If a bill from any company that has given you credit goes unpaid, the company may refer your case to a debt collection agency. A debt collection agency will do its best to recover the funds that you owe and will receive a percentage of the collected amount. While a collection agency's job is to get you to pay your bill, the Federal Trade Commission has a set of rules in place detailing what the agency may and may not say or do. The compilation of these laws is called the Fair Debt Collection Practices Act.
Contact
A debt collector will attempt to contact you by mail, telephone or fax. They are not allowed, however, to call before 8:00 in the morning or after 9:00 at night, according to the Federal Trade Commission, unless you grant them permission to do so. If you are not allowed to receive calls at work and you tell them this, they are no longer allowed to contact you there either. A collection agency is allowed to try to contact other people to obtain your correct address or telephone number, but they may not disclose any information about the money that you owe. If you have an attorney representing you in the matter of your debt, the agency must refer all calls, letters and questions to the lawyer. If you notify the collector in writing that you no longer wish to receive calls and letters from them, they must honor that and stop all contact with you, though they can still sue you for the money owed.
Notification
When the debt collector first contacts you, they must advise you that they are attempting to collect a debt. They also must send you a letter within five days informing you of the name of the original creditor and how much you owe. There will be instructions on the letter for you to follow if you do not think that you owe the bill in part or in its entirety.
Prohibited Practices
Debt collectors may not threaten or harass you. They can not say that they will have you arrested if you do not talk to them or if you do not pay the bill, or that they will garnish or attach your wages if they are legally unable to do so. They can not lie to you about your bill or to credit reporting agencies or anyone else about you or the amount that you owe. They are not allowed to send you a postcard about your debt or try to make you pay any interest fees or charges that are not allowable by law.
Lawsuits
A debt collection agency can file a lawsuit against you. If you are sued and either don't show up to court or are found to be responsible for the bill, the judge may have your paycheck attached for a certain amount each week.
If you believe that a collector broke the law, you may also sue the agency. If you win, you will be compensated for your attorney fees and may be reimbursed for any lost wages pertaining to the lawsuit. Your debt will not be canceled, however, and you will still be responsible to pay the bill in question.
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