Debt Collectors are people too and they’re just doing their jobs, but being on the wrong end of debt collections isn’t a fun time AND the debt collectors themselves aren’t always on the up and up. Sometimes they use some shady tactics. So say you’ve found yourself in a bad situation and trying to avoid a collector, you’re mid-text message and the phone rings, you answer by accident and it turns out to be a collector…the caller is looking to get as much money as possible from you, and while it may feel cathartic to finally square up with your debtor, don’t give away the farm — or any of the things listed below.
1. Never Admit The Debt Is Yours
These calls are monitored for quality assurance purposes. A verbal admission could revive expired debt that you no longer owe. Even if the debt sounds vaguely familiar, make sure the caller represents the agency that’s been assigned to collect.
Before confirming that you owe the debt that the caller is referring to, request written validation. You’ll be mailed a statement showing the amount and original lender of the debt, as well as some details on the collection agency.
2. Never Give A Partial Payment (before a settlement is reached on the full amount)
Each state has regulations on debt expiration. Even after the statute of limitations has expired, some collectors may still continue to pursue a debt. If they can convince you to make a partial payment, the expiry period starts over, and they have more time to chase down the balance due. It’s important to note that if you are sued for repayment of an expired debt and you don’t show up to defend yourself, you may still be held liable. With a court order in hand, the lender may even be able to garnish your wages.
3. Never Give Bank Account Information
So you’ve finally come to a settlement agreement, and you’re ready to pay. Then the debt collector asks for your bank account and routing numbers. Do not provide this information. Fraud isn’t a guarantee, but it’s certainly possible. Once that information is in the collector’s hands, “mistakes” can happen. After all, collection agencies get to keep some or all of the debt they collect, and their employees often earn a commission, so the incentive to withdraw more than the agreed-upon amount is high.
You may have the time, energy, and/or legal assistance to sort everything out after the fact. But who wants to deal with that? Alternatively, what if you lose your job and are suddenly unable to make the settlement payments as agreed? The next business to hire a collection agency to track you down could be your bank. Overdraft and insufficient funds fees vary and multiply like fake news.
To protect your bank account from any excessive withdrawals, consider making payments with classic checks sent via certified mail. This payment method is traceable and limits the payee to the authorized amount.
4. Never Give Other Contact Information
Once they have you on the phone, debt collectors often ask you for additional phone numbers, employer information, and maybe even some info on your family members. You are not required to provide this information. The debt collector has already found a way to reach you this time — and will undoubtedly manage if they need to reach you again.
Here are a few more things you shouldn’t provide to debt collectors:
Additional Phone Numbers (other than what they already have)
Mailing Address (unless you intend on coming to a payment agreement)
Employer or Past Employers
Family Information (ex. spouse’s employer or phone number)
Bank Account Information
Credit Card Number
Are there exceptions to this rule? Certainly. But in general, when you are being cold-called by a collection agency, you should treat the caller with skepticism until the collector can be authenticated and the debt can be verified in writing.
5. Don’t Take Threats Seriously
Debt collectors will make all kinds of threats, including threatening to call the police (which is illegal but won’t stop them).
They’ll also tell you they’re going to call your friends and family and tell them you are a deadbeat. They’ll threaten to call your employer and get you fired. They can be truly deceptive. Don’t buy into it.
Another strategy debt collectors often do is try to get you either fired up or fearful so they can manipulate you when your emotions are high. In this case, it’s best to just remain calm and don’t believe what they are telling you.
Pretend that you’re talking to a 3-year-old.
How To Deal With Debt Collectors
So this all begs the question, how should I deal with debt collectors? Well, it’s pretty simple and it’s important to keep in mind that the law is on your side. In other words, you have lots of protections. Debt collectors know this, but they just assume you don’t. In order to properly deal with debt collectors, the best technique is to remain absolutely calm and follow these guidelines:
Tell Them You Know Your Rights
Regardless of what a debt collector might tell you, you have a lot of rights when it comes to how a debt can be collected. In fact, by merely mentioning that you understand your rights will many times stop a debt collector in their tracks.
Your rights fall under The Fair Debt Collection Practices Act. This act declares the rules debt collectors must play by when they are attempting to collect a debt. Unfortunately, because so many people are unaware of their rights, collectors many times completely ignore these rules, breaking the law on a regular basis.
Therefore, it puts you in a good position when you tell the debt collector that you are aware of The Fair Collection Practices Act, and any violation will be documented. What are some of the most common violations?
Contacting consumers by telephone outside of the hours of 8:00 a.m. to 9:00 p.m. local time.
Failure to cease communication upon request.
Threatening arrest or legal action.
Abusive or profane language.
Don’t Allow Them To Provoke You
Playing with your emotions is one of the oldest tricks in the book when it comes to collecting a debt. Most commonly what we see is debt collectors will attempt to make you feel guilty. In other words, they’ll try to make you feel like a deadbeat. Don’t fall for this nonsense. It’s all an act.
If this doesn’t work, they’ll switch acts and attempt to make you so angry that you’d rather pay them, even if it means not making rent, than have to deal with them for another minute. Collectors are specifically trained that the fastest way to get a person to pay is to exhibit this behavior. If you keep this mind, these tactics will become transparent and ineffective
Always remain absolutely calm and cool, even professional, when talking to a debt collector. If it helps, laugh at them when they try to provoke your emotions.
Your Basic Needs Come First
As a general rule, you should never pay a debt collector if it puts your ability to pay for necessities in jeopardy. In other words, don’t pay a debt collector when you need that money for groceries. It’s just a foolish thing to do. Sadly, most debt collectors could care less.
More specifically, always make sure your rent/mortgage, groceries, utilities, and other necessities are taken care of before you even consider paying off an old debt. It’s simply not as important, regardless of what a debt collector might have you believe.
Verify The Amount They Are Collecting
Regardless of whether you receive a debt collection notice via a letter or a phone call, you need to make sure that the amount they are attempting to collect is accurate. There are several things you should be looking at before agreeing to make any payment.
Before you do anything else, you should send the collector a Debt Validation Letter. This letter is part of The Fair Debt Collection Practices Act, and basically allows you to request that the collector validate that not only is the debt yours, but that the amount they are attempting to collect is correct.
Another thing you should be looking out for is outlandish late fees or additional interest added to the original debt amount. Remember that in most cases you can negotiate to significantly reduce, or even eliminate these fees.
Debt Collectors Are More Willing To Negotiate On Older Debts
The next time a collector contacts you regarding a 10-year-old debt, don’t be afraid to offer them a debt settlement of pennies on the dollar. Many collection agencies purchase old debts from various companies after the company has written off the debt.
Therefore, even if the settlement amount may seem small, keep in mind that as long as the collection agency makes a return on their investment, they will be happy.
Agreements Should Be Made In Writing
Debt collectors are notorious for making false promises, reneging on agreements, and even clearing out people’s bank accounts. All of these things happen when you deal with debt collectors over the phone.
Protect yourself by never making agreements with debt collectors over the phone. Simply tell them to send you everything in writing and hang up. You can also use email, just as long as it’s not some kind of verbal agreement that can’t be proved in court.
Unless you have agreements in writing there is little you can do without getting a lawyer.