What to Do and What Not to Do When You are Contacted by a Debt Collector

Debt collectors prey on consumers who do not know their rights and who do not know how to handle calls from debt collectors. This article gives just a few short and simple tips for handling debt collector calls, since these are becoming ever more common as the market for “junk debt” booms among unscrupulous investors.

DO’S
The following is a short list of things you should do and must do when contacted by a debt collector:

DO insist that the person calling you to give their name (their real name, since career debt collectors usually use an alias when doing debt collecting);

DO find out very specifically the address from which the debt collector is calling you;

DO advise the debt collector that you will be recording the current call and all future calls;

DO keep a journal, or log, of the date and time of all debt collector calls along with the person to whom you spoke and the full contents of the discussion, particularly including the full contents of any threats;

DO insist that the debt collector send you, in writing, a confirmation of any factual statements or representations made during the phone calls, and also record any factual statements or representations in your journal;

DO get as much detail about the debt as the debt collector will give you: original creditor, principal sum of debt, interest on debt, any fees or penalties being added by the debt collector;

DO tape-record the call and all future calls from the debt collector, but only after you have advised the debt collector that you will be tape-recording the calls and captured your own voice on tape stating that you would be tape-recording all calls;

DO make copies of all tape-recorded calls or voicemails onto CD or similar storage medium, and keep these in a safe place, as these will be invaluable in the event of a lawsuit against the debt collector;

DO write a debt validation letter after you receive the debt collector’s first correspondence, and specifically request the complete back-up documentation from the original creditor about the debt, including your original, signed contract with the original creditor and the original creditor’s payment or account history for the debt (debt collectors will usually reply with their own short-hand computer print-out about the debt, which really tells you nothing about the debt);

DO include in your debt validation letter a statement that you will be tape-recording all future telephone calls from the debt collector;

DO send the debt validation letter, and all correspondence to the debt collector, via certified mail, return receipt requested, and keep a file with all of the mail receipts to show that your letters were accepted and received by the debt collector;

DO advise the debt collector, both in your phone calls (with your voice recorded) and in your letters that you positively do not consent to having your friends or family or employer contacted in any way;

DO advise your friends and family of the debt collector’s efforts to contact you, and that you would want your family and friends to keep a record of all calls or contacts, as well as statements made, by the debt collector to them;

DO discuss with your employer, only if necessary and in your best judgment, that a debt collector may contact them and you have not consented to the debt collector contacting the employer;

DO dispute any false or inaccurate credit reporting about the debt with the credit bureaus. (Go to www.socalcreditdamage.com for a sample dispute letter to the bureaus.) Remember that you want to dispute any false or inaccurate credit information. If you positively do not owe the debt, then the very existence of the debt in your name is false and inaccurate. However, there are many other instances of false or inaccurate credit reporting: wrong amount of debt; wrong date of default or delinquency; wrong characterization of debt, e.g. “30-day late delinquency” being reported as a “foreclosure” or a “repossession”; etc.

DON’TS
Now that we’ve visited a few of the “do’s”, it’s also time for a few “don’ts”.

DON’T agree to pay on the first phone call. Debt collectors receive special training to try to talk debtors into paying with a credit card or a check-by-phone on the very first phone call. You always want to digest the information from the debt collector before agreeing to any payment of the debt. Remember: you may not owe the debt, or the debt collector may have inflated the debt with bogus fees and penalties not found in your original contract. That’s one reason you want the original creditor’s contract, so you can see if you really are obligated for anything beyond interest. A lot of the time, the interest will be the only penalty you have ever actually agreed upon, so you do not want to overpay the debt collector;

DON’T ever consent to permit the debt collector to contact your employer or your family and friends;

DON’T ever provide the debt collector with any of your personal employment or financial situation, even if they ask, i.e. do not tell them where you bank, where you work or any other details of your personal financial or employment information;

DON’T believe a debt collector if he or she tells you that you are about to be arrested or subjected to other criminal-type treatment;

DON’T believe a debt collector if he or she states that she is from a law enforcement agency;

DON’T hesitate to end the phone call when YOU want to end the phone call—the debt collector will try to keep you on the line as long as possible;

DON’T return debt collector calls—better practice is to do everything in writing;

DON’T forget to tell your friends to buy and read Robert F. Brennan’s new e-book for California consumers, “Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights.” The link for purchasing the e-book is below. It gives a full account of your rights as a consumer faced with debt collectors, and includes useful forms and checklists for preserving your rights and dealing with debt collectors on even ground.