Debt Collection Agencies: Big Guys Versus the Little Guy
Debt Collection Agencies: Big Guys Versus the Little Guy
It's ironic that, although individual debt collectors don't earn much money, many feel as though they have enormous power over your money. Although the federal Fair Debt Collection Practices Act expressly prohibits debt collectors from using tactics meant to intimidate or harass consumers, they often engage in those tactics anyway.
If you've been contacted by a debt collection agency, you may feel like it's a battle between David and Goliath. After all, third party debt collection agencies do wield enormous power. They can ruin your credit, making it more expensive for you to buy a home or borrow money (through being forced to pay higher interest rates), they can ruin your reputation (by contacting your friends, family, and coworkers), and they can ruin your peace of mind (by calling incessantly, or at all hours of the day or night). They can also ruin any semblance of financial stability, through using nefarious means to obtain legal judgments against you.
That's why, when a debt collector calls, it's important to know you rights. For example, you have the right to see evidence of how much money you owe, to whom you originally owed the money, and what your rights are with regard to disputing the debt.
Your right to dispute is especially critical, because third party debt collectors may not have correct information. Especially when they're working on behalf of debt buyers (those who buy debt from original creditors for a fraction of what it's worth), collectors often have very little information to go on. They may have a name, or an address, or a phone number, and then simply get creative. Your name might be similar to the name of the person who owes the money, or perhaps your phone number once belonged to someone who owes the money. Maybe the debt is yours, but you paid it off ages ago. Perhaps the debt is very old, and the statute of limitations has run out and the debt is no longer legally collectible.
When you decide to dispute a debt, you must do so in writing, typically within 30 days of receiving a written notice from the debt collector. Make sure that you send the letter via certified mail, with return receipt requested. You may also wish to check your credit reports to see if the collection agency has dinged your credit. If so, you should file a notice of dispute with the credit reporting agencies. By law, they are required to put your dispute notice in your credit file.
The bottom line, however, is that fighting a debt collection agency is very much a David vs. Goliath situation. Oftentimes, it pays to have an advocate by your side. If you feel that the situation is getting out of control, or that you're completely stressed out by a debt collector, it's probably time to contact a fair debt attorney. Once the collector knows that you have legal representation, the FDCPA says that all communication must go through your attorney. In other words, the calls and letters will stop. Best of all, if you've been victimized by debt collector abuse, legal representation shouldn't cost you a dime. That's because the FDCPA contains provisions that mandate that agencies that violate the law are responsible for paying your attorney fees.
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