state and local consumer agencies by setting minimum standards that would not preempt state laws."

The Obama administration's proposed Consumer Financial Protection Agency would serve just that purpose.

The survey also found aggressive debt collection tactics topped the list of complaints about collection agent behavior.

Under the FDCPA, you have consumer protections when it comes to debt collections involving personal, family, and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill, and your mortgage.

When a collector first contacts you, consider talking to them at least once to see if you can resolve the matter - even if you don't think you owe the debt, can't repay it immediately, or think that the collector is contacting you by mistake.

However, once you decide after contacting the debt collector that you don't want the collector to contact you again, tell the collector - in writing - to stop.

Here's how:

Make a copy of your letter. Send the original by certified mail, and pay for a "return receipt" so you'll be able to document what the collector received.

Once the collector receives your letter, they may not contact you again, with two exceptions.

A collector can continue to contact you to tell you there will be no further contact or to let you know that they or the creditor intend to take a specific action, like filing a lawsuit.

The letter you send does not get rid of the debt, but it should stop the contact.

Otherwise, practices that are off limits for debt collectors include:

Harassment - Debt collectors may not harass, oppress, or abuse you or any third parties they contact. They cannot use threats of violence or harm; publish a list of names of people who refuse to pay their debts (they can give this information to the credit reporting companies); use obscene or profane language; or repeatedly use the phone to annoy someone.

False statements - Debt collectors may not lie when they are trying to collect a debt. Among other false statements that are prohibited, they cannot falsely claim that they are attorneys or government representatives; that you have committed a crime; or represent that they operate or work for a credit reporting company.

That also are prohibited from saying that you will be arrested if you don't pay your debt and saying they'll seize, garnish, attach, or sell your property or wages unless they are permitted by law to take the action and intend to do so.

They cannot give false credit information about you to anyone, including a credit reporting company; send you anything that looks like an official document from a court or government agency if it isn't; or use a false company name.

Unfair practices - Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt - or your state law - allows the charge; deposit a post-dated check early; take or threaten to take your property unless it can be done legally; or contact you by postcard.

To learn more about your rights see the Federal Trade Commission's "Debt Collection FAQs: A Guide for Consumers."