In this issue, we are going to review another common scam from the past year. Every year, the FTC (Federal Trade Commission) surveys all 50 states and publishes the top 10 scams. For the last year, debt collection complaints topped the list.
How to Deal With Debt Collection
Sometimes, even the most responsible person can fall behind on their bills. We all want to do the right thing and pay what we owe in a timely way, but sometimes a medical emergency or other unforeseen event can contribute to falling behind on our debts. It can be a stressful situation, and it becomes much more stressful when someone begins calling you at all hours and threatening you.
There is a federal law, the Fair Debt Collection Practices Act (FDCPA), which protects consumers from aggressive, threatening and harassing debt collection. The law covers personal, family and household debts, including money you owe on a personal credit card account, an auto loan, a medical bill or your mortgage. The FDCPA doesn’t cover business debts.
If you find yourself, for any reason, unable to pay your debts on time, and a debt collector has begun to call you and send you letters, don’t ignore them; they won’t go away. Try to resolve the matter – even if you don’t think you owe the debt, or you can’t repay it immediately.
Every collector must send you a written “validation notice” telling you how much money you owe within five days after they first contact you. This notice also must include the name of the creditor to whom you owe the money, and how to proceed if you don’t think you owe the money.
If you ignore them, they will become more aggressive and threatening and can take you to court to sue you for what they believed is owed. If it gets that far, and you get a letter informing you that you are being sued, don’t ignore that either! If a debt collector files a lawsuit against you to collect a debt, respond to the lawsuit, either personally or through your lawyer, by the date specified in the court papers to preserve your rights.
There are limits to what a debt collector can do in the process of collecting debt.
They may not:
- call you at inconvenient times, such as before 8:00 AM or after 9:00 PM.
- call you at your place of work if they are told either orally or in writing.
- pretend to be someone else, like an attorney or a government agency.
- harass, threaten, deceive you or call your relatives.
- use threats of violence or harm.
- publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies).
- use obscene or profane language.
- 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.
- contact you by postcard.
- say you will be arrested if you don’t pay your debt.
They can contact you by phone, letter, email or text to attempt to collect, as long as they follow the rules and tell you they are collecting a debt.
If you believe you do not owe the debt, send the debt collector a letter stating that you don’t owe any or all of the money, or ask for verification of the debt. The collector must stop contacting you. You have to send that letter within 30 days after you receive the validation notice. But a collector can begin contacting you again if it sends you written verification of the debt, like a copy of a bill for the amount you owe.
It is far better to respond to the first call, even if you cannot pay the bill in full. Most debt collectors will work with you to create an installment plan that you can afford. They would rather get something than nothing. And it will give you the chance to pay off your debts without the constant harassment that can come with debt collection.
Remember, there are rules about what they can and cannot do, and you can let them know you are aware of those rules.
This article was written by Catherine Blinder, chief education and outreach officer of the Department of Consumer Protection of the State of Connecticut. To learn more about how the Department of Consumer Protection can help, visit us online at www.ct.gov/dcp.