Debt Collection

Debt Collector Harassment: How To Stop It

Drowning in debt is bad enough without having to deal with harassment from an army of debt collectors. Is your cell phone constantly ringing with calls from collection agencies? We’ll help you get the debt collectors off your back so you can focus on downsizing your debt. Read on to learn your rights and find out what you can do to keep the collectors from harassing you.

What is a Collection Agency?

A collection agency is a company that specializes in pursuing people who haven’t paid their debts to demand payment. Most big lenders and creditors won’t bother to chase down individual borrowers, so they work with a debt collection agency to get the work done.

How do debt collectors get ownership of your debt?

Typically, when a lender decides that a customer won’t pay their debt, they sell that debt to a debt collection agency. Usually, the debt sells for pennies on the dollar. If you owe $1,000, a debt collector might buy the right to collect on that debt for $50-$100.

How do debt collection agencies make money?

A collections agency makes money when you pay back your debt. Because the debt collector typically buys your debt for less than the full amount you owe, the collector can make money even if you don’t pay the full amount.

You can use this to your advantage, as a debt collector may be more willing to negotiate a partial payment to settle the debt than the original lender.

Know your rights

“A lot of people believe that a debt collector has every right to treat them like crap and that they have to suffer in silence because they owe money,” says consumer rights lawyer Gary Nitzkin. But they’re wrong. “They don’t have to suffer abuse.”

Luckily, you’re not helpless against the more aggressive debt collection practices of unprofessional collection agencies. The Federal Trade Commission enforces the Fair Debt Collections Practices Act (FDCPA), which has several provisions that protect consumers against third-party collections agencies.

What are your rights under the Fair Debt Collections Practices Act?

The FDCPA forbids third-party debt collectors from taking the following actions. That means that if your debt collector has taken any of the actions listed below, you have the right to file a claim against them with the Federal Trade Commission, the government agency tasked with enforcing fair debt collection practices.

Disclosing your debt to other people

A debt collector can bother your friends, relatives, co-workers, employer, or others with phone calls in their efforts to locate you. However, they cannot legally tell outside parties about your debt. So if your friend or employer gets a call from your debt collector explaining the intimate details of your debt, such as outlining the balance of your student loans or auto loans, you have a viable case against them.

Lying or misrepresenting themselves

Under the Fair Debt Collection Practices Act, a debt collector cannot deceive you when discussing your debt. For example, they cannot misrepresent the amount you owe, falsely claim to be an attorney, or use a fake company name.

Using swear words or threatening violence

A debt collector might try to coerce you into paying up by threatening you or your property, but this practice is illegal. If a collector is trying to intimidate you with threatening, obscene or profane language, file a complaint regarding debt collector harassment with the Consumer Financial Protection Bureau (CFPB), your state attorney general, and other government representatives based on local laws.

Calling repeatedly

An unprofessional debt collector might try to collect a debt by wearing you down with repeated phone calls. Even if you change cell phones, they could track down your new number and continue calling or sending text messages.

How many calls from a debt collector is considered harassment?

Calling three or more times a day is considered harassment in most jurisdictions. Each state has different rules about how often a collector may call you when trying to collect, so check the relevant state law.

Calling outside of reasonable hours

But what’s considered a “reasonable hour?” According to the FDCPA, anytime before 8 a.m. or after 9 p.m. is considered “inconvenient.” Legally, a debt collector must not call during those hours.

Calling you at work (after you’ve asked them not to)

Legally, collectors can try to contact you at work. However, if you inform them (in writing or over the phone) that you’re not allowed to receive calls at work, a debt collector must stop calling you at work.

If you’ve observed your debt collector taking any of the above actions, file a complaint.

How to stop debt collection harassment for good

if you’re getting calls from debt collectors, ignoring them won’t stop the harassment. You’ll have to respond to the debt collector somehow.

Working with professionals, such as attorneys who have experience in dealing with debt collectors, is ideal as they know how to communicate with these companies effectively. If you can’t afford an attorney or want to work with debt collectors on your own, the Consumer Financial Protection Bureaus’ website has form letters that you can use to get the ball rolling. The site also has other valuable resources that you can use to deal with your creditors.

Dispute the debt

Bill collectors and debt collectors are often more concerned with getting paid than paying attention to who is paying them. There’s a chance that the company coming after you to collect a debt is harassing you for a debt you don’t even owe.

You can demand that the debt collector send you proof (sometimes called a validation notice) that you owe money and that it owns the right to collect on that debt. Debt collection laws say that they must stop calling you until they can prove they purchased your debt legitimately and that you actually owe what they say you owe.

There is a chance that the debt is in your name, even if you weren’t the one to borrow the money. If that happens, you may be a victim of identity theft. You’ll want to communicate that you were a victim of identity theft to the debt collector and file a police report. You should also check your credit report to see if you can identify any other fraudulent debts or bills in collections.

Pay your debt

As obvious as it may sound, the best strategy to keep debt collectors at bay is to pay your debt. Can’t afford to pay it in a lump sum? Not a problem. There are other ways to chip away at debt.

Consider reaching out to your lender or collections agency and asking to set up an installment plan. This lets you downsize your debt through a series of manageable monthly payments. Simply reaching out and talking with your collections agency is a great first step, as it demonstrates a proactive willingness to pay what you owe. And when you’re in contact with your collector, they’re far less likely to resort to aggressive tactics.

Negotiate your debt

Typically, a debt collector will buy debts for much less than the full amount, meaning they might be more willing to negotiate than the original creditor.

You can work with the debt collector to settle your debt for more than the full amount. If you owe $1,000, offer a one-time $300 payment to settle the debt.

If you go this route, you must get everything in writing. Unsavory debt collectors might attempt to take the payment, then conveniently “forget” the agreement and keeping coming after you for more money. It’s worth working with an attorney to make sure everything goes smoothly.

Keep in mind that settling for less than you owe may show up on your credit report, which could damage your credit score.

Consolidate your debts

If you have good credit and a steady income, you may benefit from rolling all your debts into a single loan. Do it right, and you could end up with a single, more manageable loan payment with lower interest rates. However, it’s important to take a hard look at your spending habits before using a debt consolidation loan. A debt consolidation loan will only help you get out of debt if you reduce your spending or increase your income.

Explain why you can’t pay your debt

Suppose you’re dealing with an expensive medical emergency or a death in the family. In moments of crisis, you may be entirely unable to pay your debt, even in smaller installment payments. So what should you do?

Again, speak to your collections agency. Simply explaining your situation goes a long way. In a lot of cases, collectors may be willing to put a hold on your interest for a period of time while you get your crisis under control.

Send a cease and desist letter

If you’re receiving a barrage of calls from your debt collector, send them a cease and desist letter by certified mail or fax. Be sure to include your name, address, name of the creditor you owe the debt to, and a straightforward statement asking them to stop contacting you. Once your collector receives the letter, they cannot contact you again.

But remember, unless your debt was in error, you still owe them. That means that if your debt is left unpaid, they can still sue you for it.

In most states, state law outlines a statute of limitations for debt. After the statute of limitations passes, debt collection harassment may continue, but a debt collector can’t sue you to force you to pay what you owe. If the statute of limitation has passed, a cease and desist letter should stop the collection activities.

Keep a phone call log

If the calls persist despite your letter, write down the date and time each time the collector calls. Also, make a note if the collector breaks any of the other rules listed above. This will be crucial information when you file a complaint with the CFPB.

Consult a consumer rights attorney

If a creditor or collector violates your rights, you may be able to take a chunk out of your debt by filing a legal case. Assuming you get a court judgment in your favor, your collector generally gets saddled with your legal fees — plus an extra $1000 or more.

On top of $1,000 for the violation, some plaintiffs also get money for emotional damages. To get this additional cash, you’ll need to give examples of how your collector’s violations harmed you. This “harm” could be anything from lost sleep to lost appetite — anything that shows evidence of emotional distress.

Of course, this only applies if you can prove that the collector violated your rights. That’s why it’s so important that you keep a log of all incoming calls and other attempts at contact.

Many attorneys specialize in fighting bad debt collection practices, so look for a law firm with experience with debt-related cases.

Know when to ask for help

But what should you do if debt collectors are stressing you out, but not actively violating your rights? And how should you proceed if you can’t afford to pay what you owe?

A competent debt settlement firm can help you to negotiate an installment plan or even to reduce your total debt load. Plus, they can negotiate with your creditor on your behalf. Having an ally in your court can get the collectors off your back and help you build a roadmap to a debt-free future.

Don’t make a “good faith payment”

Has your debt collector asked you to make a small payment “as a show of good faith?” This is a common trick — don’t fall for it!

Often, these small payments are just a trick debt collection agencies use to extend the statute of limitations — the period of time in which a debt collector can sue you for the debt. That’s because, in most states, the statute of limitations starts on the date of your last payment. So if it’s been a few years since you made a payment, you might be scot-free in a couple of weeks — unless you restart the clock with a “good faith payment.”

How should you handle debt collector harassment?

If you’re dealing with harassment from debt collectors, it might feel like the end of the world. But there are steps you can take to get your life under control again.

Do you need help getting your debt under control and keeping the debt collectors at bay? The right debt settlement firm can help. Click here to browse our vetted list of top-rated debt settlement firms. You can compare their offerings side-by-side and read reviews from past customers. Enlisting the right ally is a great first step toward a debt-free life.