Debt Collectors

Ledger entry stamped overdueThis is a general guide for consumers and is not intended as legal advice.

Are you behind in your bills?  Or have you been confused with someone else who is delinquent in his or her bills?  If so, you may be receiving telephone calls demanding that you pay a debt.  While debt collectors are not prohibited from making reasonable attempts to collect legitimate debts or from suing you, consumer protection laws do prohibit deceptive and unfair debt collection practices and protect you from harassment, abuse and invasion of privacy.  You may be asking these common questions about your situation.

What should I do if I’m having financial problems?
There is nothing to be ashamed about if you are experiencing difficulties meeting all your financial obligations.  Since delinquent debts can mushroom into a big problem, it helps to act quickly.  If you have difficulty paying a debt, you should consider contacting the creditor, explaining the circumstances, and offering to work out a payment plan.  Sometimes the creditor will refinance or otherwise modify the agreement to give you a chance to catch up.

Remember, it is to the creditor's advantage to avoid bringing in a debt collection agency.  However, if it begins to look as if you will not be able to pay the debt within a reasonable amount of time, the creditor may sell the debt to a debt collection agency for less than the face value of the debt.   The creditor is not required to let you know it is referring or selling your account to a debt collection agency.  Once the collection agency is involved, they will try to collect the debt, up to the full amount, from you.

Who is a debt collector?
Under the federal Fair Debt Collection Practices Act (FDCPA), a debt collector is any person who regularly collects debts owed to others.  This includes attorneys who collect debts, as well as collection agencies and other companies that collect debts for other businesses.  The FDCPA does not apply to a creditor collecting its own past-due accounts.

What kinds of debts are covered under this law?
Personal, family and household debts are covered under the FDCPA.  This includes money owed for medical care, charge accounts, credit cards and car loans.  Business debts are not covered by the FDCPA.

How is a debt collector allowed to contact me?
A debt collector may contact you directly in person, or indirectly, such as by mail, telephone, telegram, e-mail or fax.

Without your express permission or permission granted through a court order, a debt collector may not:

  • contact you at unreasonable places or times (such as before 8:00 a.m. or after 9:00 p.m. local time);
  • contact you at work if they know your employer disapproves of personal calls; or
  • contact you when the debt collector is aware you are represented by an attorney.

Can a debt collector contact others about me or my debt?
If you have an attorney, the FDCPA prohibits a debt collector from contacting anyone other than your attorney.  If you do not have an attorney, the debt collector may contact other people, but only for the purpose of finding out where you live or work.  However, the collector cannot tell these people or anyone else (including your employer) that you owe money.  When contacting someone other than the person who owes the debt, the collector must give his or her own name but is not allowed to state the name of the collection agency unless specifically asked for it.

A debt collector may discuss the alleged debt with your spouse, your parents or guardian if you are under the age of eighteen, the executor of your estate, or any cosigner on the account or loan.

What practices are debt collectors prohibited from using?
Harassing or abusive tactics.  Debt collectors may not:

  • use or threaten to use violence or criminal means to harm you, your reputation or your property;
  • use obscene or profane language;
  • advertise that you owe a debt;
  • advertise your debt for sale;
  • telephone you, or cause a telephone to ring, repeatedly or continuously with the intent to annoy or harass; or
  • place telephone calls without meaningful disclosures of their identity.

False or misleading representations.  Debt collectors may not misrepresent the truth.  A debt collector cannot pretend to be anyone except a debt collector.  The collector must tell the person who allegedly owes the debt that the debt collector is trying to collect the debt and may not deceive you by:

  • using a false company or creditor name;
  • implying the communication is from anyone other than a debt collector;
  • misrepresenting the amount of the debt;
  • threatening to disseminate false credit information about you;
  • representing falsely that they are government representatives;
  • threatening legal action that is illegal or that they do not intend to take;
  • representing falsely that you have committed a crime or that you will be arrested or imprisoned;
  • implying falsely that the debt collector is employed by a credit bureau;
  • implying falsely that they are attorneys or that an attorney is involved in the collection of the debt;
  • indicating falsely the legal status of papers or forms sent to you;
  • using any words or symbols in their notices to make the person who allegedly owes the debt think the notices are legal documents when they are not; or
  • sending you something that resembles an official document from a court or governmental agency.

Other prohibited unfair practices.  Debt collection agencies may not:

  • collect an amount greater than what you owe;
  • deposit a postdated check prior to the date on the check;
  • communicate with you about a debt by postcard;
  • use envelopes that reveal information indicating that the sender is a debt-collection agency;
  • cause you to incur a communication expense, such as a collect telephone call charge, telegram fee, wire fee, or other similar charge, through the concealment of the true purpose of the communication; or
  • garnish your wages or take your home or possessions without a court judgment.  (An exception exists for federally guaranteed student loans that are in default.)

What information must a debt collector provide me?
Within five days after the first time a debt collector contacts you by phone or in writing, the debt collector must send in writing a notice telling you:

  • the amount of money you owe;
  • the name of the original creditor with whom you incurred the debt;
  • that unless you dispute the validity of the debt, or any part of the debt, within 30 days of the date you receive the notice, the debt will be assumed to be valid;
  • that if you notify the debt collector in writing that you dispute all or part of the debt within those 30 days, the debt collector must mail you a copy of a verification that you owe the debt; and
  • that the debt collector will provide you the name and address of the original creditor, if different from the current creditor and if you so request.

What do I do when the debt collector calls me?
Getting calls from a debt collector can be stressful.  Remember that the collection of a debt is a business transaction.  Don’t take it personally, and keep conversations on a business level.  Make a record of your conversations with the debt collector.  Think before avoiding contact with a debt collector, as this may only cause increased or more aggressive collection efforts.

If you owe the debt but do not have money available to pay it, ask the debt collector if you can work out a payment plan.  Be honest about what you can afford to pay.  If the agency does agree to a new payment plan, get it in writing.

Can I stop a debt collector from contacting me?
Yes.  If you want all debt collection contact to stop, and it is a debt collection agency rather than the original creditor who is contacting you, you have the right to request that they not contact you again.  This request must be in writing.  Make sure to include a statement that your letter is not meant in any way to acknowledge that you owe this or any other sum of money.

Mail your letter certified, requesting a return receipt so that you have proof of its delivery.  Once the agency receives your letter, its employees can only contact you one more time to explain what action they plan to take.  After that, contact must stop.

You can also request that a collection agency not call you at your place of work.  Send the same type of letter discussed above and instruct the debt collector to refrain from contacting you at work.  By law, the debt collector must comply.

Remember, though, stopping the contact does not stop the debt-collection activities.  The debt collector can still send negative information to the credit-reporting agencies, sue you in court, and garnish your wages or file a lien against your property once a judgment is issued by the court.

What if I want to dispute the debt?
If you do not owe the debt, or if the debt has already been paid, send the debt collector a written statement that you dispute the entire debt or a portion thereof.  Since a debt collector is required to verify the debt by producing information that is responsive to your request , you should give enough information to the debt collector in your dispute letter for the company to research each issue being disputed.  If appropriate, include copies of receipts, cancelled checks and any other information to back up your claim.  Make sure to include a statement that your letter is not meant in any way to acknowledge that you owe this or any other sum of money.

You must send your letter within 30 days from your receipt of written notice from the debt collector.  The debt collector is not required by law to cease collection efforts if you merely call the collector about your dispute.

Send your complaint to the collection agency by certified mail, return receipt requested, and keep a copy of your correspondence to them.  Once the agency receives your dispute letter, they must stop further attempts to collect the debt until they send you written verification to show that you do owe the bill and that the amount of the bill is correct.

If you are questioning only a part of the bill, the debt collector may not continue to collect on that part until having verified it to you.  Since you would still be liable for the rest of the bill, you should consider making arrangements to pay the undisputed part.

If you fail to dispute the validity of the debt, or any portion of the debt, within the 30 days, the debt collector is entitled to assume the debt is valid and to proceed with collection activities.  However, a court may not construe your failure to dispute the debt within the 30-day time frame as an admission of liability for the debt.

What if I am not the person who owes the debt?
If you are not the person the collection agency is looking for, write the dispute letter mentioned above and explain the debt collector’s mistake.  If you are unsure about your legal responsibility for a debt, check with an attorney.  If the collection agency is unable to obtain verification that you owe the debt, they may return your account to the creditor and stop collection efforts.  The agency is not required to notify you if they do this.  If the agency does return your account to the creditor, it may be assigned to another agency for collection.

Is the process the same if I owe multiple debts?
If the same debt collector is attempting to collect multiple debts from you, the debt collector must provide a separate notice for each debt.  You must dispute each debt separately, and the collector must provide separate validation information for each one.

Can I enter into a repayment plan with the debt collector?
You may request that the debt collector agree to a payment plan allowing periodic and scheduled payments until the bill is paid in full.  Make your request in writing and keep a copy of the request for your records.  Although the debt collector is not required to accept a payment agreement, many collectors will try to make arrangements if you fully explain your situation.

Neither you nor the debt collector is required to sign a written contract, but either of you may ask the other to sign.  If there is no written contract, and the collection agency doesn't want to sign one, you may protect yourself by writing them a letter (sent certified mail, return receipt requested) stating the terms you have agreed upon and enclosing your first payment.  Tell them in your letter that if they don't agree with the terms you have described there, they should write back to you telling you what they do agree to accept.  Keep a copy of your letter and any payment agreement that you sign.

However, never agree to pay more than you can afford just to get the debt collector to stop calling you.  If you make an arrangement with the debt collector and then fail to make the payments, the agency may cancel the agreement, demand payment in full and possibly even sue you for the full remaining amount.

What happens if I miss a payment under an agreement?
If possible, contact the debt collector before you miss a payment or before you send a partial payment.  Explain the problem and what you plan to do to solve it and catch up on your payments.  Many collection agencies will work with you, especially if you have already made several payments on time.

Can the debt collector require a postdated check from me?
There is no law preventing a debt collector from requesting or accepting a postdated check; however, a few restrictions may apply.  The debt collector is prohibited from soliciting you to provide a postdated check “for the purpose of threatening or instituting criminal prosecution."

If you give a debt collector a postdated check, under the FDCPA the check cannot be deposited before the date written on it.  And if you give the debt collector a check with the date more than five days in the future, the collector must notify you before depositing the check.

Can I be charged extra fees?
To determine whether the debt collector is permitted to add additional charges onto your debt, consult your original contract.  If you agreed to pay "collection costs," the debt collector can add reasonable charges such as attorney fees, court costs or credit reports.  If the agency is collecting on a bad check, it can add collection and legal fees as allowed by state law.  Your attorney should be able to tell you how much the agency can legally charge you.  You are also entitled to an explanation from the collection agency as to how much they are charging you and why.  You should ask them by letter to explain to you in writing.

What if a disputed debt appears on my credit report?
Some debt collectors do supply information on bills they are collecting to credit-reporting agencies such as Experian, Equifax or TransUnion.  However, a collection agency cannot threaten to do this unless they are a customer of the reporting agency and actually intend to report your debt.  Also, the collection agency must tell the reporting agency whether any dispute has been filed at the time they report your debt, and they must update your record to show when the debt is paid.

If you wish to notify the credit-reporting agencies that you dispute the debt, request a copy of your credit report and follow the procedures for disputing reported information.  You are entitled to one free credit report per year from each credit-reporting agency under federal law, and two free credit reports per year from each credit-reporting agency under Georgia law.  To receive this free report, you must go to a single central source, www.annualcreditreport.com (where you can view an online copy), or call the central request line, 877-322-8228.  If you prefer, you may also go to the Federal Trade Commission (FTC) web site and print out an Annual Credit Report Request Form, to be completed and mailed to this address:

Annual Credit Report Request Service
P.O. Box 105281
Atlanta, Georgia 30348-5281

How can I file a complaint against a debt collector?
If you believe, after reading this information and notifying the debt collector in writing as indicated, that your rights have been violated by a debt collector, you may file a complaint with our office, the Governor’s Office of Consumer Protection, provided that the debt collector is not an attorney.  If the information you provide indicates that the debt collector has violated the law, we may contact the collection agency and try to find a solution to your problem.  However, some types of complaints (such as telephone threats or the use of abusive language by collectors) are very difficult to prove.  Please also remember that, even if the debt collector violates the FDCPA, that does not erase any legitimate debt you owe.  

You should also file a complaint with the FTC, the federal agency that enforces the Fair Debt Collection Practices Act.  You can contact the FTC online at www.ftc.gov, by phone at 877-FTC-HELP, or by mail at:

Consumer Response Center
Federal Trade Commission
Washington, DC 20580-0001

To file a complaint against a debt collector who is an attorney, contact the State Bar Association. 

Can I sue the debt collector through a private attorney?
Yes.  Under the FDCPA, you have the right to sue a debt collector in state or federal court within one year from the date of the violation.  If you win, you may recover damages in the amount of any losses you suffered as a result of the violation, plus an additional amount of up to $1,000.00.  You may also be able to recover court costs and attorney fees. 

What else do I need to know about my rights?
If all of the above information does not sufficiently address your questions, we suggest you consult a private attorney.  An attorney would directly represent your interests and is the one whose advice would be most helpful to you.  You should inquire with the State Bar of Georgia if you need information on locating a private attorney or a Georgia Legal Services Program office for advice or representation in a FDCPA lawsuit.