By Rachael Mason
Is it legal for a debt collector to call you at
work?
It's not unusual to have a New Year's resolution to
get out of debt. Whether you carry your debt on your credit card(s) or have outstanding
student loan debt, if you miss even one payment, increasing interest rates,
plus late fees, can quickly balloon out of control.
Eventually, you might even find yourself answering
to collection agencies rather than the original issuers of your debt. According
to the Consumer Financial Protection Bureau,
30 million Americans are currently subject to debt collection.
Debt collectors are known for rather ruthless
practices, so it pays to know your rights when it comes to debt collection. For
example, debt collectors are, indeed, allowed to call you at work, unless you
inform them, either orally or in writing, that your employer does not permit
you to accept such calls. This stipulation is part of the Fair Debt Collection Practices Act.
The legislation was passed to
protect consumers from "abusive, unfair and deceptive debt collection
practices," which the act says "contribute to the number of personal
bankruptcies, to marital instability, to the loss of jobs, and to invasions of
individual privacy."
What protections does the Fair Debt Collection
Practices Act offer?
According to the Federal Trade Commission, debt
collectors are only allowed to contact you during convenient hours, which,
unless otherwise defined, are assumed to between 8 a.m. and 9 p.m. in your time
zone.
Debt collectors can contact family members or
employers in an effort to try to locate a person, but the collectors are only
supposed to call each person once. They're also not allowed to tell third
parties that the debtor owes money.
What abusive practices are prohibited?
Debt collectors will often say almost anything in
their efforts to collect a payment because of the payments they receive to get
you to pay up. In a Kiplinger article called "Confessions of a Debt Collector,"
reporter Fred Williams, who worked at a collection agency for three months,
wrote that his top-performing co-workers got up to $10,000 bonuses.
To get the money, his coworker sometimes pretended
to be paralegals or "fraud investigators," he wrote. Other collection agency
employees gave terrible financial advice: "We suggest that they take money out
of their IRA, drain their home equity with a second mortgage, load up a different
credit card or even skip a mortgage payment," Williams wrote.
Still, no matter how much money you may owe, debt
collectors are not allowed to threaten you with violence, use obscene language,
or repeatedly call to annoy you.
Collectors are also not supposed to lie or tell you
they are attorneys or that they have sent legal forms if they haven't.
In addition, collection agencies aren't allowed to
threaten to tell your employer about your debt.
They also can't tell you that you will be arrested
if you won't pay your debt or that they'll seize your property or garnish your
wages — unless allowed to by law and they intend to do so.
If you don't pay a debt that's owed, you can be sued
by a creditor or debt collector.
"You shouldn't ignore or avoid a legal summons
because if you lose in court, a creditor or collection against can get a
judgment against you," says attorney Brian Albert of legal information website
THELAW.TV. "A judgment allows the creditor or collection to garnish your wages
or seize your assets, like money in a bank account."
What if you actually don't owe the money?
If you are contacted by a debt collector, you have
30 days to send them a letter saying that you don't owe the amount stated. By
law, the collection agency must then stop getting in touch with you. But,
according to the Federal Trade Commission, 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.
Who monitors collection agencies?
While the FTC doesn't help resolve individual
complaints, it does keep a record of all complaints received and uses this
database to launch investigations of bad business practices. Visit https://www.ftccomplaintassistant.gov/
to file a complaint.
Starting on January 2, 2013, the Consumer Financial
Protection Bureau will be monitoring large collection agencies and sharing
information with the FTC. The CFPB was established by The Dodd-Frank Wall Street Reform and Consumer
Protection Act of 2010 in order to regulate
consumer financial products and services.
