Tricks Debt Collectors and Collection Agencies Use – Know Your Rights

by Hank

Debt Collectors are not your friends.  Dave Ramsey calls them the scum of the Earth.  The people who work for collection agencies and credit card companies will stop at nothing to get the money their company says that you owe them whether you really do or not.  They are paid bonuses and promoted based on how much money they collect from you.  Debt collection agencies buy bad debt from companies around the country for pennies on the dollar, and their ruthless phone callers keep up to 50% of the money they collect as their bonuses.

Collection company workers use every dirty trick in the book in order to get the money that they are owed.  They will berate you, challenge your manhood, shame you, question your beliefs and feelings, dispute your faith, etc.  They keep a detailed record of everything that you say and every excuse that you make.  If you make reference about your church or your religion, for example, they will quote you scripture the next time they call about how it is sinful not to pay your debts. 

The people calling you from the comfort of their cubicle will hide their identity from you as long as possible.  They will call and ask for you by your first name like you are their long lost friend from high school.  They will say that they need to update or verify your information and then ask you for everybody and their brother’s home , work, and cell phone numbers so that they can harass you late and squeal on you to your landlords and bosses.  Collection agents may also pose as paralegals or fraud investigators initially in order to keep you on the phone. 

There are a few things that you should know and keep in mind to help you battle these callous collection agents.  Consumers are protected by the Fair Debt Collection Practices Act.  You can find a complete listing of the act’s protections on the Federal Trade Commission’s websiteBut, here are a few of the highlights of the act…

  1. Once a debt collector receives written notice from a consumer that he or she refuses to pay the debt or wants the collector to stop further collection efforts, the debt collector must cease any further communication with the consumer.
  2. A debt collector may not engage in repeated personal contacts with a consumer with such frequency as to harass him (multiple phone calls repeatedly).
  3. Collectors cannot imply a threat, and they cannot use abusive language.
  4. Debt collectors are prohibited from “shaming” a customer into payment, by publicizing the debt.
  5. An individual debt collector must disclose his employer’s identity, when discussing the debt on the telephone with consumers and must not misrepresent his employer’s name during the conversation.
  6. A debt collector may not call the consumer at any time, or on any particular day, if he has credible information (from the consumer or elsewhere) that it is inconvenient.
  7. If a debt collector learns that a consumer is represented by an attorney in connection with the debt, the debt collector must contact only the attorney and must not contact the consumer.
  8. A debt collector may not call the consumer at work if he has reason to know the employer forbids such communication
  9. A debt collector may discuss the debt only with the parties specified by the consumer.  For example, unless the consumer has authorized the communication, a collector may not discuss the debt (such as a dishonored check) with a bank, or make a report on a consumer to a non-profit counseling service.
  10.  A debt collector may not make a misleading statement of law, falsely implying that the consumer has committed a crime, or mischaracterize what constitutes an offense by misstating or omitting significant elements of the offense.

While not paying your bills is bad and unethical, it is not a criminal offense.  It is a civil law violation.  It is illegal for a collection agency or their agent to threaten to pursue the prosecution of you criminally.  The United States does not have a debtors’ prison.  

What To Do.  Do not trust debt collectors.  They will give you financial advice that will make the most inexperienced investor cringe like draining your retirement accounts or taking out a second mortgage to pay off your credit card debts.  Also, do not allow creditors electronic access to your bank accounts.  Do not provide them with a post dated check.  They will wipe out your bank account despite promises to only withdraw the amount you establish in a payment plan.  If you did not get anything agreed to in writing, then it did not happen.  Is that legal?  No.  Will they do it and then call you a liar when you call them on it?  You better believe it.  Whenever you settle a debt with a collector, make them send you the agreement in writing with the account number listed and a statement stating that your payment is makes your account “paid in full”.  Write these things on any checks that you send to the collection agency or credit card company to prove later that it was used for the settlement of the debt.

Knowing these things can help you immensely when dealing with debt collectors.


Jerry February 11, 2009 at 5:17 pm

This is a great point. There is NO reason to deal with a debt collector who is overstepping his/her bounds. This happens a lot, and it leads to much frustration. I have been harassed four times over the past six years for a final phone bill that was actually paid IN FULL and on time. These different agencies would call at all hours and were extremely rude, even after I had faxed them proof of payment. There is no insurance that you will not receive such calls, even when you are not in the wrong!

Shenal Ross April 20, 2009 at 3:32 am

The way you have presented the tricks of the debt collectors and the way they try to cross their limit is really true. Majority of the people face these sorts of harassment. If ever you forget to pay any amount of debt, then there is no way for you to be spared. They will harass you so much that you have to forget peaceful nights, but when you are in need of debt, these debt providers will get you attracted to their different attractive schemes and will try to motivate you to avail their various available schemes. Once you are motivated and plunge into their very attractive schemes, you are no more respected if you fail to pay back.

Shenal Ross

Matthew Davis March 20, 2011 at 4:42 pm

I personally worked as a debt collector for 2 years. It was an interesting job. I would like an opportunity to set the record straight about a few of the things he said in this article. There are actually reasons why debt collectors try and hide their identities. By law, if you ask them their names, they have to give you it. However, they do not have to give out their last name. They may choose to give you their employee ID number instead. If there are any problems with their practice and you wish to file a complaint, any law enforcement agency can use that information to get their full and correct contact information. There are also some states that require all Debt Collectors to be licensed to conduct business in that state, i.e. contact any resident of that state. That license will include their full name, and any aliases that Debt collector uses. The reason they do that is for their protection. You never know when a consumer will use that information to harm you. Agreed that in my two years on the job, I got plenty of death threats, some of them funny, but some of them made you wonder. I know that at the end of the day, I did not want to wonder if some crazed man was sitting in the parking lot waiting for me to come out so that he could blow me away. Will most of the people you give that information to do that…no. But you also never know.

I have actually been on both sides of the coin. I have been a Debt Collector as well as a Consumer. As a Debt Collector, I took a lot of post dated checks, as well as I have paid a few debts that way. I cannot speak for all the Debt Collection Agencies out there, because there are a few that think that they can do whatever they want and get away with it, most of them will not. For proof, all you have to do is write down the name of the person you talk to, their employee ID number (which they must give you if you ask for it), the amount of the transaction, the date of the transaction, and a confirmation number if they have one. (I know for the company I worked for, a post dated check did not have a transaction number till it was actually processed, but a consumer could call back on the day of process and get one then.) Then if there is a problem, you can use that information to get it corrected, if it must go to court, that information should be enough to serve as proof. All phone calls with the consumer are recorded, all of them. And they are required to keep that information on file for a specific period of time although I do not remember how long now. The courts can use the information you gave them and get the call recording. That will be enough proof you should need (Note: I am not a lawyer, but I do know that if someone called with that information about a problem, my company would have taken care of it.) Remember that the collectors are not always taking too much on purpose, although I am sure that some do, they are human just like you, and do make mistakes. It is possible to accidently type in $200.00 when you meant to type in $20.00. Also if you do make a payment with a post dated check, ask for proof in writing. They will send a letter stating the date of the transaction and the amount. I have done this myself with different agencies.

One final note that is very important to understand, The Fair Debt Collection Practices Act (FDCPA) only applies to third party debt collectors. That is, the people from an outside agency that is hired to collect the debt on behalf of someone else. A company can have an internal collections department that handles bad debt, that department is not bound by the FDCPA and can do anything that their company policies allow them to do. For example, if you owed money to Verizon for an outstanding bill, Verizon’s collections department can call you as many times as they want, can say almost anything they want, and can do almost anything they want to get their money. I hope this is helpful.

Renrick king February 23, 2013 at 12:39 pm

I would like to know how much room is there for negotiation with the debt collector. Can they impress upon you what kind of settlement payment they want from you or can you negotiate what is doable by you. Say for instance you are owing around $2500.00. Can you negotiate manageable payments of say about $200.00 to $300.00 monthly?? Or do you have to do whatever payment plan they will allow you todo?? I know it probably woulddepend a lot on the agency you are dealing with but I guess my question is do you have that right to do that???

Dwight Snider June 17, 2016 at 1:08 pm

Interesting about post-dated checks.
I was a bill collector many years ago when we had virtually no limitations on what we could do.
I carried blank checks, and I mean blank. Only a check format with no names. I would ask the debtor to fill in the name of his bank, the date, amount, and sign it.
When the date come due, we would call the debtor up and tell him if he didn’t bring his account up to date we would turn the check over to the police check fraud division, since he knew there would be no money in his account when he wrote the check.

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