Dealing with Debt Collection Agencies

As the economy worsens, the housing market continues to slump, and fuel costs are rising.... more and more Americans getting into debt and are finding themselves with the unpleasant task of handling calls from aggressive bill collectors.  Always annoying, many times intimidating, and sometimes outright law breaking, bill collectors can be properly put in their place if you are armed with the facts about your rights as a debtor.

As a Person in Debt, You Must Understand your Rights. 

Fortunately there is a law protecting you from the badgering of bill collectors and Debt Collection Agencies, unfortunately, not everyone knows what these rights are.  In my experience as a credit counselor I cannot count how many times a client has called me in hysterics after being threatened to by thrown in jail by an unscrupulous bill collector (debtor's prison hasn't been around since 1903!).  The Fair Debt Practices Act of 1976 affords debtors a myriad of rights pertaining to bill collection activities.

This is a Simplified Version of the Debt Collection Rights Details that will Assist you in Dealing with Debt Collection Agencies

What types of debt collection practices are prohibited?

Harassment. Debt collection agencies and their debt collectors may not harass, oppress, or abuse you or any third parties they contact.

Debt collectors may not:

• Use threats of violence or harm to collect debt
• Publish a list of consumers who refuse to pay their debts (except to a credit bureau)
• Use obscene or profane language; or repeatedly use the telephone to annoy someone.

False statements.

Debt collection agencies and their debt collectors may not use any false or misleading statements when collecting a debt.

Debt collectors may not:

• Falsely imply that they are attorneys or government representatives collecting debt;
• Falsely imply that you have committed a crime;
• Falsely represent that they operate or work for a credit bureau;
• Misrepresent the amount of your debt;
• Indicate that papers being sent to you are legal forms when they are not; or
• Indicate that papers being sent to you are not legal forms when they are.
  

Debt collectors also may not state that:

• You will be arrested if you do not pay your debt;
• They will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so; or
• Actions, such as a lawsuit, will be taken against you, when such action legally may not be taken, or when they do not intend to take action.
  

Debt collectors may not:

• Give false credit information about you to anyone, including a credit bureau
• Send you anything that looks like an official document from a court or government agency when it is not
• Use a false name when trying to collect debt.

Unfair Practices

Debt collectors may not engage in unfair practices when they try to collect a debt.

Debt Collectors may not:

• Collect any amount greater than your debt, unless your state law permits such a charge
• Deposit a post-dated check prematurely
• Use deception to make you accept collect calls or pay for telegrams
• Take or threaten to take your property unless this can be done legally
• Contact you by postcard regarding debt.

Once armed with these facts, many a would be "victim" of a phone bully will feel much more confident when dealing with the collector on a phone call.  But lets go a little further, and explore the psychology of a collection agent and how they might see themselves if things were different and they could not hide behind a phone receiver.  Here are some of the things I try to get my clients to think about when discussing abusive collectors.

Think of the meanest, nastiest bill collector you've dealt with recently. You know the guy; the raspy voiced, quick talking, arrogant, insult spewing jerk who refuses to accept anything other than a post dated check, and demands a payment "right now". He's the one that doesn't want to hear about your financial situation, "your problems".  He especially loves to get women on the phone and bully them to tears.  Now imagine if he would still be so brave if he had to knock on your door to discuss your debt.  Can you say "NOT!".

When a collector calls you on the phone think of how many jobs they couldn't get and had to settle for this miserable existence.  Obviously the couldn't quite cut it at DMV, and they certainly didn't have the guts to be a repo man.  Heck, even a drug dealer makes people smile part of the time.  Now you will understand that when they are mean and nasty and mad, they are really feeling sorry for themselves that that is the only job they can handle.  The old saying "Misery loves company" applies here beautifully.  Poor miserable bill collector!

Think through the debt collector's phone voice.

The guy who sounds like Darth Vadar on the phone might be 4 foot 5, walk with a cane and have glasses as thick as coke bottles.

Never, ever let debt collectors know you are angry. 

Instead, try laughing at them.  When they call back, laugh again. When they call back again, put them on speaker phone and have everyone in the house laugh at them.  This is one of my all time favorites.

Deflate the Debt Collector' s ego. 

Bill collectors, in their seemingly infinite capacity of low self esteem, almost always try to make themselves sound more important than they really are.  Phrases like "my company", "the money you owe me" or "my money" are commonly encountered.  "You're a loser" is also a verbal salvo thrown (usually towards the end of the conversation when they can tell you are about to hang up).  Point out to them that if they were as important as they try to make themselves appear, they certianly would have more important things to do than spend their days talking to "losers" like yourself.

Try Some Crocodile Tears

As soon as they start berating you, you start in with a fake cry.  This will usually insight more hostility.  The more hostile they get, the more you let those tears and wails flow.  Don't forget the long, drawn own quiet pauses.  See how long you can keep them on the phone.   Make it a game.  One client of mine happily called me and reported that she was able to keep a bill collector on the phone for 30 minutes this way. Best of all, she hung up on him at the end of her performance.  Remember, bill collectors get paid by how many people they call a day.  Play it right and you can cost a sucker a few bucks, hitting him right where it hurts- his wallet!  Instant revenge!

Undercover at a medical bill collection agency.  Sean applies for a job and get hired by a local collection agency that specialized in calling medical collection accounts.

Let me first start out by saying that, in my opinion, owning, running, or working for a collection agency is one of the lowest forms of employment on earth.  It is parasitic in every way.  Bill collectors make money off of other people's financial woes.  They harass and abuse people who owe money to other people.  OK sure, sometimes there are people who irresponsibly get charge cards, run them up and never have any intention of paying them.  However, most debtors are honest, hard working people who have caught one, or more bad breaks financially.  Stuff happens, and after all- even regards to the honest debtors, they did charge the debt.  Alright, so maybe there is a place for bill collectors.  The debt's gotta be paid, and in order for that to happen, the debtor will need to be contacted.  Somebody's gotta do it.

How to Deal With Debt Collection Agencies

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