The phone rings for the 1,000th time and it's a debt collector again. Do you have any rights? What are they?
How to deal with debt collectors
When a debt collector harasses the wrong person, the law is not written to protect you. That's because it never occurred to the members of the U.S. Congress that bill collectors would be slimy enough to try to intimidate those who don't owe the debt.
However, under the law, if you do have a debt, you also have the right to send what's called a drop dead letter. This letter will prevent the collector from contacting you again about a debt. Collectors can't call at work once you say they can't. (Though you can still be sued against the debt you legitimately owe.)
Read more: More sample complaint letters
To avoid collection calls in the future, I've advised people to get a Google Voice phone number and give that when you apply for service to a company. So you're not creating a situation where a debt collector could potentially get your real cell or home phone number down the road.
Of course, if you owe a debt and have the money, of course I want you to pay the debt!
But know that if you pay even so much as one penny against an old debt that's not legally active anymore, the entire debt comes back to life even if it had been outside of the statute of limitations. (This is not legal, but it is common among rogue collectors who don't respect the law.)
Most often, though, people can't afford to pay. In that case, collectors may say horrible things. They may tell your kids you're going to jail if they get them on the phone. Or they may call your neighbors to try to use them to humiliate you into paying.
Another thing they're doing right now to trick you into talking with them is caller ID spoofing. They have the ability to make the caller ID come up with the name and number of a relative or a local business.
Read more: Phone scams make a comeback
Remember this: If a collector is harassing you, you can shut down their harassment by certified mail using my drop dead letter. And know that they can't threaten to kill you or physically harm you. Mainly they want to create intimidation and fear. Report them immediately to the Consumer Financial Protection Bureau using this complaint form.
If you legitimately owe a debt, you have specific rights under federal law. Here are a few pointers to keep in mind when dealing with collectors:
- Always record any calls from/to a collector. Both parties must consent to recording in California, Connecticut, Florida, Hawaii, Maryland, Massachusetts, Montana, New Hampshire, Pennsylvania, and Washington.
- If your debt is outside the statute of limitations, you are not required to pay up. However, you should honor your obligations when you're financially able to do so. The statute of limitations is 3 to 4 years on many debts in most states. Yet a negative mark resulting from a delinquent account can hang out on your credit for up to 7 years.
- You have the right to tell a collector never to contact you again. Use a drop dead letter and send it via certified mail. You can still, however, be sued against the debt even after sending this letter.
- If you legitimately owe money and wish to make a deal to pay, never give a collector your checking account number over the phone. Collectors routinely take more money than they say they'll take. Pay only by money order.
- Never pay one cent until you have an agreement in writing stating your payment(s) will resolve the debt in full.