What to do if you're abused or harassed by a debt collector

The percentage of delinquent accounts has reached record highs in the current economic climate. Unfortunately, that means that the volume of collection calls and letters has increased as well. With consumers strapped for cash, some debt collectors will inevitably resort to harassing, abusing and misleading consumers in an attempt to obtain payments. This post details many common violations of the Fair Debt Collection Practices Act committed by debt collectors. What can you do if you are have been harassed or abused by a debt collector in violation of the FDCPA?

First, save all voice messages left by debt collectors. Next, you should take detailed notes of every conversation you have with a debt collector. These notes don't have to be fancy. Just use a pen and paper and make note of everything that was said during the conversation. Then, sign and date each note and save them. Third, save all copies of letters and other correspondence from debt collectors. Finally, if you believe that the debt collector's conduct has violated the FDCPA, consider discussing your case with a consumer lawyer. You have a right to sue debt collectors that violated the FDCPA and receive money damages.

You cannot go to jail for not paying your debts

A fairly common tactic of shady debt collectors is to tell people that they will go to jail if they do not pay a debt. I've even heard about debt collectors impersonating the police and telling unsuspecting people that they have a warrant for them and that they will be arrested immediately unless they pay their debt.

You cannot go to jail for not paying your debts. Period. Any debt collector that tells you otherwise has violated the Fair Debt Collection Practices Act (FDCPA). The FDCPA prohibits false and misleading representations when attempting to collect a debt. This prohibition specifically includes telling you that the nonpayment of a debt will result in imprisonment.

Am I responsible for my deceased parent's debt?

When a person dies, their assets are pooled into what is known as an estate. The estate is responsible for paying the debts of the deceased. If there aren't enough assets in the estate to pay the debts, some creditors will hire a collection agency to pester the deceased's relatives for payment. These collectors will often imply that you, as a relative of the deceased, have a legal obligation to pay for the deceased's debts. This is almost always incorrect. You almost never have any obligation to pay for the debts of a deceased relative, even if you are named the representative of the estate. The only time you may have an obligation to pay for a deceased relative's debt is if it was a joint debt that you agreed to pay for, such as a joint bank account or if you co-signed a loan with the deceased.

No matter what the supposedly sympathetic bill collector tells you, it is rare for a person to be legally obligated to pay for a deceased relative's debt. You should consult with a lawyer before agreeing to pay anything.

Stop debt collection harassment without filing bankruptcy

Here are three ways to stop harassing phone calls and letters from debt collectors:

Write a cease and desist letter

Under the Fair Debt Collection Practices Act (FDCPA) a debt collector must stop contacting you if you write them a letter telling them to do so. Reference the FDCPA in your letter and state that you request that the collector cease all communications with you. Send the letter via certified mail and keep a copy of the letter and mail receipts for your records. This is the easiest way to stop the harassing telephone calls. But in my experience, a cease letter usually just causes the debt collector to either sell or transfer the debt to a different debt collector. Unfortunately, you must now write another cease and desist letter to the new debt collector. Its not unusual for debts to bounce around multiple times, so you might end up writing multiple letters.

Hire an attorney

The FDCPA prohibits a debt collector from communicating with you if they know you are represented by an attorney. Concerned that you can't afford an attorney? While an attorney does cost money, some consumer attorneys will write a cease and desist letter, handle any incoming collection calls, and negotiate a resolution of your debt for a small fee.  This will relieve you of the burden of having to deal with harassing phone calls and letters and let you focus on the more important things in your life.

Sue the debt collector under the FDCPA

If a debt collector violates the FDCPA, you have the right to sue the debt collector and recover damages. You are entitled to $1,000 in statutory damages, actual damages, and attorneys fees. Most consumer lawyers will accept a FDCPA case on a contingency fee arrangement. This usually means you will not have to pay any attorney fees unless your case is successful. Some of the more common debt collection practices prohibited by the FDCPA are:

• informing third parties that you owe a debt;

• contacting you at inconvenient times or contacting you at work after you’ve told the debt collector not to;

• threatening you with violence;

• using abusive or profane language;

• threatening to take legal action when the debt collector has no intent to do so;

• falsely implying that you committed a crime by not paying the debt.

Tips for dealing with debt collectors

Don't tell a debt collector where you bank or work.

This information is very valuable to a debt collector because bank and wage garnishments are easy and cheap ways to collect debts. Never voluntarily give this information to a debt collector. A favorite trick debt collectors will use to get you to tell them this information is to say "I already know you bank at ABC Bank." Surprisingly, many people will reply "No I don't. I bank at XYZ Bank." Don't fall for this trick.

Keep accurate records of all communications with debt collectors.

If you talk to a debt collector on the phone, immediately after hanging up, write down everything that was said during the conversation in as much detail as possible. Sign and date these notes. If a debt collector violates the FDCPA, your notes can be used as evidence of the violation. Similarly, be sure to keep every letter sent to you by a debt collector, including its envelope.

Demand that the debt collector confirm any agreement in writing.

If you agree to a payment plan or settlement with a debt collector, before sending any money, demand that the debt collector confirm your agreement in writing. It's not unheard of for debt collectors to try to back out of payment agreements. Also, if a debt collector gives you an extension of time to make a payment or to respond to something, make sure they confirm that agreement in writing.

Avoid long, open-ended payment plans.

Debt collectors will usually agree to monthly payment arrangements on the full balance, plus accrued interest. If possible, avoid this type of payment plan. With the high interest charged by most credit card companies, you will be paying the debt back forever. If possible, negotiate a fixed amount and term. This way you know exactly how much you'll be paying and for how long.

If you are sued, talk to a consumer lawyer immediately.

A debt collection lawsuit is serious business. Unless you are well-versed in the rules of civil procedure and have a good understanding of the deadlines involved in litigation, you should strongly consider getting advice from a consumer lawyer. I've seen many cases where consumers chose to represent themselves, had strong defenses, but ultimately lost because they failed to follow a court rule or meet a deadline.

How the FDCPA protects consumers against debt collectors

The Fair Debt Collection Practices Act (FDCPA) is a federal law that prohibits certain conduct by debt collectors. Its important to understand that the FDCPA only applies to communications with "debt collectors" (ie. not the original creditor collecting its own debt) and to "consumer debts" (ie. not business debts). Under the FDCPA, a debt collector is forbidden from doing any of the following:

• Communicate with you at inconvenient times or places. Inconvenient times are generally considered to before 8:00 a.m. and after 9:00 p.m., local time where the consumer is located

• Contact you directly if the debt collector knows you are represented by an attorney

• Communicate with you at work if you tell the debt collector not to call you there, or if the debt collector knows that you cannot receive calls at work

• Contact third parties and inform them you owe a debt

• Communicate with you after you've requested that the debt collector stop calling you

• Engage in conduct that is harassing, oppressive, or abusive to you

• Threaten you with violence or other criminal behavior

• Use obscene, profane, or abusive language

• Use false, deceptive, or misleading representations or collection methods

• Threaten to take legal action if there is no intention or authority to do so

• Falsely imply an affiliation with a government

• Falsely represent the amount, character, or legal status of a debt

• Falsely imply that the debt collector is an attorney

• Imply that non-payment will result in arrest or imprisonment

• Collect any amount that is not legally owing

This is not an exhaustive list, and there may be exceptions to some of the general prohibitions.