What is collection agency?
As per the centralized Fair Debt Collection Practices Act (FDCPA), once a collector gets in touch with you, it has to send you a notice in black and white, bringing up the financial institution’s name, the due amount that you have to present as well as your rights to confront the balance due. By sending a DV letter to the collection agencies, through certified mail, you are requesting the CA to present the confirmation that you are indebted to them. This practice helps to uncover out whether the claims made by a debt collector are authentic or not.
Small organizations normally employ third party agencies to recover money, which is to be paid to them. The energy, time, as well as human resources needed to retrieve unsettled account balances divert their employees from focusing on main business responsibilities. Certainly, collection agencies will never offer their valuable services for free. In fact, they charge a certain percentage of the amount, which they effectively recover. Usually the percentage varies from 20 to 35 percent. Companies, which make use of services, offered by collection agencies, believe that is better to pay a percentage to collection agencies, for recovering unsettled than to recover nothing at all.
Debt collectors used by the collection agencies generally have scandalously bad reputes for being excessively harsh and discourteous with the defaulters, as they try to recover outstanding dues. Being a defaulter, you have the right to expect good treatment, as per the Fair Debt Collection Practices Act or FDCPA. Collection agencies are supposed to strictly follow the guidelines laid down by the FDCPA or else they have to suffer severe consequences.
How to know if you owe the collection agency any money?
Requesting a debt validation after you received the collection notice and you are not sure if you owe them the money or not. As per the centralized Fair Debt Collection Practices Act (FDCPA), once collection agencies contacts you, it has to mail you a notice in black and white, mentioning the creditor’s name, the outstanding amount that you need to pay as well as your rights to challenge the debt. By sending a debt validation letter to the collection agency, through certified mail, you are challenging the agency to provide evidence that you are indebted to them. This process helps to find out whether the claims made by a debt agency are genuine or not.
Another way, by means of which you can find out whether you owe any money to the collection agency or not, is by getting hold of your annual credit report. A genuine collection agency will normally include your collection account into your annual credit report. Every year you are allowed to request for one copy of your credit report, from all the three reporting agencies, absolutely for free.
How many ways a collection agency use to contact you?
A collection agency can contact you through various ways, such as by means of mail, telephone, telegram or fax. A collection agency does not have the right to contact you at inconvenient times and places. They should not call you prior to eight a.m., nor are they allowed to contact you after nine p.m., until and unless you give them the permission to do so. In case a collector is aware of the fact that your company does not allow non-work associated communications, then he should not contact you during your office hours.
Can a collection agency sue you?
The majority of the debt collectors receive payment in the form of a performance bonus or commission, which is dependent on the total debt amounts that they retrieve. Normally, the debt collectors try several different collection strategies to compel the defaulters pay the outstanding dues, so that they can take home their bonus or commission. So, if you owe a debt to a creditor and fail to pay it back, then the collection agency has the right to sue you. As soon as the collection agency receives a Judgment from the court, it can seize your personal property, such as bank accounts, houses and cars as well as can garnish your earnings.
How to stop collection call?
First of all, if a collection agency harasses you through constant phone calls then try not to answer the calls. The moment you find out that the person calling you is a debt collector, immediately disconnect the phone.
Secondly, you can also write a “cease and desist” letter. In this letter you need to inform the agency to stop making contacts with you. Always remember to mention your account number, address and name in the letter. As soon as the agency gets the letter they will stop making further contact with you. However, this does not mean that the agency will stop their other collection activities, in order to recover the debt amount from you. Moreover, “cease and desist” letter will only stop the agency from contacting you again but you are still liable to pay the debt amount. If you fail to clear your outstanding dues then the agency can even sue you.
Thirdly, whenever you receive calls from debt collectors try to note down the source telephone number, the call time, the caller’s name and a synopsis of your dialogue. If your state law permits then you can even record the entire conversation between you and the collector. Even if you don’t record the call then also you can tell the agency that the call is being recorded. The moment the agency hears this they will immediately behave appropriately.
Fourthly, try to negotiate your payment terms and conditions with the agency. Talk with them about how you can repay your debt quickly. Try to reach a deal, which will prove to be beneficial for both you and the creditor. This way you can win the confidence of the collection agency that you are eager to clear the outstanding dues. Once they start to belief you they will stop making collection calls to you.
Lastly, if all the above mentioned techniques fail to put to an end to the collection calls then you need to file a formal complaint against the agency, at the state FTC office. It is vital for you to produce documents or files in support of your accusation of harassment.
Where to report if you know the CA has violated the law?
If you think that a collection agency is illegally chasing you or even threatening you, then you must take immediate action, without wasting any time. You do not need to sit back and become a victim of their exploitation, simply owing to the fact that you owe money to the agency. You don’t even need to feel scared. If an agency violates the guidelines laid down by Fair Debt Collection Practices Act, then you must get in touch with the state attorney general‘s office or hire a private attorney. You can also contact the Federal Trade Commission or FTC at 1-877-FTC-HELP. You should never think that you are powerless and unaided and have to tolerate collection agency mistreatment.