How Debt Collectors Work : What You Don’t Know Can Hurt You

If you are having trouble paying your bills you may be contacted by a debt collector or a company that specializes in collecting past due bills. These companies are commonly called “collection agencies.”

Now many of these companies are legitimate and follow acceptable procedures for trying to collect on a bad debt. Many do not.

Some will stoop to illegal tactics and threats to get their money. This is not only wrong but it’s illegal. Harassing you, claiming to be a credit reporting agency, threatening with bodily harm, collecting additional money beyond the debt amount, and misrepresenting the amount you owe are all tactics that some agencies try that are totally illegal.

You do know there are right and wrong ways that a collection agency can try to collect debts don’t you? The laws regarding what a collection company can do are specified by the Fair Debt Collection Practices Act (FDCPA). This law prohibits collection agencies from using deceptive, abusive or unfair practices when trying to collect a debt.

And it’s not only collection agencies that are subject to this law. An attorney who collects debts or a company who buys bad debts and then tries to collect are subject to following this law too.

What Types of Debts Are Covered?

All personal debts like mortgages, credit cards, auto loans, and medical bills, are subject to FDCPA laws. Also any typical household debt like phone, water or electricity are also included. A business’s debts are not covered by this act.

What Collection Activities Are Covered

There are many collection activities that are not allowed by the Fair Debt Collection Practices Act. For example:

  • A debt collector can only contact you during normal business hours usually between 8:00 AM and 9:00 PM.
  • Collectors may not contact you at work.
  • If you request it in writing, the debt collector cannot contact more than once about the debt. You’ll need to follow very specific steps to make this happen.
  • Collectors cannot contact anyone you know about your debt. They certainly cannot contact your employer or bank without a judgement by the court.

What You Can Request From The Collector

The collection agency must send you in writing a “validation notice” specifying exactly how much you owe. They are suppose to do this within 5 days of contacting you. They also need to specify who you owe money to. They should also tell you what you need to do if you don’t feel you owe the money.

Once you stipulate that you don’t feel you owe the money, and you do it in writing, they must stop hounding you. If they manage to prove that you owe the money, with an invoice or written statement, then they can begin to contact you again, but only within certain limits.

What If I Actually Owe The Money

If you know you owe the money but are unable to pay, often you can work out a settlement. Perhaps some percentage of the debt could be agreed upon or a payment arrangement can be reached. Remember the creditor wants there money, or at least some of it. If they take too hard of a line they won’t get anything. So most reasonable creditors are willing to talk and make reasonable adjustments.

What If I Get A Judgement Against Me

If your creditor goes to court and gets a judgement against you, then something will need to be done. At that point they can even garnish wages or go into your bank account to get their money. Hopefully it won’t have to go that far.

If you feel you are getting to that stage with your bills, perhaps it’s time to contact Brown & Associates. We specialize in debt management. WE can explain your rights and obligations and we can even counter sue if the creditor has been using deceptive or inappropriate tactics to get their money.

You can also get more information on the Federal Trade Commission website here.

What Agencies Cannot Do

Here’s some information from their website that specifies exactly what a collection agency cannot do.


Debt collectors may not harass, oppress, or abuse you or any third parties they contact. For example, they may not:

  • use threats of violence or harm;
  • publish a list of names of people who refuse to pay their debts (but they can give this information to the credit reporting companies);
  • use obscene or profane language; or
  • repeatedly use the phone to annoy someone.

False statements

Debt collectors may not lie when they are trying to collect a debt. For example, they may not:

  • falsely claim that they are attorneys or government representatives;
  • falsely claim that you have committed a crime;
  • falsely represent that they operate or work for a credit reporting company;
  • misrepresent the amount you owe;
  • indicate that papers they send you are legal forms if they aren’t; or
  • indicate that papers they send to you aren’t legal forms if they are.

Debt collectors also are prohibited from saying that:

  • you will be arrested if you don’t pay your debt;
  • they’ll seize, garnish, attach, or sell your property or wages unless they are permitted
  • by law to take the action and intend to do so; or
  • legal action will be taken against you, if doing so would be illegal or if they don’t intend to take the action.

Debt collectors may not:

  • give false credit information about you to anyone, including a credit reporting company;
  • send you anything that looks like an official document from a court or government agency if it isn’t; or
  • use a false company name.

Unfair practices.

Debt collectors may not engage in unfair practices when they try to collect a debt. For example, they may not:

  • try to collect any interest, fee, or other charge on top of the amount you owe unless the contract that created your debt – or your state law – allows the charge;
  • deposit a post-dated check early;
  • take or threaten to take your property unless it can be done legally; or
  • contact you by postcard.