BBB tips on dealing with debt collectors

In last week’s column, I gave an overview of the Fair Debt Collection Practices Act and some of the things that a collector can and cannot do. Today, I wanted to go into more detail about practices that are off limits for debt collectors, including harassment, false statements and unfair practices. Some specific things they cannot do include:

▪  Use threats of violence or harm or use obscene or profane language.

▪  Publish a list of names of people who don’t pay their debts.

▪  Falsely claim you have committed a crime.

▪  Misrepresent the amount of money you owe.

▪  Lie about whether or not the papers they send you are legal forms or give you something that looks like an official document if it isn’t.

▪  Tell you that you will be arrested if you don’t pay your debt or say they will seize, garnish, attach or sell your property unless they are permitted by law to do so.

▪  Threaten you with legal action if doing so would be illegal or if they don’t intend to actually do it.

▪  Try to collect any interest, fee or other charge on top of the amount you owe unless the contract that created your debt — or your state law — permits the charge.

▪  Deposit a post-dated check early.

▪  Contact you by postcard or any other means that can outwardly be identified as coming from a debt collector.

When you are dealing with a collection agency, keep track of all the calls you receive and save all written statements. Do not give out personal or financial information until you have confirmed that the collection agency is legitimate.

If you can work out a deal to pay monthly or reduce your owed debt, get the details in writing and be sure any promises are also documented. If you set up automatic drafts, you should consider opening a new checking account that will be used only for that purpose. This will prevent the collector from drafting more than the agreed upon amount. When you pay off your debt, make sure you get and save documentation of the resolved debt.

What should you do if a debt collector sues you? First, do not ignore a lawsuit summons. A debt collector can sue you to collect a debt and a court judgment can result in third parties like your bank or employer turning over funds to pay the debt. If you do not show up in court, you lose your chance to fight garnishment. Make sure you or your lawyer respond to a lawsuit by the date in the court papers.

What should you do if a debt collector violates the law? If you think a debt collector has broken the law in its dealings with you, you have one year from the violation to sue. You can also file complaints with the Better Business Bureau, Federal Trade Commission and the Consumer Financial Protection Bureau. Remember that even if the debt collector violates the law, a legitimate debt still does not go away.

For more information on debt collection or any other topic, visit www.bbb.org.