“Thank goodness for caller identification.”
That’s likely the refrain of late-paying mortgage, credit card, and auto loan borrowers, just to name a few, who dread talking to debt collectors on the phone.
Caller ID is the one saving grace of being mired in debt, you know when debt collectors are calling you, and don’t have to talk to them.
But eventually you do. After all, you can’t shake collectors forever. In fact, it’s much better to have a plan for dealing with harassing debt collector phone calls, and BankingmyWay has such a plan laid out for you.
First, know you’re not alone - According to the International Association of Credit and Collection Professionals, approximately $40 billion annually is garnered by debt collectors. But these collectors aren’t always professional about it. The Federal Trade Commission reports 78,000 complaints from U.S. consumers in 2008 against debt collectors. The FTC also reports that 34% of consumer complaints in 2008 were for harassment by debt collectors -- that’s up from 19% in 2007, suggesting that the rough economy has debt collectors on edge.
Put yourself in their shoes - From the debt collector’s point of view, federal rules on collection (the Federal Communications Commission joins the FTC in regulating debt collectors), make their jobs difficult and often confusing. For example, a debt collector cannot leave a voice mail regarding a debt. That’s a violation of consumer privacy, the government says, but that only forces them to keep calling, and driving consumers to distraction in the process. Perhaps even more disturbing, the debt collection industry has started circumventing phone restrictions by using social networking tools to nag tardy consumers, even texting them, instead of calling.
Know your rights – Debt collectors are both seasoned and cunning about getting consumers to pay up. But, thanks to the Fair Debt Collection Act, there are some things they cannot do. For instance, they can.
• Only call you from 8 AM to 9 PM – if you’re getting a call at, say, 10 PM, you have the right to sue the debt collection agency for damages under the FDCA.
• Only talk to you or your legal council (family members or roommates are out of bounds)
And they cannot . . .
• Threaten you with a lawsuit over the phone.
• Fudge the numbers on the amount you owe
• Threaten to take any money from your 401k plan, and to an extent, from your IRA. 401k plans are protected in full from creditors – they can’t touch a dime. It’s less so for IRA’s as assets up to $1 million are protected, but that’s only in a personal bankruptcy situation. (Check with your state’s consumer affairs division to see how it handles IRA protection from creditors).
• Use obscene or threatening language
Check the FTC’s web site for a full slate of “do’s and don’ts” that protect consumers from harassing debt collectors.
Send a “cease and desist” letter – You can stop debt collection phone calls by getting the name and address of the debt collection agency and send them a letter, citing the FDCA, and demanding they stop calling you on the phone. That won’t halt the debt, but it can buy some time and some peace of mind to pay it off.
Negotiate – Debt collectors loath to admit this, but most are willing, by order of the original creditor, to take less than the full amount to close the debt and get it off the books. So, if you owe $5,000 to a furniture store and offer $3,500 to close the debt, the furniture store may direct the debt agency to take the deal. The debt collector likely won’t bring this up, but you should.
One final tip -- To get the better of debt collectors, it helps to think like one. To that end, use your favorite search engine and type in “tips on becoming a debt collector” or “become a debt collector”. Then, read up on the tricks of the trade so you won’t be surprised when they’re actually used on you.
Above all else, keep hope alive. States like New York, Georgia and New Jersey are actively trying to toughen up the laws on debt collectors, and expect many more to follow suit.
In the meantime, use the tips above to make sure you’re not the victim on an out-of-line debt collector.
—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.