Debt has become a part of everyday life for most people. Everyone we know is either in debt or has been in debt in the past; or runs the risk of debt. With all that debt swimming around, it is easy to sometimes fall back on your payments. In such a case, your creditor may contact you to recollect the money owed. You may also be contacted by one of the many debt collection services that essentially see to it that you repay your loan.
There are a few things that you should know about debt collection services. This article will instruct you on what you can expect from such debt collecting services and what your rights are in dealing with attempts to make you repay your debt. Let us begin by understanding what these services mean:
1. A debt collection service can be run by the creditor to whom you owe the money. Such a service is called a firsthand debt collecting service. This is usually the first kind of recollection effort that you will encounter.
2. There are third party debt collection services too. Creditors who have tried and failed to extract the repayment from you may outsource the debt collection to another company that specializes in such collection. These third party services represent the creditor and should be able to furnish written documents to establish this representation.
3. Then there is the trend of creditors selling their debt to willing parties. The logic behind this is simple: at this stage the creditor who gave out the loan has tried and failed to collect the debt; it has been written off as delinquent. The creditor can “sell” this debt for a fraction of the sum owed to a company. That company buys this debt in the hope of making you pay up. So, basically, you owe the money to a different company now.
What are my rights when dealing with debt collection services?
Debt collecting services may use all legitimate means to make you repay your debt. But it is best to be aware of your rights when dealing with such services. Under the Fair Debt Collection Practices Act, debt collection services may not contact you at odd hours or harass you in any way. You need not put up with pestering phone calls and have the right to report collection phone calls made before 8 a.m. and after 9 p.m. local time.
That said, sometimes there may be a case of mistaken identity. You may not owe any debt to anyone or may be taken to be someone else. In the event that a debt collection service contacts you and you think this has been a mistake, you should:
- Meet with the service representatives at least once. You may inform them of the mistake and provide proof of identity.
- Upon written request, a copy of which should be with you, you can ask them to terminate further efforts to contact you in regard to this debt.
- You can toe a similar line even if you owe the debt and are the right person. If you think that you cannot repay the debt and wish for the debt collection service to stop communication with you, you are within your rights to ask them to stop communication.
Debt collection services often operate on the basis of a commission. Creditors pay a cut to such services to make you repay your debt. This is a lucrative model of business – one that often pushes debt collection services to resort to illegal means to make you pay up. This could include threats, violence and verbal abuse. Do not put up with these.
The Federal Trade Commission is the United States’ agency for consumer protection and encourages you to report any illegal behavior that you encounter. You can find answers to some commonly asked questions on debt collection on this link on the Federal Trade Commission website: https://consumer.ftc.gov/articles/debt-collection-faqs