Know Your Rights About Debt Collector Calls

What to do when a debt collector calls

SAN MATEO, Calif., Aug. 2, 2006 - Every year, thousands of consumers wrangle with collections agencies. Some debate debts that haven’t been accurately reported, while others struggle with guilt over past-due payments they are attempting to pay. For either group, reports that consumers can take charge of the debt collections process. Every year, the U.S. Better Business Bureaus (BBB) rank their worst 10 industries by number of consumer complaints received, and collection agencies appear with great regularity. For 2005, collection agencies rank No. 6 on the BBB’s list - with more complaints than banks, phone companies, credit card issuers and auto repair businesses. The New York Times recently reported the Federal Trade Commission (FTC) received 66,627 complaints against third-party debt collectors during 2005. That number exceeds complaints against any other industry - and it has increased by six times since 1999. "The high level of complaints does have a basis," noted Brad Stroh, chair of "Many collection agencies are notorious for using every tactic in the book to convince people to pay, from phone calls to workplaces and relatives, to threats of legal action, to ignoring repeated requests to be removed from call lists. The worst debt collectors might try to enforce debts that aren’t even real." Many consumers do not realize that these tactics often violate federal and/or state laws. Consumers can, however, level the playing field with collectors with knowledge and preparation. "To combat this intimidating industry, you need to educate yourself. If collectors are calling, learn what to do, and what your choices and rights are," Stroh said. "If you are in serious debt hardship, know you have options, even in the wake of bankruptcy reform laws enacted last year." Consumers can take steps including:

  • Learn the rules - Understand the legal limits of debt collection. The FTC, which enforces the 1977 Fair Debt Collection Practices Act (FDCPA), has an informative Web page at In short: Debt collectors can’t harass or threaten consumers, make false statements, invade debtors’ privacy, or lie.
  • Fight invalid claims - If a collector is demanding payment of a debt you don’t owe, or more than you owe, you can dispute the debt in writing. The formal terms are "debt verification" or "debt validation." Within five days of first contacting you, the FDCPA requires debt collectors to notify you of your right to validate the debt. You must write to request verification within 30 days of when you are first informed of the debt. Sending your request by certified mail is wise.
  • Keep good records - Keep copies of all collections-related correspondence. Pay debts only after receiving written notice of the amount due. Keep records of all payments.
  • Choose communications routes - Debt collectors may not force you to respond immediately. If they catch you off-guard, ask them to call you back in an hour so you can plan. If they call at work or a relative’s home, tell them you are formally requesting they not call you at that location. You also can write to formally request they cease and desist from contacting you, although this does NOT eliminate any debt you owe. "Be forewarned, however, that this strategy may lead a collector to escalate collections by sending the debt to a law firm," Stroh added.
  • Report violations - If you believe a debt collector is breaking the law, you can report the collections agency to the Federal Trade Commission and your state Attorney General’s office.
  • Get help - Sites such as provide resources, education and tools to understand your financial situation. They also can put you in touch with providers to help if you are struggling with debt - without the hassles and pressure of debt collectors.

"Don’t lose hope or faith in yourself," Stroh advised. "Even if you’ve fallen behind on bills, remember you are still a valuable person who deserves not to be harassed. And know that many people have paid their way out of debt. Any debt repayment takes time, and debt collectors must understand and respect that basic requirement of collections." Based in San Mateo, Calif., is a free one-stop online portal where consumers can educate themselves about complex personal finance issues and save money by choosing the best-value products and services. Since 2002,’s partner company, Freedom Financial Network, has provided consumer debt resolution services, serving more than 7,500 customers nationwide and managing more than $250 million in consumer debt. The company’s co-founders and CEOs, Andrew Housser and Brad Stroh, were recently named Northern California finalists in Ernst & Young’s 2006 Entrepreneur of the Year Awards.