If you’ve ever been in debt, you know the sinking feeling that can come when the phone rings.
What if it’s a debt collector? What will they say? How will I pay?
Consumer debt grew to nearly $14 trillion in 2019. A lot of people are in debt, and many of them will receive calls, emails, or letters from debt collectors. If it happens to you, it’s important to know your rights — there are things debt collection agencies can and cannot legally do, and some of their common behavior qualifies as harassment that you can fight back against.
This guide is meant to prepare consumers for all of the tactics — legal and not — that debt collectors might use against them. If you’re in debt and getting calls from collectors, read on to learn your rights — and your options for making the calls stop.
A debt collector (also called a debt collection agency, debt collection company, or debt buyer) is most often a business that buys debts from large companies and then tries to collect on them.
Here’s how it generally works:
Debt collectors can also sometimes be lawyers. And they aren’t necessarily always third-party businesses — they could be from the original company the consumer owed their debt to — but that’s the most common type of debt collector who contacts consumers repeatedly.
Debt collectors are allowed to contact consumers to attempt to collect their debts.
They’re also allowed to sue consumers over unpaid debt.
Debt collectors can report unpaid debt to the credit bureaus, which can lower a consumer’s credit score.
And, within certain limitations set by federal law, debt collectors are allowed to make many attempts to contact consumers, using different phone numbers, and in some cases, even trying to call them at work.
In 1977, Congress passed the Fair Debt Collection Practices Act (FDCPA), which created some rules about how debt collectors can contact consumers, and what tactics they can use to try to collect on a debt. The FDCPA covers credit card debt, auto loans, medical bills, student loans, mortgage, and other household debts. It does not cover business debt.
According to the law, debt collectors can attempt to collect debts by contacting consumers via phone calls, letters, emails, and text messages.
The law covers two other broad things that debt collectors are prohibited from doing: Misrepresenting themselves, and harassing consumers.
The misrepresentation section of the law prohibits debt collectors from using “false, deceptive, or misleading practices.” This means that debt collectors can’t:
The FDCPA also prohibits debt collectors from harassing consumers, saying they can’t “harass, oppress, or abuse” anyone they contact.
But it’s not technically illegal for a debt collector to contact a consumer repeatedly about a debt. So how do you know when that behavior crosses a line and becomes illegal?
According to the law, these are some examples of harassment by debt collectors:
It’s actually not that hard to get calls from debt collectors to stop — provided the debt collector follows the law. But stopping calls won’t necessarily get you out of the legal consequences of not paying your debt. Here’s everything you need to know about stopping calls from debt collectors.
Debt collection calls are one of those things that are easier to avoid in the first place than to deal with once they happen. This might seem less helpful to you if you’re already receiving calls from debt collectors, but these tactics can help you avoid having even more unpaid debt that could be sold to more debt collectors.
Budget Carefully, Especially with Credit Cards
Many cases of consumer debt happen simply because people spend outside of their means. Avoid this by creating (and then sticking to) a budget. This is especially important when it comes to credit cards, which have high interest rates that can quickly trap consumers in a cycle of debt.
Negotiate Your Debts Before They Go to Collections
If you receive a bill from a business that you cannot pay, reach out to the business. Selling unpaid debt to a collections agency isn’t particularly lucrative for them, so odds are good that they’ll be willing to work with you to find a way that you can pay. This might mean accepting a discounted payment, deferring payments for a short time, or setting up a realistic payment plan. Remember, you have nothing to lose by asking a business for help if you can’t pay a bill.
Watch Out for Unfair or Unauthorized Charges
Sometimes, businesses make mistakes (or even act unethically). That’s why it’s important to keep a close eye out for unauthorized charges, and address them if they happen. The same goes for unfair charges — if a business tries to bill you for something unfairly, don’t just ignore it. You can fight back against those types of charges so they don’t end up in collections.
Verify That the Debt Is Real
If a debt collector is contacting you and you don’t believe you actually owe the debt, you can request that they verify it. Do this by sending a letter saying you don’t owe any or part of the debt. Then, the debt collector has to send you written verification of the debt (like a bill from the original business) before it can resume its attempts to collect money from you.
If your only goal is to stop debt collectors from continuing to call you, it might be easier than you think: You just have to ask.
Under the law, if you request that a debt collector stops contacting you, they have to stop.
The best way to let a debt collector know that you want them to stop contacting you is by sending them a letter. Keep a copy for yourself, and send it via certified mail, so you know when the letter is received. After receiving your letter, the debt collector can only contact you one more time, to let you know that they’re going to stop attempting to contact you.
Do note that this does not prevent the debt collector from continuing to try to collect the debt. They can still take legal action against you, even if you’ve asked them not to contact you.
Unfortunately, asking a debt collector to stop contacting you only works if that particular debt collector follows the law. They don’t always, so if you’re being harassed by a debt collector, here are some things you can do to make it stop.
Contact Your State Attorney General
Different states have their own laws about debt collector harassment and behavior, so contacting your attorney general might help you find resources you didn’t already know were there, and better understand your exact rights depending on where you live.
Report the Debt Collector to the Federal Government
Two federal agencies oversee debt collectors: The Federal Trade Commission, and the Consumer Financial Protection Bureau. They both allow consumers to submit complaints online, so if you’re having a problem with a debt collector, gather all the information you have and submit it to the FTC here, and the CFPB here.
Sue the Debt Collector
If you know for sure that a debt collector broke the law, you can sue them for damages. Even if you can’t prove damages, the FTC allows for up to $1,000 in awards, plus reimbursement of legal fees. You might want to consult an attorney for guidance if you plan to sue a debt collector.
Do note that even if a debt collector violated the law, you are still required to pay any legitimate debt you owe.
The best way to stop debt collector harassment is to ensure that laws prohibit it and government agencies enforce those laws. You can contact your lawmakers to ask them to advocate for strong consumer protection laws that will protect your rights.