March 27, 2009 at 3:40 PM ET
Harassing calls from debt collectors have become a way of life for many as the U.S. economy has faltered and unemployment soared. Debt collection is big business: About $40 billion each year is recovered from consumers by collectors, according to the International Association of Credit and Collection Professionals. With so much money at stake, aggressive tactics – and outright harassment - are common. Last year, the Federal Trade Commission received 78,000 complaints about debt collectors.
In one FTC complaint I’ve read, a consumer describes this harrowing episode. He was threatened by a collector over a $600 medical bill that he couldn’t pay. Out of spite, the collector managed to break the debt up into nine $70 unpaid bill, just so the consumer would get nine separate dings on his credit report.
But you don’t have to put up with dirty tricks. Put one phrase in one letter, and you can stop the harassing calls and interruptions. The beginning of the end of a debt nightmare is to get debt collectors off your back. Here’s how.
When collection agencies call, they can be rude, threatening, and manipulative. But you have the law on your side. The Fair Debt Collection Act has very clear rules about what debt collectors can and can’t do. Naturally, collectors often don’t follow the rules, so it’s important that you know your rights. Don’t let the collectors bully you: Even though you owe someone money, and even if you may feel inferior at the moment, you deserve to be treated with respect and integrity. And you are guaranteed protection under the law.
For example, debt collectors may not contact you “at inconvenient times and places, such as before 8 a.m. or after 9 p.m.,” according to the Federal Trade Commission. If a collector harasses you by calling you late at night, you can sue for damages. Most will stop when they hear you merely mention the Fair Debt Collection Act.
Other things debt collectors can’t do, according to the Federal Trade Commission’s interpretation of The Fair Debt Collection Act:
• Use threats of violence or harm
• 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
• Use any false or misleading statements, such as imply that they are attorneys or government representatives, imply that you have committed a crime; hint that they work for a credit bureau, say you will be arrested if you don’t pay the debt, or use a false name.
A full list of forbidden tactics is available at the FTC’s Web site.
If a debt collector does any of these things, you can in sue in state or federal court and win $1,000 plus recover the cost of any damages you suffered, along with attorney’s fees.
In fact, debt collectors must cease contact with you altogether if you send them a letter telling them to stop.
To get a debt collector off your back, write a letter specifically invoking the Fair Debt Collection Act’s requirement that it stop contacting you. After that, the collector can only call you or write to you if it is communicating an intent to file a lawsuit or other specific legal action.
Remember, sending such a letter may stop the phone calls, but it does not erase the debt or in any way mean the end of the problem. It just gets the debt collectors off your back so you can start putting your life back together.
You can download a sample “get off my back” letter here.
More details on what can and can’t be done by debt collectors are available at ExpertLaw.com
If you believe the debt that you’re being harassed about is inaccurate, you should immediately dispute the debt with the collector via certified mail, and you should obtain a credit report for free at AnnualCreditReport.com. If the debt appears there, you should initiate a formal dispute process with the credit bureau that’s reporting it. Sample dispute letters are also available here.