Collection agencies strike fear in the hearts of those who owe money. They conjure up visions of a constantly ringing telephone, financial demands and threats. Fortunately consumers have many rights when dealing with debt collectors. The law limits the tactics a collection agency can use and allows it to be sued if it steps over the line. A person cannot erase a valid debt, but he has some control over how a collection agency deals with him in its attempts to get him to pay.
Basis
The Federal Trade Commission (FTC) explains that the basis for consumer rights against collection agencies is a law called the Fair Debt Collection Practices Act (FDCPA), which is enforced by the FTC. The law covers debt collectors who work for agencies, attorneys who regularly collect debts and firms that buy old accounts and attempt to collect on them. The FDCPA covers personal debts like mortgages, vehicle loans, medical bills and credit cards, according to the FTC, but not business debts. You have the right to sue collection agencies that violate the FDCPA and potentially collect money damages.
Validation
Collection agencies are required to provide validation of a debt. The validation letter must itemize the amount you allegedly owe and the name of the lender or creditor. It must also tell you what to do if you don't believe the debt is valid. This notice must be sent to you within five days after the agency's first contact with you, the FTC explains.
Contact
The FDCPA forbids collection agencies from contacting consumers outside the hours of 8 a.m. to 9 p.m. They can call you at work unless you give them verbal or written notice that you are not allowed to receive personal calls at your workplace. They can call other people and ask for your contact information if they are not able to get in touch with you, but this can only be done once. They are allowed to ask for your address, phone number and place of employment, but the person they contact is under no obligation to give out this information. You have the right to stop all phone contact by sending a certified letter demanding that all calls cease. Once the agency receives the letter it can call you only to confirm that it is stopping contact or to tell you it is taking legal action.
Protection
The FDCPA protects you from abusive behavior like obscene language, threats against you or your family members, claims that you have committed a crime and will be arrested and jailed or sending you papers that are represented as legal documents when they are not. A collection agency cannot call you repeatedly to annoy you or claim it is a government agency or representative. They cannot threaten you with lawsuits, garnishments or other legal actions unless they truly plan to take such actions. An agency that does any of these things is violating your rights, the FTC states, and you can sue the collection agency.
Warning
Some collection agencies purchase debts that are past the statute of limitations for legal action, known as "zombie debts." They can buy such debts for pennies, making it profitable to collect even a small percentage of the original amount, financial columnist Liz Pulliam of MSN Money explains. They cannot sue you for a debt that is past the statute of limitations or add it to your credit reports, even though they may threaten to take these actions. Consumers have the right to send them a cease and desist letter and to sue them if they do not honor it or if they use any tactics forbidden by the FDCPA.
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