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About collection agencies

When collectors are trained, many call centers require that the agent not give up control of the call. They are trained to be assertive, demanding, and to talk over the debtor during an argument. They are also taught to refer back to any and all possible consequences of non compliance. It is illegal for them to threaten any action they do not intend to or cannot take (a common, illegal threat is to prosecute the debtor for fraud).

Collection agencies are not permitted to call excessively, although the law likely differs from an individual’s opinion as to the definition of excessive. Should you tell a collector that you are going to try to obtain the money in the next few days; the collector will schedule a callback. If you do not call back, the collector will do so starting from the scheduled time/date, and continue for approximately a week. If you have made a promise to pay an amount, the collector will again set a callback time/date. In the event the money is not received and you have not contacted the collector, they will conduct follow up calls, as frequently as twice a day for up to a week. Telling a collector over the phone to stop calling is not effective. To stop all calls, you must put it in writing.

Abusive, illegal tactics by collection agencies can include the following:
Contacting you at work when you have already informed the collectors that it is not permissible
Contacting 3rd parties after contact has been made with you
Disclosing or threatening to disclose information to 3rd parties (friends, family, neighbors, co-workers, supervisors, etc…)
Threatening to have you arrested
Reporting or threatening to report false information on your credit report
Threatening any other action they cannot or do not intend to carry out
Name calling (examples include deadbeat, liar, and thief)
Using profanity
Attempting to collect a debt, or the portion thereof, that is currently in dispute
Contacting you over the telephone after you have sent a letter revoking their ability to do so
Calling in excess of what the law (your state law or the FDCPA98, whichever is more strict) permits
Contacting you in any manner after you have sent a thorough cease and desist letter—except to inform you of any action now in progress, i.e., a lawsuit

In the event of violations, you must preserve your rights. File a complaint with the FTC, the state agency that oversees collection agencies, and/or obtain a lawyer. If the agency is based out of state, you may be able to file a complaint in their state as well.

One of a debtor’s rights when dealing with a 3rd party collection agency is to demand that communications cease. The debtor can demand to be contacted by mail only, or not at all. Should the debtor send a complete CND letter, it is advisable only when the statute of limitations has run out for the debt. Otherwise, the letter will be interpreted (assuming that it doesn’t blatantly state so) as a refusal to pay the debt. The collection agency/creditor may very well file a lawsuit, viewing litigation as the only way to receive payment. A letter restricting communication to letter form only, in many collection agencies, move the debtor’s account from a collector to the compliance department (or whatever the dept is named, that attempts to ensure that the law is followed regarding debt collection) or experienced collectors will prepare a letter for the account.

It is my personal opinion that any and all correspondence sent to the collection agency be sent using certified mail. This is to provide the sender with a return receipt, which may prove very useful evidence in the event you take the collection agency to court.

Many people wish to not work with the collection agency, and instead work with the creditor. A debtor may attempt to work with the original creditor as long as they still own the account. If the debt has been sold, then it is no longer possible to work with the OC. Some entities by policy refuse to work with a debtor once the account has been assigned to a CA. This is not limited to consumer debts, and can include taxes, student loans, tuition, traffic tickets and other civil penalties. Most collection agencies that are collecting assigned debts do so on a contingency basis, and may only settle on the OC's terms.

It is important to know that collection agencies can do the following:

-Require the full payment immediately
-Not accept partial payments
-When attempting to locate the debtor, they may contact 3rd parties to obtain contact info (neighbors, friends, family members, etc…)
-Sue you for the debt (if past the statute of limitations, the defense is expiration of SOL)
-Ask you for your employer, banking info, income, etc…you are not required to give this information to them
-Attempt to collect a debt that has passed the SOL
-Use power phrases, such as “refusal to comply/cooperate”
-Explain any and all possible consequences of not paying off the debt*
Many collection agencies will perform some level of negotiating.
Simplified examples of negotiations may include the following:

-PIF demand --> settlement of 2/3
-PIF demand --> ½ down, ½ in 2 weeks or a month --> ½ down, 2 payments of 1/4
-PIF demand --> 2/3 down, partial payment plan over 3-12 months
-SIF offer, limited time only

The older the debt, the lower a company may be willing to settle for, but no matter which collection agency is attempting to collect, they will likely use boiler room tactics. In other words, the money must be in by 2 p.m., end of the day, end of the week, etc… Whenever a debtor is told that the money must be in by 2:00 p.m. (sometimes 3 p.m.), it is often because any payments received after that time will be applied to the next business day’s collections. Towards the end of the month, the collection attempts often get more aggressive. This is because most collectors/collection manager’s bonuses are based upon some form of monthly productivity, and they are striving to reach or maximize that bonus check.

The terms will soften only over time, provided the CA does not aggressively litigate. After each offer you are given is rebuffed, the collector will likely press you harder by explaining possible consequences (and in the case of abusive collections, will threaten you with things they cannot actually do).

On accounts that have passed the statute of limitations, collectors will attempt to have you verbally acknowledge the debt, especially if the call is being recorded, or having you make a token payment. Even a minuscule payment, or a promise to pay, will restart the clock. A cease and desist letter that does not acknowledge the debt, but does inform the CA that said debt has lapsed is probably the best defense.

Some collection agencies will refuse all payment plan offers, accepting only the BIF. These most aggressive companies will only take the PIF, or litigate the matter. Unfortunately, if they are legally entitled to collect the debt, they then do have the prerogative to proceed this way. Even though it isn’t “right,” it is legal. Before suing you, a debt collector must have either bought the debt, or been assigned to collect on the debt by the entity that does own it. In the event a debtor has asked for validation and is sued prior to being given said validation, then the debtor should answer with a counter claim for FDCPA8 violations.

It might be worth noting a couple of other things. First, many collectors are rarely paid a good wage. They may be paid a few dollars above minimum wage, but have the incentive of a potentially large bonus check after exceeding the amount they are budgeted to collect. The bonus can effectively double or better their standard wages. A second interesting fact is that a good number of collectors end up with the job after having been collected upon themselves, even with the same office if they live in the area.

*There is a difference between giving possible consequences and threatening.
For example: A collector may explain that failure to pay a traffic citation can result in the driver’s license being suspended (if that in fact can happen). A collector may not state that he/she is going to suspend the license unless the debtor pays.

BIF = Balance in Full
SIF = Settlement in Full
PIF = Paid in Full
CA = Collection Agency
OC = Original Creditor
fdcpa = Fair Debt Collection Practices Act
FTC = Federal Trade Commission

Can a CA take your paid-off car even after you started paying them off but found out that they were ripping you off for more than what you owe so you stopped paying the last part?

Sub: #31 posted on Tue, 04/01/2008 - 10:05


debt collectors My advice to anyone is try to work with first I dont ever give personal banking info over the phone this is a NO NO there is NO telling what they will do they could take someone to the cleaners I had one asking Me some personal info I told them That is none of there dam business these foks dont need to know that what ever any of you foks do DONOT send a check from your personal checking account because of the numbers on the bottom of the check use a money oder insted besure to keep records when you make a payment to the collector,s thats My advice to anyone the collector that Im dealing with had the nerve to ask Me if I owned My home My first thought how dare you to ask Me something that personal I said thats none of your business In fact nothing is none of there business they can be pushy dont let them do it stand your ground & know your rights as well to arm your self I call the debt collectors the stalkers thats the new name for them stalkers the only thing I can say is pay your bill,s if anyone is haveing trouble paying first things first try to work with your creditor,s first that would be the best thing to or anyone can get help from a credit conunseling service anyone can find it on line or the phone book or nfccc org thats My advice to anyone who needs help Ive used a credit counseling before they do work but in oder for it work you must willing to work with them that means you have to make monthly payments to your credit counseling agency office in oder for them to work on your behalf :)

Sub: #32 posted on Sat, 05/17/2008 - 18:15


I was sent a letter by First National Collection Bureau and they were asking for almost triple the money i owe to an old credit card about 7 years ago. it is no longer on my report but they say they are putting it back up there and debt doesn't just go away. can they do this.

Sub: #33 posted on Mon, 06/02/2008 - 13:01


it is no longer on my report but they say they are putting it back up there and debt doesn't just go away.

Can put it back on CR: only legal if the debt was charged off less than seven years ago, then it could only remain until the seven year mark.

Debt doesn't just go away: True.

Mail the CA a DV letter.

Sub: #34 posted on Mon, 06/02/2008 - 16:00

Morningstar Morningstar

(Posts: 1633 | Credits: )

I have been contacted by portfolio recovery associates about a debt that isn't mine. Today I sent out a letter asking for all documents mentioned above as well as telling them to only contact me by mail.
I hear these people saying "Just pay your debt" but in this case it isn't even mine. I asked them when the debt was incurred and they told me almost 20 years ago.
So lets hear the former debt collectors defend that!

Sub: #35 posted on Wed, 09/03/2008 - 13:59


I missed a couple of payments and could not resume right away an installment agreement on an insurance subrogation payment plan. It was turned over to new collector whose first call was threatening right from the start but what was worse, the amount was double the original amount of my share of the accident claim - I stated to the agent that I disputed the amount, that he needed to verify the amount and okay, I made the mistake of saying then we could talk about any payment I would make against the real amount I may or may not owe. He sent me a "confirming letter" that day stating that I agreed to start paying $50 immediately - which was an outright lie. The next day I got a letter stating that if I did not pay the full amount of the debt, his agency would have my driver's license revoked. I sent a letter (it was before I read the advice in this website, so I didn't send it certified/registered) stating that I did not agree to anything, that I did request verification of any debt, that all future communications must be made in writing, absolutely no telephone communications would be acceptable. He continues to call with the same threats, a law firm citing this agency's name sent me a 30-day to respond re same claim amount (the wrong amount), and I got another voicemail message this morning from the threatening agent. I am preparing a new letter reconfirming my request that no more telephonic communications are allowed and attaching a copy of the earlier correspondence, but this time certified. The problem here is that legally, even though I was sitting in a parked car with engine running and someone hit me, the insurance carrier made me liable for half their insured's damages and it would take a long protracted lawsuit to prove that I was not liable at all (that's why I had settled for half the damages and had begun making payments against an installment agreement) - the bottom line, since I was uninsured at that time and it is less than 3 years since the date of that "accident," the carrier could go to court and demand the court revoke my driver's license for being an uninsured motorist at the time of the accident, even though I have been insured since then. (The funny part, the accident happened in front of my friend's house where we had a garage sale over the weekend so that I could not only renew my insurance coverage but renew my truck's registration - ain't that a kicker? One more day and I would have had insurance coverage!)

Sub: #36 posted on Tue, 09/16/2008 - 12:37


It's important to note that people have hard times, for those who say just pay your bills, it would be best to stand in someone else's about the single moms out there whose husband just up and left????

What about those who get sick, or laid-off.

Remember, debt collectors, if told do not call your job, let them know they have no choice but to comply. If not, your states Attorney General's office will make them comply, and you have a job full of witnesses if you decide to seek damages in small claims cannot sue for an fdcpa violation, only a Federal agency or an attorney can, but you can sue for harassment or defamation of character. In most states small claims is under a $100, just serve their statutory agent which must be on file with the Secretary of State for every state they collect in!

Sub: #37 posted on Tue, 09/23/2008 - 17:42


Never work with a collection agency, ever. There is no law that says that you have to. Don't even talk to them, unless you're getting their contact info to send your cease & desist. Take 'em out of he loop.

Sub: #38 posted on Thu, 10/09/2008 - 10:15


Bad advice if your debt is still w/in SOL. Your C&D gives them very few options. Law suits come to mind.

Sub: #39 posted on Thu, 10/09/2008 - 10:25

Moderators Cum Industry Expert
(Posts: 4671 | Credits: )

I have a $6000.00 signature loan. I am going through a bankruptcy. We are behind while we are going through the process. We put 2 30" TVs on the note. They are now sending a cout summons to appear in court,and they want to sue us for the full amount and the property. I dont even think we have one of the TVs andy more? Can they do anything.

Sub: #40 posted on Thu, 10/09/2008 - 11:46


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