When debt collectors call you may owe money but you still have rights

Ebony, July, 2008 by Michelle Singletary

The call came just before dinner. The woman asked me to confirm who I was. I responded: "You called me. How can I help you?" I was more than annoyed. The woman then said I had a past-due debt and needed to pay up. She told me the company and debt amount. "No, you have the wrong person," I said. My denial clearly irritated the collector. She insisted I was trying to dodge my debt.

It was at this point in the conversation that I relied on what I knew about the Fair Debt Collection Practices Act. I began questioning her about this debt I supposedly owed. She had to admit it didn't appear to be mine after all.

As the economy continues its mud slide, many people are getting calls from debt collectors. Job losses, resetting mortgage interest rates, and rising gas and food prices have stretched many people to the point where they can't pay their bills. Whether you actually are past due on a debt or are being mistaken for someone else who is behind, you have rights when a collector calls.

"In recent years, complaints against collectors have increased significantly," says Edward Johnson, president and chief executive of the Better Business Bureau in the District of Columbia.

In its most recent report to Congress, the Federal Trade Commission reported that in 2007, consumer complaints about third-party debt collectors increased both in absolute terms and as a percentage of all complaints that consumers filed directly with the commission. The FTC received 70,951 Fair Debt Collection Practices Act complaints in 2007.

Under the debt collection act, collectors can't harass debtors. But last year nearly 20 percent of complaints to the FTC alleged that collectors did just that. People complained that collectors harassed them by calling repeatedly or continuously. Nine percent of consumers claimed that a collector had used obscene, profane or otherwise abusive language.

This spring, the Florida attorney general won a $1.3 million judgment against a Jacksonville, Fla.-based collection agency for violations of Florida and federal collections laws. The company was found to have used deceptive practices in an attempt to scare, harass and intimidate debtors into paying amounts far in excess of their debts. Victims testified, among other things, the company used tactics such as posing as law enforcement officers, threatening seizure of property, and even threatening bodily harm.

If you are getting calls from collectors, it's important that you know your right. Here are your rights as outlined by the FTC based on the Fair Debt Collection Practices Act:

* Collectors can't harass you. Don't tolerate threats of harm to you or your reputation; and the person calling can't cuss you out.

* Collectors can't harass you by inundating you with telephone calls. Debt collectors may not contact you at unreasonable times or places unless you agree, or at work if you tell them that your employer disapproves. Generally that means they can't call before 8 a.m. or after 9 p.m.

* To stop the calls, write a letter to the collection agency telling it to cease calling.

However, the agency is permitted to contact you to let you know about a specific action that it plans to take. Writing this letter doesn't mean you don't have to pay the debt if you owe it. You could still be sued by the collector or the original creditor.

* Collectors cannot contact your friends, relatives, employer or others, except to find out where you live and work. They can't tell others that you owe money.

* Collectors cannot make any false statements, including threats that you will be arrested.

There are many debt collectors who follow the law, but if you run into one that doesn't, know your rights. Being a debtor doesn't mean you're a deadbeat. It also doesn't mean you have to tolerate being treated with disrespect when a collection agency or attorney comes calling.

Michelle Singletary is a nationally syndicated personal finance columnist for The Washington Post.