Collection agencies are private organizations hired to collect money owed to a creditor. Many banks and lending institutions have their own collection departments to manage past-due accounts. Collection practices are highly governed. Creditors must adhere to federal regulations to legally collect debts. Government protection agencies support the rights of consumers who are harassed by collection agencies.
Types of Harassment
Certain collection practices are off limits to debt collectors. They may not harass, oppress, or abuse you or any third party they contact. Collection agencies cannot use threat of harm nor can they use profane language. In addition, collection agencies cannot call debtors repeatedly during the day. Debt agencies that use false or misleading practices when attempting to collect a debt are in violation of the law.
Contact Rights
Debt collection agencies may only contact consumers during certain hours of the day unless the consumer agrees otherwise. Agencies cannot contact debtors at inconvenient times such as before 8 in the morning or after 9 at night. Furthermore, debtors have the right to request either verbally or in writing that agencies not contact them at work. Consumers also have the right to stop a collection agency from any further contact. The request must be made in writing and should state that all contact from the agency cease immediately. After the collection agency receives the request, they may contact the debtor only to inform them that there will be no more contact.
Account Validation
If a collection appears on a personal credit report, consumers have the right to request a validation of the debt owed. Collection agencies cannot give false information to a credit reporting agency about a consumer nor can they represent that they work on behalf of a credit reporting agency. The collection agency must provide the consumer with information about the debt, including the amount owed and the original creditor. The agency is prohibited from contacting the consumer during the account verification process. If the debt is invalid or erroneous, the collection agency must cease all contact with the debtor. It is important to note, however, that if the agency identifies that the debt is valid, contact may start up again.
Consumer Complaints
Consumers have the right to file a formal complaint against a harassing collection agency with the Federal Trade Commission or a local consumer protection agency. Consumers also have the right to sue a collection agency that violated the law. If a consumer wins a lawsuit against the agency, the judge may require the agency pay damages resulting from the collection practices, such as lost wages or medical bills. Even if there is no proof of damages, the judge can still award payment of up to $1,000 as well as attorney and court costs.
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