The FTC had over seventy thousand complaints in 2007 leveled against debt collectors, third party agencies that collect debts for various businesses and banks. It can go without saying that not all debt collectors follow the rules. Here is some info that can help you to deal with (or not deal with) those collections agencies.
Are you aware of what debt collectors are?
When a financial institution has a problem collecting repayment of a debt from a debtor, they "hire" debt collectors (i.e. Sell the debt to the collection agency and then write the unpaid debt off for taxes) to handle the unpaid debt. Debt collectors have to work within the limits set in the FDCPA or Fair Debt Collection Practices Act in order to seek repayment of a debt. Any unpaid debt collections will likely show up on your credit report, will negatively affect your credit, and over time will keep you from being approved for credit cards, loans, apartments, and in some cases, even jobs.
When are debt collectors allowed to call?
The FTC, last year alone, received more than 100,000 complaints about collectors that were calling beyond the allowed periods of time. There may have even been more instances, but with consumers that did not complain about them to the FTC. Debt collectors are only legally allowed to call you during specific times of the day and night. If the collector is calling you outside of those periods of time, then they are violating the law and you should lodge a complaint about them in order to rectify the situation.
Is this your debt?
Do not simply take it for granted that that debt is actually yours. Debt collectors are not really known for their honesty, after all. You do reserve the right to have that debt collector validate the truth about whether or not the debt is yours, as well as whether or not they actually have the right to attempt collecting it from you. What this means is that they are going to have to provide some form of documentation paperwork from the initial creditor. If the debt collector is incapable of providing this proof to you, then they cannot legally collect the debt from you. You generally only have a short period of time in which to exercise this particular right, so make sure that you ask for a validation request immediately as soon as you are contacted for the first time by a debt collector.
Should you pay off the debt?
If the debt is really old, then you may just forget about it because after seven years, the statute of limitations for the debt is going to expire anyway. Still, you should understand the moral obligations because paying back the debt that you owe is definitely the right thing for you to do regardless of how old it is.
Photo Credits: eric731
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