If you’re being harassed by a bill collector, you’re not alone. According to Gary Rivlin, author of the Daily Beast/Newsweek article “America’s Abusive Debt Collectors,” the Federal Trade Commission (FTC) received more than 50,000 complaints about severe harassment in 2010. That’s a 25 percent increase over 2009 and three times as many complaints as the agency handled in 2002.
I’m not surprised. I had my own troubles with a debt collector in 1994. (I mentioned him last week in “Get Out of Debt While You’re Still Young” – he’s the thug who made me pay twice for a new car bumper.) My point is, if a bill collector is willing to break the law during an economic boom, don’t expect him to clean up his act when the economy is in the toilet.
Having Debt Doesn’t Make You a Bad Person
I believe that most people who owe money want to pay it back. When they don’t pay, it’s usually because they don’t have the cash, not because they’re trying to rip someone off.
But debt collectors who resort to illegal practices don’t see it that way. They treat you like you’re the criminal. They’re bullies. It doesn’t matter to them that having debt has already taken a terrible toll on your self-esteem. They kick you when you’re down and act as if you don’t have a right to breathe the same air they do.
Truth is, most young adults entering the U.S. work force have had little to no personal finance training. It doesn’t help that the fine print on credit agreements is understandable only to bankers and lawyers. That’s why so many people fall prey to predatory lending practices—they simply don’t understand what they’ve signed.
Why the CFPB Needs a Leader Right Now
Forget the controversy surrounding President Obama’s appointment of Richard Cordray as Director of the Consumer Financial Protection Bureau (CFPB). When you consider that since 2009 there’s been a 66 percent increase in complaints about collectors threatening violence, the fact that Cordray’s installment was a “recess appointment” just isn’t that important.
What does matter are the teeth that the director brings to the new bureau. You see, under the Dodd-Frank Act, which created the CFPB, the bureau could not supervise so-called “nonbanks” (such as mortgage originators and servicers, private student lenders and payday loan firms) until a director was named. The effect was that these types of businesses have escaped federal oversight since the CFPB opened last July. Having a director in place finally activates the full powers of the bureau, and that’s good for consumers.
How to Handle a Nasty Debt Collector
If a collector is harassing you about a personal, family or household debt, his or her actions may be illegal under the Fair Debt Collection Practices Act. The law is very specific in terms of how and when collectors may contact you. The use of obscene language and threats of violence are specifically prohibited, for example, as are a host of other strong-arm tactics.
- Ask for written notice. Under the law, a collector must send you written notice stating the amount you owe and the name of the creditor. If you dispute the debt in writing within 30 days, they have to leave you alone (unless or until they furnish proof of the debt, in which case they may renew their collection activities).
- Hang up the phone.
- Start a paper trail. Write a certified letter (return receipt requested) telling the collector to stop harassing you. Once they receive your letter, they’re not allowed to contact you again except to say there will be no more communication or to notify you of impending legal action.
- Hold onto all written correspondence and keep notes. Maintain a log detailing each call (time, location, language used, threats etc.). Be sure to get the person’s name who is calling—each and every time.
- Tape your telephone conversations. Secret phone taping is allowed in thirty-five states and the District of Columbia. If your state doesn’t allow secret taping, you must ask permission from the caller to record the call. ConsumerAffairs.com even provides a handy list of the states that allow secret phone taping.
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Janice Conard is a seasoned editor and copywriter who has worked in the internet publishing space since 1999. She covers business and personal finance topics for online check printer CheckAdvantage. Visit the site to browse a huge selection of business and personal checks, including Basic Checks, Ethnic Checks and more.