While the days of debt collectors sending sheriffs to your home are long gone, for some, contemporary debt collection methods can still cross the line. In an unprecedented recent ruling, the Federal Trade Commission (FTC) announced the largest penalty ever imposed on a debt collection agency for allegedly threatening and harassing consumers, disclosing their debt to third parties, and numerous other infractions.
“We want consumers to understand their rights if their debts go into collection,” says Frank Dorman, spokesperson for the Federal Trade Commission. “The more people know about managing their debt and dealing with debt collectors, the better off they will be.”
What exactly are your rights when it comes to debt collections? Check out these five things you need to know to avoid unscrupulous practices by your creditors.
Debt collectors cannot harass you. It is against the law for debt collectors to harass consumers, including issuing threats of violence, publishing a list of names of people who refuse to pay their debts, using obscene or profane language, or repeatedly using the phone to annoy someone. They also cannot call you before 8:00 a.m. or after 9:00 p.m. A debt collector may contact you in person, by mail, telephone, telegram, or fax but cannot contact you at work if the collector is aware that your employer prohibits it. To stop a debt collector from calling you must write them a letter–be sure to keep a copy for yourself–and send it certified mail.
Debt collectors cannot lie to you. Debt collectors may not falsely claim that they are attorneys or government representatives, that you have committed a crime, represent that they operate or work for a credit reporting company, misrepresent the amount you owe, indicate that papers they send you are legal forms if they aren’t, or indicate that papers they send you aren’t legal forms if they are.
Debt collectors cannot touch your earnings. This one is a little tricky. Debt collectors cannot say you will be arrested if you don’t pay your debt or that they’ll seize, garnish, attach, or sell your property or wages—unless a judge has ruled in their favor. Remember, debt collectors may not engage in unfair practices such as trying to collect interest, fees, or other charges on top of the amount you owe unless the contract that created your debt–or your state law–allows the charge, deposits a post-dated check early, or takes or threatens to take your property.