Stopping debt collectors from calling is easier than you might think. No, I don't mean just pay the debt. Duh. If you could do that, everything would be simple, right?
Debt collectors are regulated by certain laws, and I'll explain what they are. But here's the problem: they don't obey them. It's human nature. You're regulated by certain laws too, but you don't always obey them. Some are downright annoying, like speed limits. But if you see a cop in the mirror, I bet you obey the speed limit.
So here are the laws, and here's how to do the equivalent of having a cop in a debt collector's rear-view mirror.
Third-party Collectors: The Meanest Ones.
These are what you normally think of as debt collectors. You and the lender are the first and second party, but these are the third party, who are hired just to collect the debt. They're the best, meanest and sneakiest kind of debt collectors, because that's all they do for a living, so they know all the tricks. The good news is that you really have some legal muscle when it comes to these guys.
First, don't think you have to talk to them as if they're a real human being. I mean really, it's all an act. They're not really angry at you, they're not really counseling you about feeling guilty, they're nobody to you and you're nobody to them. It's just business. So don't bother trying to win their sympathy by explaining your situation, because all they care about is whether you're going to pay or not. Don't bother swearing and yelling at them, because they've heard it all and if they cared, they wouldn't be in this business. Just be business-like and do what you need to do.
The Fair Debt Collection Practices Act (FDCPA) which is a federal law, says that if you tell them in writing to quit calling, they have to quit calling. Yep. Really. You still owe the debt, and they can still sue you, so this may mean they'll either give up or go ahead and sue. But if you can't pay the debt and can't work out a payment plan with them, that's what it's going to come down to in the end anyway.
Get their address. Within five days of their first call, they have to send you a letter, which will have their address. If it's been a while or you don't have it or whatever, next time they call, ask for their address. If they balk, come on, you have to have their address to pay the debt, right? So don't tell them you're going to mail a check, but you can say something like: "where would I send something to you by mail?" Or, "I'm getting tired of you calling, so what's your mailing address?" You don't want the address of the original creditor, you want the address of the collection agency. By law, they have to give it to you. Worst case, try a reverse look-up on the phone number.
When you get the address, type up a letter something like the following, keep a copy, and send it to them by certified mail (keep the receipt as proof):
"I hereby notify you to cease all communication with me at home, at work, by cell phone or landline. I no longer wish to communicate with you. The Fair Debt Collection Practices Act, 15 USD 1692c, Section 805c states that you must cease all communication with me upon receipt of this notice. You may only contact me in the future as allowed by the FDCPA, to inform me that you are stopping collection efforts, or that you intend to invoke or are invoking specified remedies. I am aware that any future contact in violation of the FDCA can be punished by a fine of up to $1,000 for each occurrence and if you continue to contact me, I will pursue all legal remedies available."
There's no magic in the wording, so you can change it however you want. All it really needs to say is "Stop contacting me." But something official-sounding like the above is a little more like seeing flashing blue lights in their rear-view mirror.
If it works and silence follows, great. You still owe the debt, but you can spend your time now figuring out how to deal with that rather than answering the phone.
If it doesn't work, see the comments in this previous post. That thing about a $1,000 fine if they keep it up isn't just a bluff. Be business-like and serious, because you have the upper hand now, and remind them about the law.
If they don't stop, besides sueing them personally, you can complain to the FTC, which doesn't do anything for you but puts the complaint on record. If the FTC gets enough complaints about one company, it eventually wakes up and does something, but don't get your hopes up.
You can also contact your state's attorney general. Use the annoying little map on this page to click on your state and get the website and address.
Or complain to the Better Business Bureau in their state, too, or one of the online consumer complaint forums.
Some debt collectors buy debt outright for a few cents on the dollar, hoping to make a profit if they collect some of the debts. Other places are just hired by the company you owe money to. If this is a hired collector, you can also send a certified letter to the company that hired them (the one who originally loaned you money), stating that the debt collected they hired is illegally calling you in violation of the FDCPA after being given notice to stop and that you have complained to the attorney general, the FTC, and are prepared to sue for each further call that's in violation. Companies don't generally like to find out their subcontractors are violating federal law; it makes them real nervous. So you might even find the original creditor will side with you and help.
Here's the bad news: the FDCPA doesn't apply to them. First-party collectors (also called original creditors) are the ones who actually loaned you the money originally, like a credit card, bank or payday loan place. If their own employees call up under the company's own name and try to collect the debt, forget all the above about the federal laws, because none of it applies.
First-party collectors are regulated by your individual state law which, obviously, varies. This is going to require some research on your part. Contacting your state's attorney general or consumer affairs office is a good place to start, or try searching for "first party creditors" or "original creditors" or "first party debt collectors," or something like that, and the name of your state.
You may find that your state laws are pretty similar to the FDCPA. Honestly, what politician wants to tell his constituents he's easy on debt collectors? Besides, politicians are lazy, so they don't like to write up new laws if they don't have to; it's easier just to copy.
I've known a few people who do this for payday loan places. Some of them try but they hate their jobs and just aren't real good at it. Some of them like it and are just as sneaky and mean as the third-party collectors, but if they're really good, they natural gravitate toward working for professional collection agencies.
So a lot of original creditors think it's a hassle to hire and train their own employees to collect bills and they can't wait to turn the debt over to a collection agency, usually after about six months past due. Which is good for you, actually, because then the collection agency is subject to the FDCPA and the problem gets simpler.
Bottom line, forget the drama. This is a business for them; make it a business for you.
6:02 p.m. February 17
a debt collector called and i said that they had to obey the FDCPA (about calling me at work) and they said they were first party collectors and didn't have to obey. I said no way because they never loaned me money. they said they bought the debt from the original lender and weren't just working for somebody else so they were first party collectors now since the debt belonged to them. is that true?
9:45 p.m. February 17
No. They weren't the first to try that loophole, but the FTC published an opinion on that: "In sum, it is our view that a party that obtains consumer obligations in default for the purpose of collection is a "debt collector" under the FDCPA, even if that party actually purchases the accounts from the original creditor." I don't think there's been any change, and though it's not "binding," I doubt they really want to take it to federal court just to prove they're under the laws of your state rather than federal laws.
11:55 p.m. February 17
How do you know if the company is a first party or third party?
8:59 a.m. February 18
In general, roughly speaking, if you recognize the name of the company as somebody you borrowed money from, they're a first party. If you don't, they're not. You don't have to be a detective about this. The FDCPA says that if they use a name that makes them sound like a third-party collection agency, then they come under the law, even if they're actually employees of the original creditor. See Paragraph 803(6) in the FDCPA link in the article.
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