Third-party debt collectors or collection agents pursue payments on debts owed by individuals or businesses. Collections agents may work on behalf of a creditor, or may purchase the account receivable from the creditor for a fraction of the account's face value.
Fair Debt Collections Practices Act
All third-party collection agents are regulated by a federal law called the Fair Debt Collections Practices Act. When an original creditor has a department or group that functions as a collection agent the original creditor becomes bound by the provisions of the FDCPA. Also, in Texas, New York, and California, all original creditors at all times are bound by the FDCPA.
The FDCPA states, among other things, that collection agents may not make false or misleading statements while attempting to collect debts. To learn more about your rights under the FDCPA, I encourage you to visit the Federal Trade Commission FDCPA FAQ.
After learning more about your rights as a consumer, if you believe the collection agent who contacted you is violating the FDCPA, you may wish to file a complaint with the Federal Trade Commission and your state Attorney General's (AG) consumer protection office. To find contact information for the AG's office in your state, see the National Association of Attorneys General list of AGs.
Once you file a complaint with the AG's office, the AG's staff will contact the collection agency to notify the company of your complaint, and what action you want the agency to take to resolve your complaint. Filing complaints against the collector will likely stop the telephone calls you have been receiving. Depending on the seriousness of the allegations, the collector may also be willing to forgive all or a portion of the debt claimed in order to settle your complaints.
Filing a Lawsuit Against a Collection Agent
In addition to filing complaints against the collection agent for violating the FDCPA, you may have a "cause of action" to file a lawsuit against the company. A cause of action is a reason under the law to file a lawsuit. I frequently see consumers file claims successfully for statutory damages allowed by federal law.
If you are interested in pursuing legal action against the collection agency, I would encourage you to consult with a consumer rights attorney licensed in your state who can review your case. If the attorney thinks a viable case exists, he may be able to help you in filing a lawsuit against the collector for damages caused by its illegal collection activity. The National Association of Consumer Advocates will help you find a consumer rights attorney in your area who can assist you in pursuing legal action against this collection agency, if you choose to do so.
Cease Communication Demand Letter
If your primary goal is to stop the phone calls you are receiving from collectors, you may be better served by simply sending a written cease communication demand letter to the agency. Under the provisions of the FDCPA, a debt collector is required to stop calling you (with very limited exceptions) if you notify the agency in writing to cease communications.
For an example of a cease communication (a.k.a., cease and desist) letter, see the Bills.com debt self-help center. If you decide to send a cease communication request, I encourage you to use certified mail, return receipt requested; this will provide you proof that your letter was received in case the collector continues to call and you need to take further action against the agency.
In many cases, sending a C&D letter will end the collection calls, so you may find that no further action is needed on your part. However, if you do continue to receive collection calls, you may need to take further action such as filing complaints and/or legal action, as outlined above.
Resolve the Debt
Federal law provides you with a significant protection against abusive collection tactics by debt collectors. That said, stopping collection calls does not make the underlying debt go away. I encourage you to visit the Bills.com Debt Help page to read more about the various debt relief options available to consumers who are struggling with debt.
I wish you the best of luck in resolving this debt, and hope that the information I have provided helps you Find. Learn. Save.