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Posts Tagged ‘collection agency’

Fed-up consumers are fighting back against overly aggressive debt collectors, slapping collection agencies and creditors with a record 7,923 lawsuits from January 1 through August 15, 2011, according to a report in Collections & Credit Risk.

By comparison, in the same period from a year ago, consumers filed only 7,169 such lawsuits. That means lawsuits against debt collectors are up more than 10% so far in 2011.

Topping the list of legal complaints were alleged violations of the Fair Debt Collection Practices Act, or FDCPA. Consumers claimed that collection agents violated the FDCPA in 7,249 of those lawsuits.

Violations of the Fair Credit Reporting Act, or FDCPA, were cited in 833 lawsuits, and Truth-in-Lending Act violations were cited in 705 cases.

The figures are based on data gathered from U.S. District Courts via WebRecon LLC, a Grand Rapids, Michigan based research firm.

As a sign of how busy the courts are, in the Aug. 1-15, 2011 period alone, nearly 500 different collection agencies and creditors were sued for various consumer statute violations.

The places where lawsuits were most frequently filed in the Aug. 1-15, 2011 period were: Colorado District Court, Denver, 33 lawsuits; New York Eastern District Court, Brooklyn, 25 lawsuits; and the California Central District Court, Los Angeles, and Pennsylvania Eastern District Court, Philadelphia, which each had 24 lawsuits.

If debt collectors are driving you crazy and using illegal, over-the-top tactics to try to force you to pay debts, here’s some advice on how to deal with those debt collectors.

Additionally, read this advice on what to do if you owe but can’t pay or you have received a court notice regarding a debt or a creditor.

Lastly, it’s vitally important to know your rights under the law, so here is a synopsis of the Fair Debt Collections Practices Act, which gives you 10 areas of protection. It also tells you what creditors legally can and can’t do.

Whatever the situation, if a debt collector violates your rights, document the incident and take action by reporting the agency to the Federal Trade Commission. Don’t stand for abusive creditors and collection agents who break the law.

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Q: What information about you will a creditor turn over to a bill collector?

A: The answer is pretty much everything they can about you and the debt including your phone number, address, and whatever additional information they have agreed to provide the collector or collection agency. Here is a very brief article that explains in short detail the collection process. If you would like to receive a free credit analysis complements of The Money Coach, click here: http://askthemoneycoach.com/debtfree/

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Your bill collector may have sent you a letter contacting you about your outstanding debt or called you to introduce themselves. If you choose to accept a phone call and engage a debt collector in conversation, you may have more negotiating power if you record your call. You do have the right to record your phone calls with bill collectors, but only some people actually do. The most important reason to record your call is to have a record of the conversation that is about to transpire. You may need to use this conversation as proof of a negotiation or agreement at a later date. Informing the bill collector that you are recording the call also informs them that you are serious about the situation and are looking to come to some type of agreement.

Another reason to record your call is to prevent being abused or harassed by your creditor. Under the Fair Debt Collection Practices Act, it is unlawful for a bill collector to be abusive, make false threats or otherwise harass you over the phone, or through other forms of communication. If a bill collector is engaging in these activities and you are able to record the call, you can take them to court for breaking the law. The courts are most likely going to relieve you of your debts and may also pay you in damages after such an event.

Ultimately, recording a phone call with a bill collector will help to keep them in check. The person is much more likely to deal with you professionally – without harassment, intimidation or any type of abuse – if they know they are being taped. Keep in mind that bill collectors are trained to intimidate you, even if they don’t go to the extreme with harassment or by being abusive. They may say things in a certain way or use choice words to instill fear in you and prompt you to pay immediately. Remember that these are all tactics to get you to pay on the spot. You have every right to ignore their statements and choose the best course of action that you see fit, after confirming the debt and making an attempt to negotiate.

It’s always important to document everything and keep track of the date and time of the call, what you talked about, and any terms that were agreed upon. Recording a call will simply help with this process and can put you at an advantage when you want to negotiate and resolve your case.

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Dealing with a collection agency can be stressful. You need to flex some negotiating skills in order to work with debt collectors and if
you’re on a monthly payment plan, ensure that every single payment gets to them on time. Remember that a single missed payment could change the financing agreement and you could end up paying extra fees.

Whenever possible, it’s in your best interest to negotiate a lump sum payment instead of maintaining a monthly payment schedule. If you want to cancel an automatic payment to a collection agency, you will need to request a “stop payment” from your bank and pay the appropriate fees. Remember that the collection agency will need an explanation on why you are stopping payment, and you may need to negotiate a payment plan with them.

Here are some tips for renegotiating the amount you are paying to a collection agency:

#1: Don’t believe that your wages are automatically going to be garnished.

Debt collectors often use this as a scare tactic to get you to pay the entire amount as quickly as possible, but the reality is, they will need to take you to court first before your wages could be garnished. If you haven’t received a court letter, it’s probably not going to happen. Don’t let the debt collector use fear to prompt a payment!

#2: Send a letter of your request.

Avoid talking on the phone as an exclusive way to confirm a negotiation. An agreement made over the phone may or may not be valid, so you will need to make sure you have everything in writing. Send a professional letter stating your intent to pay an agreed- upon/negotiated amount, and keep a copy of all correspondence as things move forward.

#3: Offer a lump sum payment for the new amount.

Some collection agencies may be willing to renegotiate when they know that you will actually pay the proposed balance. Remember that it’s in their best interest to settle as many delinquent accounts as possible each month. If they can get you to pay and close out your account – even if it’s for less than the original balance – they will still be making a commission. If you can feasibly make a lump sum payment to clear up your account balance, make an offer they can’t refuse and follow through with the payment.

#4: Consider a counter offer.

Remember that the collection agency does have the right to refuse your offer, but they may also come back with a counter offer. Start your offer low – perhaps offering 25 cents on the dollar or so – so that you can consider a counter offer as the negotiation process
continues.

#5: Request a written receipt of payment.

If you do agree upon a lump sum payment account or have successfully renegotiated the outstanding balance, make sure you have
everything in writing. Check your credit report within a few months of making the payment to make sure it’s been cleared from your credit history. Keep copies of everything that shows your balance is paid in full so that you have something to show a future lender.

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