Stop Collection Agents

Collection Agency Nightmare

If you are having problems with a collection agency harassing you, you have come to the right place. I myself have had horrible problems in my past from collection agents when things were not going so well financially. I had numerous collection agents calling me over and over again. They were nasty and rude to me on the phone. They made threats and literally scared the heck out of me. It gave me such anxiety, I was having trouble sleeping.

The final straw came one evening when my next door neighbor came knocking on my door and said that some collection agent called and wanted him to come over and let me know that they needed immediate payment on my debt. Talk about EMBARRASSMENT! I was at my wits end at this point.

Then one day I saw an expert on collection on a television talk show. He gave out all sorts of information, and I was blown away. All this time, I had the ability to put those scumbags in their place and force them to stop contacting me in any way.

I took all of the advice and lo and behold, it worked. I had to repeat the steps a couple more times, because the debts got "re-sold" to different collection agencies. But I ended up never hearing from any more collection agents again, nor the original creditor.

I was eventually able to raise my FICO score and obtain very good credit. I also found extremely effective tips about credit repair from an expert I saw on television. I have created another website that addresses the FICO score issue:

Raise Your FICO Score

If you follow the steps on this blog, you too can eat dinner in peace without the phone ringing!

Fair Debt Collection

If you use credit cards, owe money on a personal loan, or are paying on a home mortgage, you are a "debtor." If you fall behind in repaying your creditors, or an error is made on your accounts, you may be contacted by a "debt collector."

You should know that in either situation, the Fair Debt Collection Practices Act requires that debt collectors treat you fairly and prohibits certain methods of debt collection. Of course, the law does not erase any legitimate debt you owe.

Debts that are covered

Personal, family, and household debts are covered under the Act. This includes money owed for the purchase of an automobile, for medical care, or for charge accounts.

Legal definition of a debt collector

A debt collector is any person who regularly collects debts owed to others. This includes attorneys who collect debts on a regular basis.

How a debt collector may contact you

A collector may contact you in person, by mail, telephone, telegram, or fax. However, a debt collector may not contact you at inconvenient times or places, such as before 8 a.m. or after 9 p.m., unless you agree. A debt collector also may not contact you at work if the collector knows that your employer disapproves of such contacts.

Who a debt collector may contact about your debt

If you have an attorney, the debt collector must contact the attorney, rather than you. If you do not have an attorney, a collector may contact other people, but only to find out where you live, what your phone number is, and where you work. Collectors usually are prohibited from contacting such third parties more than once. In most cases, the collector may not tell anyone other than you and your attorney that you owe money.

Information the debt collector must tell you about the debt

Within five days after you are first contacted, the collector must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money.

May a debt collector continue to contact you if you believe you do not owe money?

A collector may not contact you if, within 30 days after you receive the written notice, you send the collection agency a letter stating you do not owe money. However, a collector can renew collection activities if you are sent proof of the debt, such as a copy of a bill for the amount owed.

Collection Agency Cease and Desist Letter

You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor.

The following letter can be sent to a collection agent to prohibit them from ever contacting you in any way. Send the letter certified return receipt and save a copy.

______________________________

Date

Your Name
Address
City, State Zip

Debt Collector’s Name
Address
City, State Zip

Re: Account Number

Dear Debt Collector:

Pursuant to my rights under federal debt collection laws, I am requesting that you cease and desist communication with me, as well as my family and friends, in relation to this and all other alleged debts you claim I owe.

You are hereby notified that if you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the (your state here) Attorney General’s office. Civil and criminal claims will be pursued.
Sincerely,

Your Name

Prohibited Debt Collection Practices

Debt collectors may not harass, oppress, or abuse you or any third parties they contact. Debt collectors may not use any false or misleading statements when collecting a debt. Debt collectors may not engage in unfair practices when they try to collect a debt. For example, debt collectors may not:

* Use threats of violence or harm.
* Publish a list of consumers who refuse to pay their debts.
* State that you will be arrested if you do not pay your debt.
* Claim they will seize, garnish, attach, or sell your property or wages, unless the collection agency or creditor intends to do so, and it is legal to do so.
* Collect any amount greater than your debt, unless your state law permits such a charge.
* Deposit a post-dated check prematurely.
* Use deception to make you accept collect calls or pay for telegrams.
* Take or threaten to take your property unless this can be done legally.
* Contact you by postcard.
* Falsely imply that they are attorneys or government representatives.
* Falsely imply that you have committed a crime.
* Falsely represent that they operate or work for a credit bureau.
* Misrepresent the amount of your debt.
* Indicate that papers being sent to you are legal forms when they are not.
* Indicate that papers being sent to you are not legal forms when they are.
* give false credit information about you to anyone, including a credit bureau;
* Send you anything that looks like an official document from a court or government agency when it is not,
* Use a false name.

Statute of Limitations Dispute Letter

The following letter can be sent to a collection agent if your debt is beyond your states statute of limitations on debt collection.

You can check your state statute here:

State Statute of Limitations on Debt Collection

________________________________

Your Name
Your Address

Lender's Name
Lender's Address

RE: (Account # of Debt Owed, Customer Name & Type of Debt)

Dear (Mr. Debt Collector),

I am responding to your letter dated (dd-mm-yyyy) in reference to the collection of the above debt (Account # of Debt Owed). This letter is also in reference to your phone call on (dd-mm-yyyy).

The debt that you have charged against me is invalid and I am therefore disputing it. I am 100% aware of my rights under the Fair Debt Collection Practices Act (FDCPA) and have also checked with my local state department regarding the matter. I have also checked with my State Attorney General that the Statute of Limitations Period you had to enforce the collection of this debt against me in the courts is OVER. Therefore in case you take this debt collection case to the courts, I will dispute it and let the Judge know that the Statute of Limitations period is over.

Consider this letter as your formal notice that I would like this matter to be closed or actually, demand this matter to be closed. I also demand that you or any debt collection parties working with you STOP calling me regarding this debt collection.

You should know that I will be taping any more phone calls received from you and report you to the Federal Trade Commission and to my State Attorney General. If I receive a harassing debt collection phone call from you, remember you can be charged up to $1000 per every harassing phone call. You should also know that I am willing to take whatever necessary legal action to protect my rights as a consumer.

(Your Signature)
(Your Printed Name)

What is a collection agency?

A collection agency is a business that pursues payments on debts owed by individuals or businesses. Most collection agencies operate as agents of creditors and collect debts for a fee or percentage of the total amount owed. Some agencies, sometimes referred to as "debt buyers", purchase debts from creditors for a fraction of the value of the debt and pursue the debtor for the full balance.

Creditors typically send debts to a collection agency in order to remove them from their accounts receivable records; the difference between the amount collected and the full value of the debt is then written off as a loss.

In many countries, collection agencies are governed by laws that prohibit certain abusive practices. Failure to adhere to such laws may result in lawsuits or government regulatory actions.

First Party Collection Agencies

Some agencies are departments or subsidiaries of the company that owns the original debt. First party agencies typically get involved earlier in the debt collection process and have a greater incentive to try to maintain a constructive customer relationship.

Because they are a part of the original creditor, first party agencies are not subject to the Fair Debt Collection Practices Act which governs third party collection agencies.

These agencies are called "first party" because they are part of the first party to the contract (i.e. the creditor). The second party is the consumer (or debtor).

Typically, most creditors will retain accounts with first party agencies for a period of around 6 months before the debt is written off and passed to a Third Party Agency.

Third Party Collection Agencies

The term collection agency is usually applied to third-party agencies, called such because they were not a party to the original contract. The creditor assigns accounts directly to such an agency on a contingency-fee basis, which usually initially costs nothing to the creditor or merchant, except for the cost of communications. This however is dependent on the individual service level agreement (SLA) that exists between the creditor and the collection agency. The agency will then take a percentage of the debt that is successfully collected; sometimes known in the industry as the "Pot Fee" or potential fee upon successful collection. This does not necessarily have to be upon collection of the full balance and very often this fee is paid by the creditor if they cancel collection efforts before the debt is collected. The collection agency makes money only if money is collected from the debtor (often known as a "No Collection - No Fee" basis). Depending on the type of debt the fee ranges from 10% to 50% (though more typically the fee is 15% to 35%).

Some agencies offer a flat fee, typically $10.00, "pre-collection" or "soft collection" service. The service sends a series of increasingly urgent letters, usually ten days apart, instructing debtors to pay the amount owed directly to the creditor or risk a collection action and negative credit report. Depending on the terms of the SLA, these accounts may revert to "hard collection" status at the agency's regular rates if the debtor does not respond.

In the United States, consumer third-party agencies are subject to the Fair Debt Collection Practices Act of 1977 (FDCPA). This federal law is administered by the Federal Trade Commission or FTC. This act limits the hours during which the agency may call the debtor and prohibits communication of the debt to a third party. It also prohibits false, deceptive or misleading representations, and prohibits the agency from making threats of actions the agency cannot lawfully or does not intend to take.

Bankruptcy and Collection Agents Facts

A bankruptcy discharge releases the debtor from personal liability for certain specified types of debts. In other words, the debtor is no longer legally required to pay any debts that are discharged. The discharge is a permanent order prohibiting the creditors of the debtor from taking any form of collection action on discharged debts, including legal action and communications with the debtor, such as telephone calls, letters, and personal contacts.

Once a collection agency is informed of the bankruptcy filing and provided with the basic information about the case, such as the chapter filed, the date filed, and the case number, it must take no further action, unless it obtains bankruptcy court authority to proceed with its collection efforts, and the court's granting of such authority would be very rare.

The IRS and Collection Agencies

the IRS is no longer using private collection agencies. IRS contracts with private debt collection agencies to go after delinquent taxpayers expired Friday, March 6, 2009. In deciding not to renew them, IRS Commissioner Doug Shulman said he concluded after a monthlong review that tax collection could best be done by government workers.

The Internal Revenue Service's decision to quit using debt collectors to dun delinquent taxpayers was celebrated by public employee unions as a pendulum shift after watching the Bush administration often opt for private contractors over federal workers to deliver government services.

The IRS program was a small one, bringing in a little more than $80 million since its inception in 2006. But it represented an ideological toehold for conservatives who believe that private companies are more efficient than government agencies.

It was an ideology embraced by former President George W. Bush, who famously — and unsuccessfully — toyed with the idea of partially privatizing Social Security.

The agency had been turning over to private debt collectors some delinquency cases, often in the $5,000 to $10,000 range, that the IRS lacked the manpower to pursue. The program cost about $7.6 million a year to administer, and private contractors were allowed to keep about a quarter of the taxes they collected.

The program brought in more money than it cost to operate, but it had become a political headache for the IRS. The union representing IRS workers and the National Taxpayer Advocate, an independent ombudsman within the agency, opposed the program, as did some Democrats in Congress. Other powerful lawmakers from both political parties supported it.

Do's and Do not's on Paying a Collection Agency

There is a right way and a wrong way to pay them.

• If you are trying to accomplish a goal such as buying a home and a condition of a loan requires a collection account to be paid off and you do not wish to postpone the transaction be careful in how you handle it.

• You may be doing the right thing and it cause you more problems than it is worth.

• Don't give a collection agency your credit or debit card number or checking information over the phone. There are to many stories on the Internet where people have paid collection agencies this way and dishonest collection agency personnel misuse this information.

• The best way to pay them is with a money order or through a third party such as a closing agent or attorney.

• If they insist you use quick collect or money gram chances are you are being scammed plus the fees for these services are draconian. Buy a money order and overnight it to a specific contact at a collection agency the cost of this should be less.

• Do make them put it in writing that you will never hear about this debt again especially if it is a reduced payoff!!

• Many times collection agencies will offer you a reduce payoff on a debt only to resell the portion you did not pay. There are many collection agencies that are in the business of buying old debts and "deficiencies" like this get packaged into portfolios of junk debt.

• A debt that you clear today may pop up on you years down the road.

• Do ask them to delete the trade line. You may be able to accomplish this towards the end of the month when they are trying to close out their numbers. You have always heard that the best day to get a good deal on a car is the last day of the month. It is the same with a collection agency.

• Because you are not going to give them financial information over the phone start a few days early. If they agree to this make them put it in writing!!

• Never take anything they say over the phone as reliable it bears repeating. Do not give financial information over the phone and make them put everything in writing!!

Stop Collection Agents

Collection Agency Nightmare

Fair Debt Collection

Collection Agency Cease and Desist Letter

Prohibited Debt Collection Practices

Statute of Limitations Dispute Letter

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