Credit Collection Tips

When the bills are starting to pile up, a phone call from a debt collector is one of the most unwelcome to deal with. While avoiding phone calls is the easiest solution to not dealing with credit collection agencies, ignoring the calls and letters will only make matters worse.

Deal with the Original Creditor

Individuals who receive calls from credit collection agencies can try calling the credit agencies directly to see if they can set up a payment plan. Before a debt goes to collections, creditors will also work with a customer to help avoid nonpayment of debt by lowering interest rates and/or monthly bills.

Know Your Rights

The Federal Trade Commission set up the Fair Debt Collection Practices Act to help protect consumers. This act states that credit collection agencies cannot harass customers, use threatening or abusive language or continuously make phone calls to annoy customers. To document calls from credit collectors, record the phone conversation after first getting the collector's permission to do so or simply note the date and time of the call, whom you spoke with and the information discussed. If an individual feels his rights have been violated under the Fair Debt Collection Practices Act, he can call the state's attorney general to file a complaint.

Protect Bank Accounts

A credit collection agency can file a lawsuit against a customer for not paying her debts. If the ruling is in favor of the creditor, the court can freeze the customer's checking or savings account to recoup the money owed. However, money received from the Social Security Administration, disability or child support is exempt from payments ordered by the court. Therefore, a customer dealing with a credit collections company should notify the bank and collections agency regarding any exempt funds.

Protect Against Fraud

A consumer should always get credit collection agreement payments confirmed in writing instead of giving personal bank account information over the telephone. Receiving a written statement ensures that the credit collection agency is legitimate and confirms the payment amount and terms. When making a payment to a credit collection agency, a customer should use a third-party payment service or a money order in lieu of a personal check so personal bank account information is not released to the collections agency. Additionally, a consumer can further protect his funds by not allowing a collections agency to make electronic withdrawals directly from his bank account.