Collection Agencies, Courts and Your Rights

In Washington state lawyers have filed suit against a collection agency that under normal circumstances would seem to be violating rules about debt collection. In this particular case it is unclear whether the suit has merit, because the company has been sued for this before and won. Whether it’s true or not, it’s worthwhile for you to know your rights as a debtor when it comes to collections and what collection agencies are legally allowed to do.

The case in Washington involves letters that look like they are coming from county prosecutors. The company has agreements with the prosecutors to send the letters that look like someone who has written a bad check could be charged with a crime, but the letters come from the collection agency itself, not the prosecutor.

Collectors were doing the same thing in Massachusetts, but district attorneys there decided to stop it while they considered how to make sure the practice was legal.

Since the collectors did have agreements with county officials in those cases, they may have legal wiggle room. If this were standard debt collecting, however, there is little question but that their conduct was illegal.

Should you find yourself on the phone with a collection agency, here are some of the most important rules you should know. These are all based on federal law. Your state may have tougher restrictions.

Debt collectors cannot:

  • Call before 8 a.m. or after 9 p.m.
  • Call you at work if your employer prohibits personal calls.
  • Use obscene language with you.
  • Publish your name in a list of consumers refusing to pay debts, except with a credit-reporting agency.
  • Call you constantly as a way of trying to annoy you.
  • Call you without identifying who they are.
  • Tell you their communication is from an attorney if in fact it is not.
  • Tell you they will take any legal action unless they legitimately intend to do so.
  • Send you documentation that looks like it is coming from a court official.

These are just a few of the rules governing collection agencies. If you are facing problems with a collector, the Federal Trade Commission posts its rules online. Should a collector be found to violate the rules the company can be found to owe the consumer up to $1,000.

The bigger question to consider is whether your single issue with a collector is a symptom of a larger problem. Are your debts and obligations spiraling out of control?

If so, you may wish to speak to someone who can help, such as the credit counselors at American Financial Solutions or other non-profit organizations. The counseling is free and the experts you will speak with can help you decide which options you should consider in handling your finances. Those options include options as simple as education on budgeting, to setting up a debt management plan, or in the worst cases whether bankruptcy is your best option. The counseling is free. If you go with the debt management plan there is a small set-up and maintenance fee.