Harassment by Collection Agencies: What Are Your Rights?

By Jesse Jurgenson
The Village Financial Resource Center

Eleven percent of consumer complaints to the Federal Trade Commission in 2010 were regarding debt collection, second only to identity theft complaints. If you owe money and collection agencies are calling day and night—federal law requires that 3rd party collection agencies treat you fairly.

Collection agents may not:

  • Call before 8 a.m. or after 9 p.m.
  • Talk to anyone but you (or your attorney, if you have one) about the debt.
  • Threaten to garnish wages or seize property unless they actually intend to do so. Garnishment is illegal in some states, and in others requires a court order. In many cases, property seizure is not permitted. Check with your state attorney general's office or state consumer protection office to find out what is legal in your state.
  • Threaten to sue unless they are actually taking legal action. In some states, third-party collection agencies may not sue.
  • Threaten you with arrest or jail.
  • Use obscene language.
  • Annoy or harass you with repeated calls.
  • Call at work if you have asked them to stop.
  • Falsely claim to be an attorney, a representative from a credit bureau or a member of law enforcement.

One lesser-known fact about the Fair Debt Collection Practices Act is that it applies to 3rd party debt collectors, but not the original creditor. Third-party debt collectors are agencies “hired” by the original creditor to collect the debt on their behalf. For example: you do not pay your ABC Bank credit card long enough and it gets sent to 123 Collection Agency. 123 Collection Agency has to follow the provisions of the Act—if ABC Bank chooses to collect the debt without sending it to 123 Collection Agency, ABC Bank is not bound by the terms of the law.

What can you do if you are receiving calls from collection agencies that may, or may not, be breaking these laws? Here are some of your options:

  • Stop taking the phone calls. No one is forcing you to take the calls and be harassed. This, of course, does not make the debt go away and I highly suggest you don’t ignore the debt. The issue does need to be dealt with, but you deserve to be treated with respect and dignity. Try complaining to the original creditor about the mistreatment their hired guns have been doling out and maybe they will work with you directly for payment.
  • Set up payment arrangements. Most collection agencies will stop making phone calls when they are receiving steady and substantial payments. Get any payment agreements in writing and always pay with paper checks, not by debit card or electronic bank drafts. It's to your advantage to have a physical record that you've paid, plus you control exactly what you're paying and when.
  • Keep your own records. Consider writing down all of the important information from your phone calls with the collectors. Record the date, time, person to whom you are speaking, and notes from what was said during the conversation. Consider recording the conversation if you feel your rights are being violated. North Dakota and Minnesota are called one-party recording states which mean that it is legal if at least one party in the conversation agrees to the recording (you would be the consenting party). You do not need to tell the collector the call is being recorded but you may get a very different tone if you tell them you are recording the call (even if you are not.)
  • File complaints. Contact your state’s Attorney General’s office and file an official complaint about the treatment you have been receiving. This is where all of those great notes you have been keeping come in handy. You may also file a complaint to the Federal Trade Commission. It may also be helpful to understand your states laws concerning debts so that you may counteract the threats the collector is making such as threatening to sue you if you live in a state where they are not legally able too.
  • Sue. Contact an attorney to explore the option of suing the collection agency for their violations of the Fair Debt Collection Practices Act. You may be entitled to monetary damages. One caveat to this option: Suing, even if you win, will not make the debt go away!