Dealing With Credit Collection Agencies
Collection agencies have a bad reputation with most consumers due to debt collectors' tendencies to call frequently and threaten debtors if they don't settle their accounts. Fortunately, the Fair Debt Collection Practices Act (FDCPA) contains consumer protection laws that help consumers deal with harassment, in any form, from debt collectors.
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Features
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When a credit card company charges off an unpaid debt after 180 days, your obligation to pay the debt doesn't vanish: The account merely moves from the original creditor's accounting books to those of a collection agency. The collection calls and letters demanding payment then begin. Regardless of whether or not you're financially able to pay off the debt, you don't have to tolerate contact with the collection agency.
Facts
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The FDCPA states that if you request, in writing, that a collection agency stop contacting you, the company must abide by the law and immediately cease all contact. The only further contact the collection agency can have with you is to notify you that it received your request and intends to comply or to notify you of any specific action, such as a civil lawsuit, that it intends to take to recover your debt.
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Considerations
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While forcing a collection agency to stop contacting you provides you with temporary relief, the collection agency may sue you or simply pass your debt off to another collection agency --- at which point the calls and letters resume. If you can afford to pay off the debt, doing so gives you permanent relief from the company's debt recovery efforts, provided you request a zero-balance statement from the company after making your payment. A zero-balance statement protects you in the event that the collection agency inadvertently sells your account after you've already paid what you owe.
Warning
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When dealing with credit collection agencies, always ask for every agreement in writing. Keeping a thorough record of all transactions you have with the company is imperative to protecting yourself. If, for example, a debt collector offers you a generous settlement over the phone that you want to take advantage of, don't make a payment toward the settlement until the company sends you a written copy of the offer. Otherwise, you may pay the settlement only to discover that the company denies any knowledge of the offer and is still demanding the remaining balance you owe.
Effects
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The FDCPA prohibits debt collectors from verbally abusing you, threatening you and your family with physical harm, threatening to take legal action against you when the company doesn't intend to do so, or calling you at a time or place the company knows is inconvenient for you. If a collection agency violates your rights, the FDCPA allows you to sue the company within one year of the date the violation occurred.
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