When a bill collector demands money, you may have more rights than you think. Federal law sets limits on what collection agencies can do to squeeze money out of you, and some state laws offer added protection. Laws on debt collection do not get you off the hook for paying your debts, so you may want to hear what debt collectors or creditors have to say before telling them to get lost.
Federal and State
The federal Fair Debt Collection Practices Act covers efforts by collection agencies to collect on personal debt. It doesn't apply to a creditor who tries collecting the money herself, and it doesn't cover cases of business debt. Some states have passed state laws that offer further protection: California, New Hampshire and New York, for example, all apply similar restrictions to creditors as well as collection agencies. Check with your state's consumer protection agency to find out if you gain an added benefit from state laws.
Communication
Federal law requires debt collectors identify themselves when they contact you, tell you why they're calling and, within five days of first contact, tell you how much they think you owe. If you send written correspondence telling a collector to stop calling, he has to stop; if you're represented by an attorney, the collector has to go through the attorney instead. If a debt collector tries to find you through a third party, he can't divulge the fact you owe money.
Harassment
The law has a long list of tactics that are off limits to collection agencies or to creditors, also covered by state laws. Debt collectors can't threaten you with violence, use obscene language, call at unreasonable hours or call just to annoy you. They can't threaten you with jail time and can't threaten to do something -- foreclose on your house, say -- if they aren't planning to do it. Debt collectors can't demand more money than you owe and can't give false information to credit bureaus about you.
Solutions
If the company or individual trying to collect on your debts breaks the law, keep a record of every violation, the Nolo legal website recommends. Try to have someone present for future conversations or, if state law allows it, tape-record the talks. File a complaint with the Federal Trade Commission or your state's consumer agencies, and notify the original creditor. If you can prove serious, repeated abuse, you can sue for damages.
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