Getting a loan is a two-way street: you, as a borrower, need lenders for your immediate cash source, and lenders need you to benefit their businesses. With this, you have the right to fair treatment, from acquiring the right loan that will work best for your financial needs to repaying the amount you owe with no hidden costs.
In the event you fail to keep up with your payments, the lender might be forced to commission a debt collection agency to persuade you into paying your debts. Debt collectors have the reputation of being intimidating but that doesn’t mean you can be submissive, especially if they’re crossing the line – if they’re blatantly hurting not only your wallet but also your peace of mind.
So if you’re dealing with a debt collector, how would you differentiate a professional and committed collector and an abusive and deceptive one? To exercise your consumer rights and protect you from paying what you didn’t owe, here are five demeaning actions of bad debt collectors you should never tolerate.
1. Contact you at wrong circumstances
Debt collectors should be following rules and regulations that respect the rights of consumers.
It is advised to discuss all information about the debt over the phone. With this, certain phone call regulations must be observed. As a consumer, you may decline a call if its timing violates the agreement or if it’s intended to annoy, threaten, and harass you.
In the U.S., all collectors must comply with the Fair Debt Collection Practices Act (FDCPA). As stated in the act, the proper time for contacting consumers shouldn’t be earlier than 8:00 a.m. and not later than 9:00 p.m. Collectors should also not contact or engage in a phone conversation repeatedly, especially during the consumers’ work hours.
Face-to-face or home visits should only take place if necessary. It is also stated that once the consumer has already stated in the paper that he or she doesn’t want to be contacted anymore, the debt collector must stop engaging with the consumer.
2. Disclose private information to other people
Debt collectors have no right to reveal any information about the nature of your debt and other confidential statement to other people. Your lawyer, spouse, and guardians (if you’re a minor) are the only individuals whom your collectors may talk to regarding your debt status.
Collectors may refer to third parties to reach you. However, they are not allowed to do it more than once. Only significant information such as home and work address and contact number should be asked.
Furthermore, any action that may cause public humiliation on your end is considered unlawful Publishing your name or address on a “bad debt” list or sending you postcards that cause embarrassment are some examples.
3. Falsely claim to be a higher being
Debt collectors are not allowed to pretend to work for the law enforcement, federal and state government agencies, or credit bureaus just to force you to pay. That being the case, debt collectors have no right to threaten you with arrests and legal actions if you fail to repay your debts.
Collection agencies are not authorized to issue arrest warrants just because you default on your loan. Only a court judge has the jurisdiction to declare arrest warrants and put you in jail, usually due to your failure to show up in court to settle your debts. What debt collectors can do is inform you if a lawsuit has been filed against you and provide you with a legitimate court summons to support the claim.
In addition, always watch out for other forms of fraud like forged documents or false information about the debt collection company. Read the fine print carefully and always keep track of the papers they send you.
4. Misrepresent the amount you owe
Be mindful of collectors who force you to pay for the debts you either didn’t owe or you’re not required to repay anymore. These old debts, also called “zombie debts,” are the ones sold by your original creditors or lenders to a debt collection company, which they still try to collect.
Some debt collectors might rely on incorrect information and try to collect debts which have already been discharged in bankruptcy or may belong to other consumers with an identical name. Some bad debt collectors also add interest, fee, and other charges on top of the amount you owe.
Before paying such unfamiliar debts, you should be able to receive a written notice within five days of the first encounter stating how much you owe, the name of your lender, and your repayment options. If the collector refuses to send you a statement that you owe the money, then it’s a strong sign it’s not legitimate.
5. Use profane words and actions
While it is the debt collector’s duty to make a demand for payment, it is not part of their job to treat you less of a human being for your unpaid debts. It’s never acceptable for collectors to threaten consumers with violence or bodily harm, deliver messages in a rude and vulgar manner, and receive obscene and degrading remarks during the communication about debts.
Knowing your rights gives you power. If a collector is taking these crooked deeds, they are clearly breaking policies. That said, you are in the right position to file a complaint.
Author Bio: Carmina Natividad is a resident writer for QuickCash, an Australian-based business, providing short-term cash loans for your borrowing needs. She is passionate about writing articles regarding personal finance and money hacks.