Common Myths About Debt Collection and Consumers' Rights

June 28, 2012

Common Myths About Debt Collection and Consumers' Rights

People who have fallen behind in paying their bills may be facing collection actions from their creditors. They may be wondering how to stop creditor harassment and may end up doing more damage to their financial situations by believing myths about debt collection. Federal law does offer consumers protections from certain collection practices and people should be aware of their rights under the Fair Debt Collection Practices Act.

Debt Collection Myths

Several misconceptions are floating around about debt collection, and they confuse many. If people believe these false statements, it could end up costing them money. Some examples of debt-collection myths include:
-Medical debt cannot go to a collection company
-Once a person pays off a delinquent debt, it no longer shows up on a credit report
-Once a creditor has "charged off" a debt and sent it to a collection agency, the debtor no longer needs to pay the debt
-The debtor never signed a contract with the collection agency now trying to collect on the debt, so the collection agency cannot sue the debtor
-A creditor cannot sue a debtor if the debtor is in default or if the debtor is still making some payments on the debt

Consumer Protections in the FDCPA

Because there are so many myths about debt collection, people should be aware of the rights they have under the FDCPA. The FDCPA applies to personal debts, not business debts, and it prevents debt collectors from using deceptive or abusive practices to collect debts.

The law prohibits debt collectors from contacting debtors before 8:00 AM or after 9:00 PM, and if debtors tell collection agents that they may not receive calls at work, then collection agents may not contact debtors at work. If a debtor tells the collector in writing not to contact the debtor again in the future, the creditor must cease attempts at communication with the debtor. The law also prevents a collector from discussing a debt with anyone besides the debtor, unless it is the debtor's attorney.

When a collector does speak with a debtor, the FDCPA prevents the collector from employing a variety of objectionable practices, such as:
-Harassment: threats of violence, obscene language or repeated phone contact intended to annoy
-False statements: giving false information to credit reporting agencies, claiming to be associated with government agencies, telling the debtor he or she will be arrested for failing to pay or threatening legal action unless the creditor actually intends to take legal action
-Unfair practices: charging fees or interest prohibited by law or contacting a debtor by postcard

While the law offers some protections for consumers from debt collectors, one of the only sure ways to end creditor harassment is to consult an attorney who can discuss all of the legal options available to those with debt problems.

Article provided by The Law Office of Marcus L. Vanover PSC
Visit us at http://www.vanoverlawoffice.net