No one likes receiving a call from a bill collector. Even if you recognize that the caller is only doing their job, a debtor will still tense up and get annoyed. Part of the reason for the stressful reaction are the horror stories of threats and harassment from debt collectors and collection agencies. Many consumers are also unaware of what collectors CAN do and what they CANNOT do.
Here are some Ways collection agencies Get a bad rep and how we're trying to change that!
Identification & Validation
Wrong: From the onset, a call from an unknown number is bound to make the receiver suspicious. Some consumers say that debt collectors refuse to identify themselves, lie about or refuse to verify the debt they owe. They also say that collectors immediately start asking for personal or sensitive data such as bank account information or social security numbers.
Right: The debt collector should provide:
- Identifying information: name, company name, address, phone number, professional license number (if applicable in your state)
- Validation of debt: name of original creditor, amount you owe (often in writing)
- Acknowledgment of consumer rights under the Fair Debt Collection Practices Act (FDCPA), including their right to dispute the debt
Wrong: Consumers complain about debt collectors calling at all hours of the day, including their workplace, long after they have asked the collector to stop calling due to employer restrictions on personal calls. Collectors are contacting family members, co-workers or management, discussing the financial situation and making threats to obtain information about the debtor.
Right: Debtors do have the option to send a "cease communication" letter to debt collections agencies requesting the type of communication, how often or if they'd like to cease communication altogether. At that point, collectors may only communicate with the consumer to inform about debt termination or legal action. Either way, collection agencies must abide by the regulations of the FDCPA:
- Contact only between 8 am and 9 pm local time
- Halting all calls to employers if prohibited at the debtor's workplace or if there has been a request of no contact with third parties
- Only obtaining information about the debtor's whereabouts with third parties and only once, unless there is new information
- No discussion about the account or debt with anyone except the responsible party/parties
- No obscene, offensive or threatening language
Wrong: Debt collectors have prompted complaints after threatening arrest, lawsuits or impersonating law officers or attorneys. Consumers also complain of collectors threatening to garnish wages and bank accounts, seize properties or pursue litigation.
Right: Debt collection is not a criminal matter so debtors cannot go to jail for failure to pay a debt. Unless the debt is tax-related or child support, or if the debtor has been summoned to appear in court and doesn't show, jail or prison threats are illegal. The only way a collection agency can discuss a lawsuit with a debtor is if there is actual legal action being pursued. Wages or bank accounts can only be garnished if the collection agency has won a legal judgment against the debtor.
Wrong: Another threat from collectors is a threat to the debtor's credit report. Some debt collectors may even impersonate credit reporting agencies in order to intimidate debtors into paying.
Right: Consumers still have rights under the Fair Credit Reporting Act (FCRA) when it comes to data on credit reports. Debt collection agencies have to report accurate and complete information to credit bureaus, as well as investigate any consumer disputes to the data. When a collector contacts a debtor, they should notify the consumer of their right to dispute the debt or any of the information related to the debt. The reporting collection agency (also referred to as a furnisher) must correct and update the information provided to the credit bureau where necessary.
See also: The FCRA, Credit Reporting and Debt Collection
Phone calls from debt collection agencies don't have to be so intimidating if debtors are aware of the wrong way and the right way to collect debts. Consumers have protections under the FDCPA and the FCRA and debt collection agencies are supposed to adhere to those rules. At BYL Collections, we're doing our best to turn around the bad reputation of debt collection agencies. We treat debtors with a "firm" but "kind" hand because we understand that many consumers are working hard to fulfill their obligations in a timely manner. If we're treating these individuals the way we'd like to be treated - fairly and compassionately - then they're more likely to be better customers in the future.