Debt Collections and Your Rights

It’s a nightmare scenario: the phone rings late one evening. The person on the line tells you that you are behind on your bill payments, and a 15 percent fee has been added to the balance. They even threaten legal action if you cannot pay. For those who say, "I just want to fix my credit," dealing with outstanding balances and debt collectors is a difficult stress to handle, especially if they are unaware of their rights. Of course, the best way to fix credit is to pay those balances. In the meantime, learn more about your rights when it comes to debt collectors.

The Fair Debt Collection Practices Act (FDCPA) is part of the Consumer Credit Protection Act (CCPA). The FDCPA presents a list of limitations for debt collector practices in order to protect consumers from abuses. A few examples of these are:

• Calling between the hours of 9:00 p.m. to 8:00 a.m. local time. Calling during evening and early morning hours is considered harassment.
• Contacting you if you have sent a letter requesting them to stop.
• Adding unlawful charges to your account. Consumer credit accounts have late fee structures spelled out in their contracts. Your creditor cannot add additional charges to these fees, and neither can debt collectors.
• Contacting anyone besides your spouse or attorney about your account. Debt collectors that harass your relatives and provide your personal account information are participating in illegal actions.
• Reporting false items on your credit report. As someone who wants to take steps to fix their credit, debt collectors cannot hinder this process by adding negative items to your credit report without just cause.

If you are faced with debt collectors on the road to fixing your credit, it is helpful to understand the debt collector code of conduct outlined in the FDCPA. When speaking with you, every debt collector must:

• Identify themselves as a debt collector and state that they are gathering information about an outstanding balance
• Notify you of your rights to dispute the debt within 30 days
• Supply you with the name and address of the initial creditor upon written request
• Provide a written statement within five days of your initial contact, stating the balance owed
• File any lawsuits within your geographical area, allowing you the opportunity to respond

Fixing your credit is an important part of financial freedom and stability, and debt collectors do not have the right to harass you along the way. Sometimes, dealing with them can be as simple as saying, "I want to fix my credit, and I will pay my balance as soon as possible." However, if your situation proves to be more challenging, know your rights under FDCPA and keep working toward your credit repair.