The first thing you have to realize is that a debt collector is a salesman. Debt collectors call to sell you on the idea of paying the delinquent account. Debt collectors are forbidden by the Fair Debt Collection Practices Act (FDCPA) to use deceptive practices to collect on an account, but don’t expect that to stop an underpaid collection agent from trying everything he can to get you to pay up so that he can get his commission check.
Your job is different; even if you don’t intend to pay a collection agent, you should get as much information as possible about them and the account they’re calling on.
This way, you can be sure the collector isn’t calling you when they’re really trying to reach someone else. Also, getting as much information as you can gets you equipped to take any of several courses of action — from requesting validation to launching a lawsuit.
Seven Questions You Need To Have Answered
Who are you?
This is the first question that you want to ask a debt collector. You want to know who they are and the name of the collection agency they represent.
You need to have the collection agency’s name for correspondence purposes if you intend to send them a letter at any point. It’s handy to Google a collection agency to get a sense of who you’re dealing with and how they work.
Needless to say, don’t believe every wild claim you read online about a collection agency, but do try to get as clear and well rounded a picture as you can.
Also, having the collection agent’s “name” — he’s almost certainly using an alias for protection — helps lend credibility to your records if a dispute arises that ends up going to court. If you make up infractions, you’re not likely to have correct information about who called and when. If you have that information, it makes it much more likely that not that you’re telling the truth.
Who are you trying to reach?
You need to know for sure that the debt collector is looking for you and not someone else. Sometimes, for legal reasons, debt collectors won’t identify themselves until they’re reasonably confident they have the correct person on the line. Usually, this happens when a collection agency has “collections” in their name and telling you who they are may result in an inadvertent disclosure of someone else’s collection issue.
At this stage, it should be reasonably obvious if they’re trying to reach you or reach someone else. If they’ve reached the wrong person by mistake, tell them so and they should go away. If they’re unreasonable, send them a letter explaining as much and demand they break contact.
What is this regarding?
You need to know what account has gone into collections. At this stage, you will get the original creditor’s name. This will help you because you can potentially reach out to the original creditor and make a deal with them instead of the collection agency.
What is the account number?
You need the debt collector’s account number. You’ll use this on virtually every piece of correspondence you send. You need to place the collection agency’s account number — which will differ from the original creditor’s account number — on every letter you send so that there is little chance of confusion on their part.
What is the debt amount?
Chances are the collection agent will be pushing you to pay before you can get a word in edge-wise. In any event, document the figure they give you and look for any significant discrepancies between what they say and what documents reflect. Debt collectors lie and sometimes have been known to fudge the debt amount to increase their commission.
When did this account become delinquent?
This is important! Some debt is too old to be collected on because it has exceeded the statute of limitations. Every state is different, so double check your state’s laws before sending a collection agency your payment.
Nothing prevents a collection agency from asking you to pay an expired debt, but they can’t successfully sue you for expired debt, either. If something is expired, or very close to expiration, think carefully before paying anything. Paying any amount may restart the statute of limitations depending upon the laws of your state.
What are you going to do if I don’t pay you?
This is a very important question! When you ask this, you’ll quickly get a sense of the character of the debt collection agent and the company he works for. This is absolutely essential information to have.
No, seriously, you need to know this, and here is why:
- If the debt collector says, “I’ll call you back until you pay up,” or anything of the sort, then you know that the debt collection agency is likely honorable. They’re not making empty threats; they’re just trying to do their job and collect on your account.
- If you hear empty bluster like, “I’ll write you down for refusal to pay” — which means nothing because the original creditor has figured out by this point that you’re probably not going to pay — then you know something else. You know that the debt collector is trying hard to get paid but isn’t really crossing the line.
- But… if you hear vague legal threats like, “I’ll have to refer your account out to our firm for review,” then you know you’ve got someone who is willing to lie and violate the FDCPA in order to collect from you.
- If you hear over the top threats of violence, threats of involving law enforcement, or threats of a legal nature, you might be dealing with a scammer.
This isn’t an exhaustive list, but getting a feel for the character and temperament of the collection agent and the agency he works for is important. Don’t let empty threats drive you crazy, but do pay attention to your gut and do what your gut tells you.
Other Useful Information
The above information is very critical to wrapping your head around which accounts you’re being contacted for and why. Without the answers to those seven questions, it’s likely you won’t be able to do so much as write the debt collector and effectively challenge the debt. Knowledge really is power, even when you’re on the receiving end of a collection situation.
There are other less crucial bits of information that are nice to have:
What’s your company’s mailing address?
You need this in order to write the debt collector. He should be able to tell you more or less off the top of his head what the mailing address is. Even if you forget to ask, as long as you have the correct spelling of the company’s name, it’s likely you can just Google the collection agency’s name and come up with their mailing address. So this bit of information is less critical than it used to be.
Do you have the original creditor’s account number?
The collection agent should be able to give you this information right over the phone. In practice, he’ll likely stonewall, stall, or redirect the conversation elsewhere. With the original creditor’s account number, it’s a lot easier to call the original creditor up seeking information.
Why? Because he wants to get paid, and he only gets paid if you pay him. He likely gets nothing if the original creditor accepts payment for the delinquent account.
If the collector won’t give you this information, it’s not a big deal. If you ever write in requesting debt validation, the collection agency will likely provide you with a copy of the original invoice.
Be careful, however*; some unethical collection agencies will provide a simulated invoice based upon “your most recent billing information.” In other words, the collection agency just takes the numbers they have on file and prints it out on a piece of paper that only looks like an original invoice but isn’t. Don’t fall for that crap.
Do you have the original creditor’s contact information?
This is also nice to have, because you can just call up the original creditor right after you end the call with the collection agent to try to sort out the billing issue. The collection agent may stonewall here as well, even though he likely has the information.
Once you have the original creditor’s name, it’s likely you can just Google them and call their billing department in an effort to sort things out. You don’t need the collection agent’s assistance, but it’s nice if he just gives you the information when you ask.
Lies You Might Be Told
Collection agents are like used car salesmen: they’ll lie like hell if they think they’ll get paid. Be prepared for these lies going into the conversation and don’t fall for them…
You Have To Pay Me and Only Me, Right Now
This is likely to be the essence of what you hear from the debt collector practically as soon as he establishes your identity. Debt collectors are trained to be tenacious in their attempts to collect on debt.
Don’t knuckle under right away and pay it, no matter how aggressive the debt collector becomes. Everything the debt collector says is suspect: he has a financial incentive to get you to pay up — not to help you sort out a billing error.
The Original Creditor Can’t Help You
You can, of course, follow up with the original creditor. The bill collector is going to try to convince you that this is no longer an option. Why? Because if you pay the original creditor, he won’t get paid.
If you reach out to the original creditor, you might sort out a genuine billing error. Even if there isn’t a billing error, you may find that the original creditor is willing to pull your account back from collections, which will remove the account’s stain from your credit.
You have more options than the debt collector wants you to think you have.
Paying Off Your Debt “May” Increase Your Credit Score
Collections and other high pressure sales rely on the “carrot and stick” approach. Humans love to embrace pleasure and avoid pain. Consumers know that charge-offs and delinquencies harm their credit, but most are naïve about how credit actually works. In fairness, modern consumer credit can be a complex issue.
Debt collectors want consumers to pay up. They know full well that, if a consumer pays on their debt, it will not raise their credit score. But consumers want to believe that, by paying off delinquencies, they’re going to repair their credit quickly.
Paying off a delinquent collection account will not raise your credit score. Open collection accounts are less and less important as they age. Eventually, they will “fall off” your credit report on their own. There are strategies you can use to accelerate this process — but just paying on your delinquent accounts won’t do it.
Pay Up, Or We’ll Sue You and Garnish Your Wages
Some debt collectors are just bullies. Don’t fall for legal threats from a debt collector. It’s true that some debt collectors are more “sue happy” than others — but they don’t advertise the fact; they just sue you when they’re good and ready.
Debt collectors who threaten or even imply legal threats are violating the Fair Debt Collection Practices Act (FDCPA), pure and simple. Log the infraction in a notebook with as much information as you can, and be prepared to show that to a consumer protection attorney.
I’ll Put You Down for Refusal to Pay
This is an oldie but a goodie. When you become delinquent on your account with the original creditor and don’t resolve the situation within six months, the debt collector has pretty much given up on ever seeing the money ever again. So debt collectors who say “I’ll put you down for refusal to pay” are just bluffing.
This is an effective tactic only for those who don’t understand accounting. Generally Accepted Accounting Principals (GAAP) requires that the original creditor write off the debt as noncollectable at no later than 180 days of delinquency.
Don’t fall for mind games.
We Don’t Have To Prove Anything; You Know You Owe The Debt
This would be hilarious if it weren’t for the fact that so many people fall for it. Everyone has the right to proof of a debt’s validity. Delinquent accounts are bought and sold as non-performing assets all the time. It is frequently unclear who the correct owner of the debt is.
When in doubt as to the validity or amount of a debt, always send a written request for validation to the collection agency. Don’t pay first and regret not asking questions later.