For most of us, when we get a call or a letter from a collection agency we run away scared. We think that if we tear the letters and throw them in the trash bin that the problem will go away. Worst yet, we think that if we talk to them and explain the dire circumstances that prevented you to pay the bill; the collection agency will understand and walk away.
Unfortunately, life is not that simple and the problem will not go away. How do you deal with them you might ask? This short tutorial will teach you some basic but yet effective tools available in your arsenal.
First and foremost each case is different, so if you are not sure that this strategies are appropriate for you, feel free to ask questions in the forums. There are plenty of members eager to help. We are not attorneys, anything we say should not be construed as legal advice.
Lets begin, collection agencies make their money by collecting on a debt owed to one of their clients. In exchange for collecting the debt, the collection agency receives a percentage of the moneys recouped. So although you might think that if there is an error you can contact XYZ collection agency to correct it, he sad truth is that they do not care to correct any errors. The collection agency wants your money, whether you owe it or not!
They use various tactics to collect the alleged debt, their main tool is the telephone. They will call and harass you until they find a trigger that scares you and then they will use this against you to coerce a payment. Another tool in their arsenal is the collection letters, they will send you letters making threats in hopes that you get scared enough to pay them. Sad enough some of the threats are not really threats, but we understand them to be. A popular one is the following.
Quote:
If you do not pay we will take legal action.
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Automatically we assume that by legal action they mean that they will sue us in the court of law. In reality, legal action is any action that it is not illegal.
How do you fight such a formidable foe? Glad you asked that question, before doing anything outlined on this crash course guide; you must keep in mind the statute of limitation on the alleged debt. That statute of limitation varies by state, with that said, if the alleged debt is within your states statute of limitations. That means that you need to decide if you are waking a sleeping giant by disputing and fighting back. Rule of thumb is, if the debt is small "under 1k" then there is no incentive for a OC to sue you and spend more in attorneys fees; than the amount of money they will attempt to collect. However if the amount owed is in the thousands, then poking them in the eyes might get them to turn around and sue you for the alleged debt.
Before you can fight you must learn your rights, the FDCPA outlines the do's and don'ts for Collection Agencies;
http://www.infinitecredit.com/forums...3747#post13747
The FCRA outlines the way data is to be reported and the responsibilities of data furnishers as well as the responsibilities of Credit Reporting Agencies.
http://www.infinitecredit.com/forums...3745#post13745
I addition to those two, you might want to check your individual state version of the FDCPA. In some states this version of the FDCPA is more stringent than the FDCPA and you might want to file charges under your state guidelines if and when a CA violates your rights.
Now lets begin, you receive a collection call from XYZ collection agency. This is the first time you hear from them, from the first time they contact you, they have 5 days to send you a letter advising you of your rights. If they fail to do they are violating your rights. I will simulate a phone call and the ideal way it should go.
First time they call;
Quote:
Collector: May I speak with Paul Smith
You: This is Paul, how may I help you?
Collector: I am calling from XYZ collection agency, calling in reference to a debt owed to ABC Store.
You: Could you tell me your name, could you also tell me again what company you work for. "Start a log and write down the information they provide, along with the time and date of the call. Also include the phone number they called you from if available on your caller id."
Collector: "after providing the information requested" As I was saying, there is a balance on a debt do you want to make a payment arrangement?
You: Thank you for the call, please send me anything you have in writing. "Immediately after hang up the phone"
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Please note that by law they must provide the information requested! Make sure that every time a collection agency calls, you get their information and then tell them to send you anything they have on the account in writing. You want to build a paper trail, do not stay on the phone with them; all they are going to do is aggravate you and push your buttons.
Now a week goes by and you receive the collection notice from XYZ collection agency. DO NOT throw the letter away, save every piece of mail that they send you. First thing you might want to do is to verify if the letter complies with requirements set by the FDCPA "if you are not sure what this is, we can touch on it later". Afterwards you want to submit a validation request, note that time is of the essence. You can dispute any debt at any time, however under the FDCPA if you dispute the debt within thirty days from first contact; the collection agency must cease collection, until they validate the debt.
So as soon as you get the collection notice, send them a validation request. There are some samples on the board, but if you are not sure what is a validation request, fell free to ask. On your validation request you should submit a limited cease and desist. Basically you will request validation and tell them not to call you at home or at work and anything they want to say. They must put it in writing and send it to you via mail.
The cease and desist is a power tool, but if you are within the statue of limitation it can back fire. Essentially when you send a full cease and decease, the collection agency is not allowed to contact you at all, by any means except to advise you that they are going to sue you. So if you are within SOL, be careful with the cease and desist. However with a limited ceases and desist you are still allowing them to contact you via us mail.
Now tower rat in the AOC archives explains what constitutes proper validation;
TowerRat; Validation and Verification
After this letter the collection agency should not call you anymore, if they do; write the date time and the identifiying information from the collection agency. Every time they call you they are violating your rights. You can use this down the road, make sure that you send the validation request with Return Receipt Requested.
I am planning on doing a series of credit repair tips and guides, visit the site frequently. Also as information and laws change all the time, I might update this guide from time to time. So it does not hurt to check the guide occasionally. This is a work in progress...
correction
