First up, debt collection agencies are companies hired by lenders to get people to pay back debts. The lender might be a credit card company, hospital, phone company, etc. They hire the agency when you fall behind on payments.
Now, these agencies can’t just do whatever they want. There are federal and state laws that say what’s okay and what ain’t. The main law is the Fair Debt Collection Practices Act (FDCPA) – it’s like the rules of the game.
What They Can Do
Here are some of the main things debt collectors are allowed to do:
- Call you – But only between 8am and 9pm
- Send letters asking you to pay
- Report your debt to credit bureaus after telling you they might
- Take you to court to collect the debt
- Contact other people like your friends or family to find out how to reach you
- Add interest and fees allowed by your original contract
Now, there are limits on some of these. We’ll chat ’bout that next.
What They Can’t Do
Debt collectors can’t harass you or use unfair practices. Here are some illegal things:
- Call you before 8am or after 9pm
- Call you repeatedly in a harassing way
- Lie or mislead you about the debt
- Threaten you with violence or harm
- Say they will arrest you (unless they really can)
- Talk to others about your debt without permission
- Send postcards or envelopes with words/symbols showing the letter is about debt
- Add huge fees not allowed in your original contract
If they break these rules, you can report them to the Consumer Financial Protection Bureau. You can also sue them.
Your Rights & Defenses
You have rights when dealing with collectors. And there are some defenses if you’re sued.
First, you can tell them to stop contacting you. Send a letter saying you don’t want to be contacted anymore. They can still sue you, but have to stop calling/writing.
You can also dispute incorrect/unfair debts. The collector has to stop collections until they send proof you really owe the money.
If sued, here are some defenses:
- You don’t owe the money because the debt is too old (statute of limitations)
- You already paid it or settled it
- It’s not your debt – stolen identity!
- The amount claimed is incorrect
Bottom line – know your rights. Debt collectors have power, but they can’t just run you over. And you have defenses. Arm yourself with knowledge.
Hope this gives a helpful overview of what debt agencies can and can’t do. We’re all just trying to figure this life stuff out, ya know? Feel free to reach out if you need an ear. Wishing you the best!