The more educated you can be about debt, creditors and the laws that protect you, the more likely you are to be treated fairly. This blog is going to discuss tactics collection agencies use and how you can fight back. First, you need to understand who may be contacting you to collect on your debts – then we will go into how collection agencies may attempt to get your money.
Who Is Behind the Collection Attempts?
You potentially could be contacted by a variety of organizations in attempts to collect on your outstanding debt. The first contact will likely come directly from your original creditor. If you ignore these collection attempts or refuse to work with your creditor (or if you creditor doesn’t want to work with your repayment proposal) they may do one of two things.
One of their options is to hire a collection agency, a third-party organization, to continue collection attempts on their behalf. Your original creditor’s second option would be to sell your debt to a debt collector. The difference between these two options is significant, and it is valuable to understand.
The first difference is how they make money and the second is their relation to your original creditor. A collection agency is a service company that gets paid by your original creditor if and when their service (collecting your debts) is completed. A debt collector buys your debt from your original creditor then each goes their separate ways. Your original creditor gets paid, often a lower amount than what your debt is worth; they may choose to go the route of debt collectors because it is easier and more productive for them to get paid something, than chase you down and risk getting paid nothing. Your debt collector will then begin collection attempts that are completely unrelated to your original creditor.
In all collection agency attempts to collect your debt, you are protected by the Federal Debt Collection Practices Act (FDCPA). Debt collectors on the other hand, aren’t necessarily included under this act. Determining who is being your debt collection is important because your rights and protection will differ based on whether or not the organization attempting to collect on your debts are required to work within the FDCPA.
Collection Agency Tactics
There are some standard tactics collection agencies use to try to get you to make payments on your debt. Generally speaking, their initial goal isn’t to stress you out or make you afraid to answer the phone; however, this is a common result of their actions.
Keep in mind when dealing with collection agencies that this is their job. How you respond to their communication will likely affect future collection attempts. For example, if you respond to their first phone call and agree to meet with them to discuss options, your future communication will likely be professional and polite. If you ignore all of their attempts, they will likely get frustrated and resort to unkindly methods to get you to take some action.
At the same time, know that you do not deserve to be treated unfairly or cruelly. Be aware of these common collection techniques and create a plan for dealing with them:
- Warning letters and phone calls
This is a legal and very common method collection agencies use. Typically they progress to “warnings” or an “Urgent” status if you continue to ignore their attempts to collect on your debt. - Threats about impending lawsuits, garnishments or liens
This is a legal collection technique if the collection agency intends to pursue the actions they are threatening; however, intent can be difficult to prove in court – so if they lack intent and are merely using this threat to scare you, it can be hard to prove illegality. - Legal authority or law enforcement impersonation
It is illegal for collection agencies to pretend to be someone else or have more authority to scare you into action. They must clearly state who they are and their intent; you should request this information if they don’t give it to you right away and then verify their existence and role in your debt.
Knowledge is power. Protect yourself by educating yourself. Get started with this free ebook: The Truth About Debt Consolidation.
