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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

I found this article very helpful--Your right to sue the violators of FCRA

Sub: #41 posted on Thu, 11/27/2008 - 00:33


I was called almost 2 weeks ago, by this collection agent, who told me that he was trying to collect the money I owed these payday loan companies, and that if I didn't comply they were going to try to get me on 4 counts of fraud. I had never once heard from these companies, and I just found out that 2 of them are out of business. I am scared to death that I am going to go to jail. I have little kids and nothing means nore to me than them. Can I be put in jail for this? When I called the local police department they told me that they couldn't say I wouldn't go to jail. I know I owe the money, and have every intention of paying it. I just want to know if on the first call that this collector made, he broke the law by telling me that I will be charged with 4 counts of fraud. Scared to death. Please help!!!!

Sub: #42 posted on Wed, 12/31/2008 - 19:35


Yes he did. You cannot be charged with a crime.

Sub: #43 posted on Thu, 01/01/2009 - 08:10

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

We just found out that the creditor I mentioned was representing these companies and we did a lot of research on them, the collection agency included, and we found that a couple of the companies he mentioned are no longer in business. If this creditor is representing the "out of business companies" then where is the money gong? howcome there is no information at all on this agency? and is he breaking the law by representing said companies?. I live in maine and I have read that these companies have to be licensed to loan us money up here, and that so far no internet companies are, What do I do?

Sub: #44 posted on Thu, 01/01/2009 - 17:49


BIF and PIF is exactly the same think...just different agency jargon

Sub: #45 posted on Thu, 01/01/2009 - 17:54

Moderators Cum Industry Expert
(Posts: 17319 | Credits: )

I received a phone call last night from Portfolio Recovery Assoc about a debt that was from 1998. I didn't acknowledge the loan of course, I told her I would have to do some investigating b/c I am not aware of any loans from 11 yrs ago. What are my rights and what advise can you all give me about this? Thanks!

Sub: #46 posted on Fri, 01/09/2009 - 12:16

jrowe1974 jrowe1974

(Posts: 3 | Credits: )

Ok there is a difference in CA's as you call them 1st and 3rd. 1st is the company you originally had the debt through...and trust me their legal dept. Isn't one you want to be threatening. 3rd however is a different and hard to distingish party usually asian. They do have he fdcpa to deal with. 1st does NOT although most don't want neg publicity so they have internal rules (usually stronger than fdcpa) If you tell them you are recording or don't tell them then YOU are in violation of the law if they don't know or they tell you to stop. And just to be certain they will repeat the request several times during the call. Please people use common sense they have your SSN(all 9 digits) name, phone # address..don't get rude...if they go postal you don't want to be on their last call list. even CA's are human normally :>

Sub: #47 posted on Wed, 01/14/2009 - 23:20


i overpayed some debt collection agency and i just found out how much money exactly that i owe the company that refered me to them. i was wondering what's the best to get them to give me a refund.

Sub: #48 posted on Thu, 01/15/2009 - 10:14


don't really know. call them first if you have their number. As a collector myself..I really honestly don't know...but then again I'm 1st party or who sold your debt. If they are domestic they are going to be easier to get to..foreign companies are not so easy. I'd recommend those of you with debt STAY away RUN from settlement companies..they ruin you and your credit. If you don't like calls change your number or use "do not disturb" feature on your phone i available. Hey I like hangups makes my job easy just two clicks and on I go. Best wishes to you all and remeber most collectors are really good people with a rotten rep.

Sub: #49 posted on Thu, 01/15/2009 - 23:27


I just saw on my credit report that a CA whom i've never talked to or had any dealings with whatsoever reported that I made a payment to them. This is not true! What can I do?

Sub: #50 posted on Sat, 01/31/2009 - 08:08


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