Consumer Law

Mistakes To Avoid When Dealing With A Debt Collector

By M. Stan Herring

Our friend Denise Richardson, of givemebackmycredit.com, has posted an article that gives 5 helpful tips on what to avoid when dealing with debt collectors and debt collection agencies.

#1. Doing Business Over The Phone:
If dealing with a debt collection agency, there's a good chance you'll end up in court and will need proper documentation of your dealings with the agency. Conducting your business over the phone makes it harder to have a valid, official record of what has been said should you have grounds to sue the collection agency for harassment. Refuse to conduct business with them over the phone and instead insist all communication be done in writing.

#2. Accepting A Computer Printout As Official Debt Validation:

One of the most basic methods of credit repair is requesting a debt validation from a collection agency. Should the collection agency fail to provide you with a validation, it is required by law to remove any entries it has placed on your credit report. Upon receiving your dispute, many collection agencies will provide you with a printout containing your current account information.

Due to the fact that the Fair Debt Collection Practices Act does not clearly stipulate what constitutes a legitimate debt validation, collection agencies are free to use printouts to "prove" that you owe a debt. Even if it has met the basic criteria for a validation, all collection agencies know that printouts rarely hold up in court. Don't accept a computer printout as a legitimate debt validation. Demand that the collection agency provide you with a copy of the original contract that you supposedly signed. In many cases, they can't do so.

#3. Giving Personal Information:
Just because a collection agency is trying to collect a debt doesn't necessarily mean it has your personal information, like your Social Security number. If you give a customer service representative this information to "locate" your account, they can use it to gain information about you that they don't already have.

By giving a customer service representative at a collection agency any information about yourself other than your name, you may be helping the company validate your debt or report it to the credit bureaus.

#4. Making Payments On An Old Debt:
Although it seems backwards, paying a collection agency can really turn into a hassle and cause even more of a headache. Every state has a different statute of limitation that gives the amount of time a creditor is allowed use a lawsuit to collect a debt. After that time passes, you are safe from a lawsuit and/or wage garnishment. If you give the collection agency a payment the statute of limitation is reset. Also, if you pay with a check or automatic bank draft, the agency now has your bank information and has the ability, even though it's not legal without a court order, to empty your bank account.

#5. Not Getting Agreements In Writing:
When settling with a collection agency, one of the most important things you can do is get a representative of the company to send you a physical copy of the payment agreement. Collection agencies have high turnover rates, so if you and a representative come to a verbal agreement and the representative leaves there's a chance there won't be any record of your settlement. Getting everything in writing eliminates this problem.

We would also like to thank Denise for kindly linking to us on her site!

If you have had problems with creditor harassment or have other questions or concerns, feel free to contact us through our website or by calling 205-879-2447.

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Full post as published by Alabama Consumer Blog on February 21, 2010 (boomark / email).