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Regrettably debt collectors are often unethical. This has resulted in the government passing legislation to protect you from unethical debt collection tactics.
If the debt they are contacting you about is accurate then you should ask for debt validation. This should be done in writing.
If you neglect to do this and ask for validation over the phone 99% of the time it will be completely ignored. Additionally send it certified mail so you have proof that they received your validation letter.
If your debt is validated and it is within the statute of limitations of your state then you can negotiate payments. Limitations are often seven years from the date of delinquency.
When negotiating a settlement payment you should never pay the full amount. This is because your account has been bought from the original creditor for just pennies on the dollar. We suggest you start your settlement offer at 50% of the balance.
Debt collectors will always accept a partial payment. This is because there only way to recoup the money they spent on your debt is; by accepting partial payment or selling the debt for a fraction of what they paid for it.
When you agree on a settlement payment you should get in writing from them that in exchange for your payment they will not report any derogatory information to the bureaus. If you do not do this you will stop the phone calls, but you will have a whole new set of problems because of a poor credit score.
If you just pay the debt it will be recorded as a paid collection. This is still a derogatory mark on your credit and will not improve your score.
I repeat you must get in writing that no negative information is going to be posted to your report regarding the debt. In a rare case that negative information has already been reported you must get them to agree to erase it from your report.
If you do not do this you will not benefit from paying the collection. Also always pay with a paper check and no other form. Just so you know you can actually use the memo line to repeat the agreed upon contract, when the check is cashed you will have a binding contract.
If you are being harassed by a collection agency you are not alone. Additionally they only can legally do so much. The Fair Debt Collections Practices Act says that a debt collector can not;
- Threaten legal action
- Constant harassing calls
- Call your place of employment (once asked not to)
- Claim to be anyone they are not
- Threaten to sue (unless they are taking legal action)
- Threaten to garnish wages or seize property (each state is specific about what is legal, often a court order is needed)
- Call your friends or family members and speak with them about your debt
- Only call between 8am and 9 pm
- Call you if you have notified them that you will not accept calls regarding this debt.
Unfortunately these regulations are often ignored. If you have been a victim you should report the agency to the FTC and the Attorney General. Many collection agencies have been fined because of violation of the FDCPA.
Additionally you can file a lawsuit against the agency and be awarded monetary damages. Make sure to keep all communications in writing in case they are in violation.
