Understanding Debt Collection Federal Laws

Dealing with debt collection agencies isn’t an experience many consumers wish to encounter. Whenever you fall behind on your debt payments and your accounts rest in default, it’s important to not ignore the situation but to work diligently to eliminate this overdue balance. While debt collectors are legally entitled to contact you regarding the debt, they must follow federal regulations and laws set forth by the Fair Debt Collection Practices Act.

Initial Collection Contacts

Whenever a collection agency first contacts you, they’re required by law to follow a set of guidelines. To start, the initial contact must contain clear instructions for disputing this debt. In the realm of debt collection, these rights are referred to as mini-Miranda rights. Therefore, whenever you’re first contacted by a collection agency, make sure the following information is released:

I. The total sum of the debt. Never deal with a collection agency that uses rounded figures or estimates. They must provide you an exact debt amount within their initial contact. If you have credit card debt, visit this site for more specific information.

II. Their full business name. If a collection agency refuses to reveal their business name and contact information, immediately contact your creditor and inform them of this misstep. You should never deal with a collector who’s unable to clearly state their business and purpose.

III. Clear statements within the initial contact letter or phone call stating the time frame you have for your initial dispute. Generally, this time frame is 30-days from initial contact. If you fail to dispute the debt, the collection agency with assume this debt is accurate and can proceed with collection duties.

Right to Dispute Debt

When you’re first contacted by a collection agency, you must be informed of your total debt balance. It’s your right as a consumer to receive written verification of the debt. Make sure to inform the collection agency you wish to receive this information in the mail. By law, they must comply and send such information within 30-days of their initial contact. Until this debt is verified, all collection attempts must halt. If the creditor is unable to provide accurate information regarding the total debt balance, as well as with whom the debt belongs to, all collection attempts must stop. If the debt is not accurate, it’s your responsibility to respond in writing and provide all supporting documentations to prove the outstanding balance is incorrect.

Eliminating Contact Calls

One of the most annoying aspects of collection agencies is their multiple attempts to contact you. In previous years, these telephone contact attempts were unregulated, which resulted in literal harassment according to your650score.com. Since then, consumer advocates and federal agencies have set clear boundaries. If you wish collection agencies to stop contacting you at home or work via the telephone, then you must send them a cease communication letter. Within this letter you may inform the collection agency to only contact you via writing. This is essential to not only end harassing phone calls, but to create a traceable paper trail for your records.