Help in Battling Debt Collectors

Aug 6, 2013 by

dealing with debt collectors

Need help dealing with debt collectors?

The operating assumption of many (I would say most) debt collectors is that people who are overdue on debts are dishonest deadbeats who can but won’t pay up. In my experience (I worked as a credit counselor in a previous life), this standard debt collector prejudice is rarely accurate. But embracing it lets the debt collector treat the debtor like dirt and routinely flaunt the law without being troubled by conscience.

Being Past Due on Debt Does Not Make You a Punching Bag!

If you’re past due on debts, that does not entitle the parties to whom you owe money to threaten, abuse, and harass you. Yes, creditors have every right to try to collect debts owed, but within the confines of the Fair Debt Collection Practices Act.

Most consumers are largely ignorant of their rights when it comes to debt collection. And due to embarrassment or shame, they may subconsciously feel that they deserve abuse and deal sheepishly with debt collectors.

Especially if you’re doing your best to get back on track financially and work toward repaying what you owe, there’s no need to pile debt collector abuse on your already heavy load of stress sources. You can and should stand up for yourself!

New Tools to Help You Battle Debt Collectors

Many people are intimidated by debt collectors, don’t know their rights (or even that they have rights) when it comes to debt collection, and don’t know how to assert their rights. Now the Consumer Financial Protection Bureau has released a set of five “action letters” you can use to help in your battle with debt collectors.

For example, if you don’t recognize a debt that a collector claims you owe (a common tactic) or want more information about the debt, you have the right to demand specifics. You can dispute that you owe the debt until the debt collector proves otherwise. To give you a sense of these five tools, here’s an excerpt from this CFPB template letter:

Please supply the information below so that I can be fully informed:

Why you think I owe the debt, and to whom I owe it, including:

  • The name and address of the creditor to whom the debt is currently owed, the account number used by that creditor, and the amount owed.
  • If this debt started with a different creditor, provide the name and address of the original creditor, the account number used by that creditor, and the amount owed to that creditor at the time it was transferred. When you identify the original creditor, please provide any other name by which I might know them, if that is different from the official name. In addition, tell me when the current creditor obtained the debt and who the current creditor obtained it from.
  • Provide verification and documentation that there is a valid basis for claiming that I am required to pay the debt to the current creditor. For example, can you provide a copy of the written agreement that created my original requirement to pay?
  • If you are asking that I pay a debt that somebody else is or was required to pay, identify that person. Provide verification and documentation about why this is a debt that I am required to pay.

The amount and age of the debt, specifically:

  • A copy of the last billing statement sent to me by the original creditor.
  • State the amount of the debt when you obtained it, and when that was.
  • If there have been any additional interest, fees, or charges added since the last billing statement from the original creditor, provide an itemization showing the dates and amount of each added amount. In addition, explain how the added interest, fees or other charges are expressly authorized by the agreement creating the debt or are permitted by law.
  • If there have been any payments or other reductions since the last billing statement from the original creditor, provide an itemization showing the dates and amount of each of them.
  • If there have been any other changes or adjustments since the last billing statement from the original creditor, please provide full verification and documentation of the amount you are trying to collect. Explain how that amount was calculated. In addition, explain how the other changes or adjustments are expressly authorized by the agreement creating the debt or permitted by law.
  • Tell me when the creditor claims this debt became due and when it became delinquent.
  • Identify the date of the last payment made on this account.
  • Have you made a determination that this debt is within the statute of limitations applicable to it? Tell me when you think the statute of limitations expires for this debt, and how you determined that.

I have asked for this information because I have some questions about this debt. Because of my questions, please consider the debt to be disputed at this time. If you stop your collection of this debt, and forward or return it to another company, please indicate to them that it is disputed. If you report it to a credit bureau (or have already done so), also report that the debt is disputed. In addition, you should state in any report that you have failed to fully verify the debt in response to my request (unless you have already provided all the necessary information).

If you fail to provide any of the information or documentation I have asked for, please say why. If you do not provide it, and do not adequately explain why, I will understand that you are unable to confirm or document your claims.

Details about your authority to collect this debt;

  • I would like more information about your firm before I discuss the debt with you. Does your firm have a debt collection license from my state? If not, say why not. If so, provide the date of the license, the name on the license, the license number, and the name, address and telephone number of the state agency issuing the license.
  • If you are contacting me from a place outside my state, does your firm have a debt collection license from that place? If so, provide the date of the license, the name on the license, the license number, and the name, address and telephone number of the state agency issuing the license.

Pretty awesome stuff! My guess is most debt collectors would be unwilling or unable to take the time to meet the letter’s demands.

CFPB Debt Collection Letter Templates

Links to each of the five template action letters the CFPB has produced are available here. A summary of each action letter’s purpose:

  1. You Need More Information on the Debt — This is the letter excerpted above.
  2. You Want to Dispute the Debt and for the Debt Collector to Prove Responsibility or Stop Communication — This letter tells the collector that you’re disputing the debt and to stop contacting you except to provide evidence that the debt is your responsibility.
  3. You Want to Restrict How and When a Debt Collector Can Contact You — The Fair Debt Collection Practices Act prohibits debt collectors from contacting a consumer about a debt at a time or place they should know is inconvenient.
  4. You’ve Hired a Lawyer — If you have a lawyer, generally the debt collector should be communicating with him or her, not you.
  5. You Want the Debt Collector to Stop Any and All Contact — Few debtors realize that they have the right to demand a collector cease all contact. If the debt is legitimate, making such a demand may instigate a lawsuit against you since that’s the only collection means you’d have left the collector. So be careful with this one.

What Do You Think of These Tools?

Do you have any direct or indirect (through a friend or relative) experience with a debt collector? Would you have found these templates from the CFPB helpful?

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