Guest Post from Lexington Law
The prospect of having a delinquent credit account turned over to a collection agency can strike fear in the heart of any consumer. While this is certainly not an ideal situation, the collections process is much less “savage” than it used to be.
Thanks to legislation to maintain fair collection practices, consumers are no longer subject to threatening or abusive calls at all hours of the day. The Federal Trade Commission protects consumer rights by enforcing the Fair Debt Collection Practices Act
. This act was put in place many years ago to prevent collection agencies from employing unfair, deceptive, or abusive tactics. Some collectors still attempt to violate the law, though advancing technology like caller ID and call blocking has made even those attempts increasingly unsuccessful.
Of course, the best way to avoid those unpleasant collection letters and phone calls is to avoid becoming delinquent on your credit accounts in the first place. Paying your monthly debts on time is the best way to ensure you don’t lower your credit score
. But if you find yourself in danger of having debts turned over to collections, it is important to be educated about how to deal with it and to understand what a collection agency can and cannot do.
What collection agencies can do
A collection agency’s job is to attempt to collect a debt. Therefore, they can contact you and request that the debt be satisfied. That is perfectly legal and they are within their right to do so. Debt collectors may attempt to contact you by phone (within the approved times), letters, email messages, and/or texts sent to your phone as long as they abide by collection guidelines. For example, they cannot call you before 8 a.m. or after 9 p.m. without your explicit permission. Debt collectors must also identify themselves as such whenever they contact you.
- Attempt to garnish bank accounts or wages
Collectors are allowed to take you to court to collect money you owe on a debt. In the event that the case is not ruled in your favor, the court enters a judgment for the amount of your debt, which allows the collector or creditor to obtain a garnishment order with your bank or employer to collect the money owed directly from them.
If you ignore a court summons received in the mail, you are surrendering your ability to defend yourself against creditors attempting to garnish your wages.
What collection agencies cannot do
Debt collectors are prohibited from misrepresenting who they are. They are not allowed to pretend to be someone else — such as the IRS or other government agent, or a lawyer, for example.
- Lie to you or threaten you
Collection agencies are not permitted to lie to you, threaten you, or attempt to intimidate you with constant phone calls or other harassing tactics in their attempts to collect a debt.
- Attempt to collect from certain types of accounts
Although creditors can attempt to garnish bank accounts and wages, there are certain types of income that they cannot touch unless back taxes are owed or a person is delinquent on child support or alimony.
Federal benefits typically off limits to collectors include the following:
- Veterans’ Benefits
- Social Security Payments
- Supplemental Security Income Payments
- Federal Emergency Management Agency (FEMA)/Federal Disaster Assistance
- Benefits for Military Survivors
- Military Annuities
- Federal Retirement or Disability Payments
What power do you have as the consumer when a collector breaks the rules?
As a consumer, you have recourse in the event that a collection agency does something illegal as outlined above. You are permitted to sue a collector in state or federal court, but you must file your suit within one year of the violation. In some cases, collectors can be ordered to pay consumer damages for lost wages, and even bills for medical care that resulted from stress inflicted on you by their collection practices. If you believe you have a case, you should contact either the Attorney General’s office for your state, the Federal Trade Commission, or the Consumer Financial Protection Bureau.
Of course, the most important action you can take to avoid the stress of dealing with a collection agency is to seek credit repair
assistance to remedy the situation before delinquent payments and balances become an issue. Choosing a credit repair company
with legal expertise will afford you the best option to fix credit and assist you in filing credit disputes on any debts you believe to be unfair or inaccurate.