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With changing federal regulations and changing collection agent tactics, it is important to know what collection agencies can and cannot do legally and to stay vigilant against debt collection scams.
By law, debt collectors can contact consumers by phone, mail, email, or text message, as long as they identify themselves as debt collectors. They may contact consumers at work unless they are specifically told that the consumer is not allowed to receive calls there. They may also contact others for information about consumers whose debt they are pursuing, but unless they contact your spouse or attorney, the agency cannot contact them more than once. times or discuss your debt with them. Collection agencies are prohibited from calling between 9 p.m. and 8 a.m. and may not engage in harassment, misrepresentation, or unfair practices.
Under new rules introduced by the Consumer Financial Protection Bureau (CFPB) last year, collection agencies are limited to seven phone calls per week to consumers, including attempted calls and conversations. They can establish an unlimited number of contacts by SMS, e-mail and private message on social networks; however, they must clearly identify themselves as debt collectors and provide a means of opting out.
Notably, debt collection agencies cannot pretend to be someone else, such as a government agency or credit reporting company, and cannot use a fake company name.
The Better Business Bureau (BBB) received more than 21,000 complaints about collection agencies in 2021, making it the sixth most criticized business category last year.
An O’Fallon, Missouri man told BBB in April 2021 that he was working with a debt collection company to pay off an unpaid debt, but the company never sent him a full payment statement or had him removed. the debt from his credit report. He repeatedly asked for documentation and the company promised to send it, but it never arrived. The company did not respond to the man’s complaint to BBB.
Debt collection scams are also common. BBB Scam Tracker received nearly 1,200 reports of this fraud in 2021. The scammer calls you and tells you that they work for a loan company, law firm, or government agency and claim to collect an overdue payment. When you reply that you don’t owe any money, the “debt collector” begins threatening to sue you, garnish your wages, arrest you, or force you to appear in court thousands of miles away. your house.
BBB recommends that consumers follow these tips to avoid debt collection scams:
- Ask the debt collector to provide an official “validation notice” of the debt. Collection agents are required by law to provide this information in writing. The notice must include the amount of the debt, the name of the creditor and a statement of your rights. If the self-proclaimed collector does not provide the information, hang up.
- Ask for more information. If you owe money and aren’t sure if the caller is real, ask for their name, company, address, and phone number. Do not provide any bank account, credit card or other personally identifiable information over the phone. If the collector is legitimate, they should have details of the accounts in question.
- Hang up. If you don’t have any outstanding loans, hang up. Do not press any number and do not speak to an “agent”.
- Check your credit report. Check with one of the three national credit reporting companies (Equifax, Trans Union, Experian). This will help you determine if you have any outstanding debts or if there has been suspicious activity.
- Place a fraud alert on your credit report. If the scammer has personal information, place a fraud alert with all three national credit reporting companies.
- Know your rights in court. If you believe a debt collector has broken the law in their dealings with you, you have one year from the violation to file a lawsuit. Remember that even if the debt collector breaks the law, a legitimate debt does not disappear.
- Report scams. If you think you are the target of a debt collection scam or if you have already been the victim, report it to BBB Scam Tracker.
- Report unfair transactions with debt collectors. You can file complaints against collection agencies at bbb.org; you can also leave reviews about them. Your state attorney general’s office, Federal Trade Commission (FTC) and the CFPB also have recourse against collection agencies.
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