Collection agencies will usually attempt to contact you first through mail. In conjunction with collection agency laws, they must be discreet when they contract you. Nothing can be printed on the outside of the envelope to indicate its contents. The return address cannot reveal anything about the company so the address will probably just have the company’s initials. The same confidentiality rule also applies to telephone calls. If a collector calls and reaches someone other than the customer, the collector cannot tell that person why they are calling. Collectors cannot leave a message on an answering machine revealing their reasons for calling.
Be forewarned that if you return a call from the collection agency, they can legally use equipment to record the number you are calling from. So do not call from a number you do not want them to have. A collection agency can call you at work but cannot tell your employers and employees why they are calling, or try to get you fired.
Collection agency laws do not restrict what information can be given to credit bureaus. Agencies have the right to report your debt to one or more bureaus without your knowledge. Even if you get the debt paid off, the debt will remain on your report but will be marked “paid.” The debt will remain on your credit report for seven years from the date the delinquency first occurred. This rule has been specified by the Fair Credit Reporting Act. Nevertheless, just because the time on the debt expires does not mean you do not still owe the money. Collection agencies are not limited as to the amount of calls and letters they can send you after the time limit is up.
Collection agency laws vary from state to state. There are, however, certain rules and regulations that all agencies abide by. These rules have been specified by the Fair Debt Collection Practices Act. These laws apply only to third-party collection agencies, not to the companies you originally have the debt with. The Federal Trade Commission enforces the Fair Debt Collection Practices Act. Any violations made by collection agencies may be subject to fines, but only if a large number of people have suffered the same violation or injustice. The FTC does not investigate individual cases.
Collection agency laws prohibit third-party agencies from suing you. What they can do is recommend to the original company that suing would be a better way to obtain their money. Many collection agencies try not to make such recommendations because they feel it would reflect their inadequacy as a collection agency. Agencies can sue only if they purchase the chare-off account from the original company. Agencies cannot seize your property, assets, or possessions unless they have won their lawsuit against you. They cannot threaten you or commit any violent acts against you.
Something very few people know is that they have the right to tell a collection agency to stop calling or writing to them. You would have to write the collection agency and state that you do not intend to pay the debt or that you do not want them to further communicate with you. The collection agency can no longer call or write unless it is to inform you of any legal action they have decided to take against you. This “cease and desist” action is covered under the Fair Debt Collection Practices Act in section 805.
By Tamara C. Jude