Can Collection Agencies Find Out How Much Money You Have in the Bank?

Federal law limits collection agencies from using certain tactics against you as they attempt to collect debts. A collection agency won't legally know how much you have in your bank account unless you volunteer that information or the agency wins a lawsuit against you. If a creditor, or that creditor's collection agency, believes the amount of your debt is worth suing you for, then money in your bank account can be seized through court order.

Collection Attempts

It's against federal law for a creditor or debt collector to call your bank asking about your bank account or telling your bank that you owe a debt. Debt collectors are only allowed to discuss your debt with you, your spouse, your attorney or your original creditor. If you have an attorney representing you regarding a debt, the debt collector has to direct collection letters and phone calls to your attorney, not you. A debt collector can only contact your bank, or any other third party, one time and only to ask for your address, phone number or where you work.

Bank Information

One legal way that a collection agency can find details about your bank account is if you use a debit card or check to make a payment to the collection agency. Another legal way is if you set up a payment plan with the collection agency using automatic withdrawals from your bank account. Having your account information doesn't tell a collection agency how much you have in your bank account, but it does make your account more susceptible to seizure if you default on your payments and the collection agency successfully wins a civil judgment against you.

Judgment Required

A collection agency can only seize money from your bank account against your will with a civil judgment. A civil judgment is a court order that awards the collection agency an amount the agency successfully sued you for. The court order instructs your bank to hand over funds in your bank account to the collection agency to satisfy the judgment. Unfortunately, a collection agency will know how much you have in your bank account by this method after it takes possession of your money.

Fraud Protection

Sometimes your first contact with a collection agent will be by phone. You're under no obligation to give out your checking account or debit card information over the phone, especially if you don't know the caller or the debt in question. Protect your bank information unless you are sure you're talking with a legitimate debt collector, you recognize the debt and you intend to pay (see Resources). The Federal Deposit Insurance Corporation (FDIC) warns of scam artists who prey on people who are behind on their bills.