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Debt Collection FAQs

With the cost of living being at an all-time high, it is hard to imagine that someone can survive without debt. Whether it is that business that is currently supporting you and your family or that college degree you are pursuing, debt is constantly around us. Debts are usually given with specific guidelines that articulate how an individual is expected to repay the money.

The most important guideline entails the deadline for repaying your debt. The debt collection process can be very frustrating and annoying especially when there are certain misunderstandings between the concerned parties. These debt collection FAQs will help you understand your rights in the situation.

Why Debt Collectors Call

Most people take loans with the genuine intention of paying back the lender. However, things can happen to derail those plans. There are times when one falls behind in payment. What follows are frequent calls and text messages from debt collectors asking you to make good on the agreement.

However, left unchecked, it can become extremely annoying and irritating when debt collectors employ unorthodox methods in collecting their dues. There are numerous documented cases involving lenders who have crossed the legal line in recovering their money. That is why it is vital to understand appropriate debt collection practices to enable you to stand up against unfair treatment.

You Have Rights

When a debt collector calls, it’s important to know your rights and what you need to do. The Federal Trade Commission (FTC) enforces the Fair Debt Collection Practices Act (FDCPA), which makes it illegal for debt collectors to use abusive, unfair, or deceptive practices when they collect debts.

The debt collection process can be a stressful. While most people usually have the intention of settling their debts before they are due to avoid any misunderstandings, it is not uncommon for someone to fall back on their repayment. This does not justify the use of unorthodox and illegal practices by debt collectors and lenders.

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Get All Details First

Do not accept responsibility for any debt right away. Collectors are required to prove you actually owe the money in writing. Accepting liability right away could find you paying a debt you don’t actually owe. Or worse, you could reactivate a debt that is too old to be collected in court. If you do owe the money, it can be useful to contact a firm like Freedom Debt Relief to help you pay it off. Click here to learn more about how that works.

The FTC

A government body that acts as the United States’ consumer protection agency, the FTC is tasked with enforcing the Fair Debt Collection Practices Act (FDCPA) on a national scale. The FDCPA prohibits lenders and debt collectors from using deceptive, unfair, or abusive debt recovery practices.

1. What is a Debt Collector?

A debt collector is a person responsible for collecting debts or loans owed to others. This may include a lawyer hired by a lender, a collection agency or an organization that purchases delinquent debts and attempts to recover them.

2. What types of Debts fall within the jurisdiction of FDCPA?

The Act provides protection for household, family, and personal debts. This includes money you owe on your mortgage, auto loan, and personal credit card account. Debts incurred to run a business are not covered by the FDCPA.

3. Is it legal for a debt collector to contact me any place or time?

With respect to time, a debt collector is not allowed to contact you after 9pm and before 8am unless you specifically notify them to. Collectors are also prohibited from contacting you at your place of work if they have been told either in writing or orally that you’re not permitted to take calls there.

4. What’s the definition of a debt buyer and an original creditor?

An original creditor or lender is the organization or individual from whom you borrowed the money from. In most cases, they are issuers or credit cards or banks. The FDCPA cannot provide protection to you against original creditors. It is true that you can contact debt collection agencies and ask them to leave you alone but this provision does not apply to original creditors. Debt buyers on the other hand buy the rights to secure a debt or loan from collection agencies or original lenders.

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5. What does the FDCPA say about debt collectors contacting third parties concerning my credit?

You might have noticed that when applying for a loan and particularly from mobile lenders, they require you to provide contract details of the people close to you. This can either be your friends, family or your employer. Failure to provide this information usually leads to automatic rejection of your loan request.FDCPA provides that a debt collector can only contact the individual representing you, in most cases, an attorney, during the debt collection process. If you don’t have a lawyer, a collector is legally allowed to contact other people, such as your friends and family. The extent of their query is limited to such details as your place of work, your home address, and your home phone number.

Collectors are only allowed to contact third parties affiliated to you once.

6. If I believe I do not owe money to a creditor is a debt collector allowed to contact me?

After obtaining a validation notice from a collector, you are required to formally contact your creditor within the first a month’s time stating that you do not owe the stated amount of money. At this point, a collector is prohibited from contacting you. They can only contact you after reviewing your query following a written verification of your debt. The same case applies to scenarios involving an overstatement of your credit value.

7. What practices are illegal during the debt collection process?

Creditors and collectors are within their right to put pressure on you to pay what you owe. After all, if a collector is contacting you it means that you have already defaulted on your payment. While this is true and very understandable, they are not allowed to engage in certain practices.

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The FDCPA prohibits debt collectors from using harassment. Collectors are required to desist from abusing, oppressing, or harassing you in any way.

They may not:

• Constantly use the phone to purposefully annoy you
• Use profane or obscene language
• Employ threats of harm or violence
Debt collectors are also prohibited from using false information to facilitate the debt collection process. False information may be presented in different forms including:
• Indicate that the documents they send to you are not legal forms while in the real sense they are
• Indicate that the documents they send to you are not legal forms while in the real sense they are
• Misrepresent the amount of money you owe
• Falsely acknowledge that they work for or represent a credit reporting organization
• Make a false claim that you have committed a criminal offense
• Make a false claim that they are government representatives or attorneys
A collector is additionally, prohibited from using the following statements:
• Legal action will be employed against you
• You will be sent to prison if you fail to pay your debt
A debt collector may only state that they will sell, garnish, seize or attach your property if it is permitted by law or if it was part of the initial agreement during the loan application process.

8. Where should I report when a debt collection agency has violated the terms and conditions of the FDCPA?

Any challenges or misunderstandings with your debt collector should be reported to the Federal Trade Commission and the office of the Attorney General in your state. The provisions of FDCPA are typically unique for every state. While most of the rights are common across all states some of them might be specific to your state.