Month: April 2011

Strategies for Handling Collection Accounts

Collections and charge off accounts are the dark hole of credit repair; they have the power to tarnish your credit score for nearly a decade. What’s worse, the responsible act of repaying your debt can actually hurt your score further, simply by reactivating your account. Without proper attention and planning, the effects can be devastating. Depending on your account status, there may be nothing you can do to repair the damage, but minimizing future pitfalls can help improve your credit score. Before giving up and giving in to bad credit, consider the following options.

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Collections and Telephone Calls

Consumers have multiple laws at their disposal regarding their credit reports and debt collection. One of the most important laws regarding collection agencies and the collection of debt is the Fair Debt Collection Practices Act (FDCPA). This law provides behavioral standards for acceptable third-party collections.

According to this law, at all times, debt collection agencies must treat the consumer with courtesy, respect and fairness. The FDCPA prevents bill collectors from using profanity, making threats, falsely inflating the amounts owed, bullying the consumer or engaging in other abusive tactics. Moreover, this consumer protection statute requires collectors to provide full account history and proof of account ownership before being able to collect a debt or even to report information about it to credit bureaus. Unfortunately, there are collectors out there that don’t abide by the rules. So you benefit by knowing your rights.

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Fair Debt Collection – Thwarting Abusive Collections Tactics

Against the backdrop of the recent recession, many people, through no fault of their own, are finding themselves in situations where they cannot afford to pay their bills. This all-too-familiar scenario has created a surge in consumer collection accounts as well as a rising number of complaints about overly aggressive bill collectors and their abusive tactics.

In March of 2011, the Federal Trade Commission (FTC) released a Congressional report that demonstrated that in 2010 there was a 17 percent rise in the number of complaints involving consumer debt collection. Moreover, complaints about third-party bill collectors rose by a stark 25 percent. Overall, in 2010, consumer complaints about abusive and unlawful debt collection practices superseded every other compliant category except for identify theft. Perhaps not surprising because of easy access, the most frequent occurring complaint about these debt recovery agencies was telephone harassment of the debtor. Other complaints included the misrepresentation of amounts owed, demanding unlawful fees, contacting the consumer during prohibited times and more.

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