Debt Collection Agencies: Understand Your Consumer Rights


In the past two years, and now that the holiday season is in full swing, many people have fallen behind on everything from credit cards to car loans to mortgage payments. When that happens, companies often sell their overdue accounts receivable to a debt collection agency.

While falling behind on payments can be frustrating and scary, when debt collection agency calls start it adds a new level of stress. No panic. Instead, understand what rights you have as a consumer, learn what collection agencies can and cannot do, and then take steps to resolve the problem.

Rules for the collection process to protect consumers

The Federal Trade Commission (FTC) sets the Fair Collection Practices Act (FDCPA) in the United States. The FDCPA prohibits debt collection agencies from engaging in improper, dishonest, or fraudulent practices when collecting debts.

The FDCPA regards anyone who regularly collects accounts receivable from others as a collection. This means that debt collection agencies, lawyers who collect debt, and companies that buy debt and then try to collect it are all covered.

The FDCPA applies to personal, family, and household debts, including money you owe for credit cards, car loans, medical bills, and your mortgage. It does not apply to debts that arose from the operation of a business.

When a debt collection company calls, it must respond with a written “confirmation message” within five days. This notice must include the name of the creditor to whom you owe the money, how much you owe, and what to do if you believe you do not owe the money.

You must respond in writing within thirty days of receiving the notification of debt in order to avoid further action or contact by the debt collection company. If you have proof of payment of the claim, you will need to provide it as well. Your writing and any evidence denying the guilt should be arrive within thirty days at the collector’s place of business. In the event of a debt dispute, it is always a good idea to send your letter by registered mail and request a signature to confirm receipt by the collector.

You may want to speak to the collection agency at least once to see if you can resolve the problem. However, if you do not want the collection agent to contact you again, document this in writing. Sending a letter does not settle the claim and does not stop the collection of the claim, but it may affect the communication between the debt collection company and you. If an attorney is representing you on the debt, the debt collection agent must negotiate with the attorney, not you.

The Consumer Financial Protection Bureau (CFPB) updated the practices bill collectors use in communicating with consumers and what people can do.

What collectors can and cannot do:

  • CAN contact you by phone, letter, email, SMS or. to contact social media as long as they identify themselves as a debt collection agency
  • CANNOT pretend to be someone else, such as a government agency or credit bureau, or use a false company name
  • CAN contact you at work unless you tell them you are not allowed to take calls there
  • CANNOT call before 8:00 AM or after 9:00 PM (unless you agree)
  • MAY contact other people close to you to find your address, phone number, and job location, but MAY NOT contact them or discuss your debts with them more than once (other than your spouse or attorney).

the FDCPA details other practices that are taboo for debt collection agencies, including harassment, misrepresentation, and unfair practices. Some specific things they can’t do are:

  • Use threats of violence or threats of violence, or use obscene or profane language
  • Publish a list of the names of people who cannot pay their debts
  • Falsely claim that you have committed a crime
  • Are you misrepresenting the amount of money you owe
  • Lie about whether the papers they send you are legal or not, or give you what looks like an official document if it isn’t
  • Tell them that if you fail to pay your debts, or say they will seize, attach, attach, or sell your property, unless permitted by law, you will be arrested
  • Threaten legal action if it would be illegal or if you really don’t intend to
  • Try to collect interest, fees, or other charges in addition to what you owe unless the contract that created your debt – or your state law – allows the charge
  • Deposit a post-dated check early
  • Contact you by postcard or in any other way that can be externally identified as being from a debt collection agency

When to do when dealing with a debt collection agency

Track all calls you receive from a debt collection agency and save all written statements. Do not reveal any personal or financial information until you have verified that the collection company is legitimate. If you can make an agreement to pay monthly or reduce your debt owed, the details will be sent to you in writing. When you settle your debts, make sure you receive and keep documentation of the debt that has been settled.

What Should You Do When You Sued a Collection Agency?

Do not ignore a subpoena. A debt collection agency can sue you for recovery, and a court ruling can result in third parties like your bank or employer using funds to pay off your debt. If you fail to appear in court, you will lose your chance to fight an attachment. Make sure you or your attorney respond to a lawsuit by the date on the court records.

What Should You Do If A Collection Agency Is Breaking The Law?

If you believe a debt collection agency has broken the law in dealing with you, you have one year from the breach to file a lawsuit. Remember, even if the debt collector breaks the law, a legitimate debt won’t go away.

You can submit complaints and reviews from debt collection agencies below and if the recovery sounds suspicious or you have no debt, report it

There are also government agencies that you can contact: In the US, yours is Attorney General, that FTC, and the CFPB can help. Many states have their own debt collection laws, and the Attorney General can help you with that.

Debt collection also gives fraudsters the opportunity to collect personal information by impersonate credit or debt relief services. Learn more about how to detect and report this type of fraud below If you have been the target of potential scam, you are helping others avoid the same problem by reporting your experience below

Sources:, CFPB, FTC: United States Federal Trade Commission, – not protected by copyright. 17 USC 403.


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