How to Handle Debt Collection Harassment

Earlier this year, I set up a payment plan with a medical provider. But the billing office made an error and the next thing I knew I was receiving threatening messages from a third-party collections agency, informing me that I needed to pay the $2,500 debt immediately … or else.

I quickly straightened it out and got the debt collectors off my back, but not everyone is so lucky. Some people are subjected to numerous harassing phone calls each day for debts they may — or may not — owe.

The worst part? Debt collectors are allowed to make those repeated calls! According to the National Consumer Law Center, debt collectors for some credit card companies have limits up to 15 calls per account per day. Fifteen. That hardly seems like a limit.

Fortunately, we have six tips for handling threatening collection calls.

Know your rights. The Fair Debt Collection Practices Act, a federal law passed in 1977, spells out exactly what certain creditors can and cannot do in terms of getting you to pay up. If creditors are calling and threatening you, it's wise to familiarize yourself with the law so you can call them on it when they violate the rules. Collectors are not allowed to call before 8 a.m. or after 9 p.m. or on a Sunday, for example. They are also not allowed to use abusive, profane, or obscene language; they are not allowed to threaten violence; they are not allowed to add extra fees onto the debt; and they are not allowed to threaten a lawsuit.

Dan Picard, vice president of consumer lending & collections at Hanscom Federal Credit Union, points out that states can have their own debt collection statutes and guidelines. "Massachusetts is much more restrictive on allowable calls," he said. "For example, a debt collector can't call you at home more than twice for each debt in any seven-day period, or more than twice in a 30-day period in a place that's not your home. They also can't place calls to a place of employment once you've made an oral or written request not to do so." Massachusetts residents can read more about the state's Fair Debt Collection statutes and regulations here.

If you think your rights have been violated, file a complaint with the Federal Trade Commission.

Take good notes. This applies to calls you take and those that go to voice mail. Write down the date and time of the phone call, and list details of the conversation and/or message. Write down the name of the person calling, the agency they work for, their mailing address, the name of the alleged creditor, and the amount of money they claim you owe.
Insist on debt validation. Some debt collectors are notorious for unscrupulous practices, like threatening legal action on debt that is past the statute of limitations, which varies based on the type of debt as well as the state you live in. Moreover, you could be the target of a debt collection scam or simply not owe on a debt, so it's smart to politely insist that the collector validates the debt in writing. They must provide you with information on the amount of the debt, the original creditor, and the name of the person who owes the debt. By law, they have five days to send this notice and you have 30 days to dispute it. (Side note: Your dispute needs to be in writing, and you should send it via certified mail for proof of delivery.)
Don’t get chatty. Make sure you're not sharing personal information with the person on the other end of the line. Anything you say can (and probably will) be used against you — so don’t let a friendly debt collector fool you. Don’t verify the name of your employer, don’t admit that you just paid off your student loan, and don’t tell them that you took Dave Ramsey’s advice and set up an emergency fund. Simply let them know you're drafting a debt validation letter and leave it at that.
Hang up if you have to. If you're in a conversation with a collections agent and they start engaging in illegal practices, like making threats or using profane language, it's okay to hang up on them. No one deserves to be threatened or verbally abused. Just be sure to write down the collector's name, firm, and what they said should you need to file a complaint.
Don’t ignore legitimate collection calls. As many as 70 million Americans were contacted by debt collectors in 2017, according to estimates from the Consumer Financial Protection Bureau. And collectively, Americans owe more than $4 trillion. That’s a lot of debt, not to mention a lot of people receiving phone calls about said debt.

While it might be tempting to ignore legitimate collection calls when money is tight, it's always better for your long-term financial health to face a legitimate debt you owe head on. The sooner you address the problem, the more options you have to remedy it.

Credit cards can be a great financial tool, but for some, they lead to debt and financial trouble. On Wednesday, January 8, 2020 from 12:00 - 1:00 p.m. EST we'll be hosting a free webinar, Credit Card Makeover: Getting Out of Debt. It will provide an overview of credit card usage, warning signs of credit issues, and options for debt management and reconstructing existing credit.