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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

remember some of your assets are exempt from judgement Social Security, workers comp, public assistance. to a certain amount check your local courts

Sub: #51 posted on Mon, 02/09/2009 - 16:20


what does SOL stand for?

Sub: #52 posted on Sun, 02/15/2009 - 14:00


SOL=statute of limitations.

Sub: #53 posted on Sun, 02/15/2009 - 14:35

paulmergel paulmergel
Moderators Cum Industry Expert
(Posts: 15514 | Credits: )

In Sep. 2006 I learned that a company Ive never heard of reported against me ( lease finance $790.00), in addition a collection agency also reported an outrageoous sum as a debt(Metropolitan Adjustment Bureau $1524.00). Upon investigation I discovered that while I was overseas and had someone else managing my finances, it is possible that they engaged in a contract and had automatic payments taken out of my account ($75.00) monthly. After 3 years I never noticed this automatic payment. Unbeknownst to me, I changed my accounts when I arrived back in the states and that is what triggered the payments to stop and a collection to ensure.

After all this was discovered, in good faith I sent a registered letter to the creditor explaining this was all a mistake, however I would pay the balance of the the account if they would call off their collection dogs and cure my credit. They responded by blocking all my calls. But first they sent me a copy of a contract that had my name basically printed on the signature page, obviously not my signature.

When the collection agency called me I explained what happened and they said an original contract is not necessary, because by having the payment taken out of the account, that constitures acknowledgement and responsibility for the debt. I asked why they want so much ($1524.00) they said they can collect that much according to the original contract, but I say it was never signed by me, but they say we collected the payments and you paid. And this has been going on back and forth now for three years. They call, I explain, I send a letter they dont contact. A year later they call, I explain, I send a letter...they dont contact me after that. Etc.

I have requested in writting that they send me verification of the loan, they wont respond. When I hear from them again I ask why they didnt or dont verify, Ive been told they have no paperwork from the OC.

The original creditor wont talk to me from my phone so I contacted them in another way, they say they sold the debt they have no paperwork for the case.

I contacted the court to file small claims, they say they these two companies are out of state. I would have to file out of state and be present for Court for both the OC and the CA (two different states).

What a mess, this is 3 years old now, I want to buy another house someday but Im not sure how to proceed with this. Any advise?

Sub: #54 posted on Tue, 03/03/2009 - 09:07


To the person who had been overseas and someone else used their information to make payment arrangements for debt without your knowledge, the best way to fix this issue is to make a complaint against the person who did this for fraud. If you do not want to prosecute this person for fraud then you are saying you are taking responsibility for their debt. I would seriously consider fraud charges. Once you make the fraud complaint send this information (copy of complaint) to the three credit bureaus. They will remove the inquiries. Also send copies of the fraud complaints to the collection agencies with the name of the responsible party (certified) and request a ceast and desist on all collection practices against you. I am not sure what state you are in but you have a case for fraud against the person that did this to you. If you do not wish to prosecute the person then take the person to small claims court and have the court deem them responsible for the debt then send this information to the credit bureaus and the collection agencies.

Sub: #55 posted on Fri, 03/06/2009 - 09:22


i havent used my credit card for 2-3 years now. its probably in collections now cause i never payed for it. :(
i dont have any mails to all of my stuff because i moved 3 to 4 times. i never cared about my credit 2-3years ago cause thats when i graduated from highschool and only cared about shopping...but now since im trying to buy a car this is becoming a really big issue! :O

im really worried.....i dont know what company im supposed to pay or where to begin... its so confusing :(
do you guys know how much the debt will be if each of the cards had a $500 credit line? will it be like 5,000?
ahhh i dont even know what ca, fdc blah blah blah means :(

i need help ...

Sub: #56 posted on Wed, 03/11/2009 - 10:47


I fiance my suv with Nuvell and I only owe them two more payments pluse a few late charges. My balance is $2,314 and they have turned it over to RAB FOR COLLECTING THIS BALANCE. my payments with nuvell was $658.40 A MONTH WILL i HAVE TO KEEP PAYING THE FULL PAYMENTS OR CAN I PAY LESS NOW THAT ITS ALMOST PAID FOR AS LONG AS I PAY some thing EVERY MONTH ?????

Sub: #57 posted on Sat, 03/14/2009 - 12:01

sallie251 sallie251

(Posts: 1 | Credits: )

I have been getting calls from a CA about my credit card debt. They say I owe about $4500. I haven't paid my card in about 9 months. I make about $1600 a month, and can definitely afford a monthly payment, but the CA won't negotiate with me. They've been trying to get me to apply for a loan to cover the entire amount of the debt. They're now telling me that I need to pay the entire debt by the 25th or else they are going to take action. I don't have $4500 to give them. My credit isn't completely annihilated yet (this is the only blemish on my credit report) but I am only 23 and don't think I have enough credit to qualify for a loan. I'm at a bit of a loss. They told me they don't offer settlements for people with a credit score as high as mine. (wtf?) I honestly don't know what to do.

Sub: #58 posted on Tue, 03/17/2009 - 19:51


I am filing for bankruptcy and need your address to send you the bankruptcy papers. my email address is thankyou email address removed per TOS tules, Shazzers

Sub: #59 posted on Mon, 04/27/2009 - 14:57


just a few comments about giving bank information. If you are dealing with 3rd party CA's and they want you to set up post dated checks, the FDCPA requires that three to ten days before the check is run a letter be sent to you informing you of the date of the check, the amount and the check information (ck # etc.) This is for your protection. Why do the agencies want post dated checks? because unless they have purchased the debt, they are on a time limit from the creditor, if they don't have payment arrangments the creditor can pull the account. CA's document payment arrangments with post dated checks. Think about this for a moment, as a former customer you promised to make monthly payments, for whatever reason those payments were not made, the creditor has usually tried for several months to make arrangments to get monthly payments, again for whatever reason these payments were not made/could not be made. By the time the accounts get to a CA basically the banks are not going to accept "john/jane doe promised to pay and they sent in one payment" as a repayment plan. And yes collectors are trained to get as much money as possible out of consumers, that is only common sense/good business. Almost all creditors give CA's a range w/which to work to settle accounts, as well as guidelines which they are to follow in how they collect. The bigger agencies may vary in how aggressive they are and obviously individual collectors may sometimes violate the law, however it is usually the smaller agencies that engage in the most egregious practices. We are regularly told that violating the law is simply not worth it. Frankly, if you are in collections, deal with the collection agency or the original creditor, however remember there is most likely a contractual agreement between the collection agency and the original creditor that requires the creditor to refer you back to the collection agency. I can also from experience say that what a consumer thinks of as harassment is not generally what the law says is harassment. I can also say that it is not a good idea to use so called debt settlement agencies, they simply take your money with pie in the sky promises and when/if you get sued they drop you as a client and tell you good luck while keeping the money you have paid them. Treat collection calls like a business call, stay professional and most likely the collector will stay professional, it may take a few calls, or a conversation or two with managers, but if you stick with it, an individual can usually settle their own accounts on fairly favorable terms. (usually better than what the original creditor ever offered)

Sub: #60 posted on Sat, 05/02/2009 - 01:00


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