Owe money? Know your rights
Amid aggressive tactics, debtors advised to know rights
Published: Sunday, August 23, 2009 at 4:03 a.m.
Last Modified: Sunday, August 23, 2009 at 4:03 a.m.
As the current recession pushes more and more people on a collision course with debt collectors, many are unaware of their rights and vulnerable to manipulation, consumer advocates say.
Despite strong laws regulating the practices of debt collectors, few people are familiar with them, and some agents try to exploit that knowledge gap, says Joe Ridout, service manager with Consumer Action, a San Francisco based nonprofit.
"Collection agencies are counting on individuals not knowing their rights," Ridout says.
The federal Fair Debt Collection Practices Act is designed to protect consumers from harassment from debt collectors and collection attorneys, though not from companies collecting their own original debts.
Under the act, collection agents cannot:
Call people before 8 a.m. or after 9 p.m.
Misrepresent themselves.
Use threatening or obscene language.
Claim that debtors will be arrested or their property seized.
They can contact people at work or contact family members, but only for the purposes of locating the person, Ridout said.
This is one area where many collectors cross the line, repeatedly calling people at work or family members in an effort to embarrass them into paying, Ridout said.
"That's a tactic of intimidation, of essentially browbeating the debtor in an unlawful way to induce them into paying a debt they may not even owe," he said.
The first thing anyone who feels they are being harassed by a collections agent should do is to stay off the phone. All communication should be in writing, Ridout said.
Collectors have to respect your request, and the law allows fines of up to $1,000 per violation, he said.
Demanding proof of the debt is also one of the first steps anyone contacted by a debt collector should take, Ridout said. This should be done within 30 days, he said.
Once it is clear the debt is valid, people who can pay it off should, said Jeannine Moore, spokeswoman for the Consumer Credit Counseling Service, with offices in Santa Rosa.
The nonprofit group has seen a significant increase in the past 18 months of people seeking counseling for their financial troubles, many facing mounting credit card debt.
"It's important to be aware of your rights, but also of your responsibilities," Moore said.
But the majority of people who have been sent to collections don't have the money to repay the debt, and need to make careful decisions about how they go about repaying it, she said.
"You have to keep the lights on," she said.
You also have some leverage, Ridout said.
Most debt collectors know that people are under financial stress and are hard-pressed to make payments. This makes many willing to negotiate with debtors in exchange for payment, Ridout said.
"The good news is you can settle debt for a lot less than what you owe," Ridout said.
You can reach Staff Writer Kevin McCallum at 521-5207 or kevin.mccallum@
pressdemocrat.com.
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