What Debt Collectors Can't Do

One business is going strong in this flagging economy: debt collection.

And with a growing number of collectors chasing down debtors, complaints are also rising about how debts are being collected.

The Better Business Bureau expects the number of complaints to rise once 2007 figures are calculated. The trend has been upward in the past few years. In 2006, complaints about debt collectors were up 21 percent from the previous year, according to Edward Johnson, president and chief executive of the Better Business Bureau in the District.

"With the current state of the U.S. economy, we are forecasting an all-time high in the number of complaints against the industry," Johnson said.

The Federal Trade Commission said it received 69,204 debt collection complaints in 2006, more than the agency received against any other industry.

After reviewing some recent consumer complaints, Johnson said people have been upset that collectors were contacting neighbors, friends and employers, and making disparaging remarks in an effort to shame the debtors into paying up. "Consumers should accept responsibility for their debts," Johnson said. "However, they do not have to accept abusive collection tactics. They need to know their rights."

Under the Fair Debt Collection Practices Act, debt collectors are required to treat you fairly and are prohibited from using certain methods.

A federal court recently entered a final order against a Florida debt collection agency that used misleading dunning letters and abusive telephone calls to falsely suggest that consumers would be sued, their property seized and their wages garnished if they did not pay what the company said they owed. The collectors were accused of shouting and using abusive language.

The case was brought by the FTC, which held that the company had violated the Fair Debt Collection Practices Act. The act applies to those who collect on personal, family and household debts, including car loans, mortgages, charge accounts, and money owed for medical bills.

Here are some of your rights as outlined by the Better Business Bureau:

¿ Debt collectors may not contact you at unreasonable times or places unless you agree, or at work if you tell them that your employer disapproves. That means no calls before 8 a.m. or after 9 p.m.

¿ Collectors generally cannot contact you after you write a letter to the collection agency telling it to stop. The agency may still inform you if the debt collector or creditor intends to take some specific action. And by the way, this letter does not absolve you from the debt if you actually owe it. You could still be sued by the collector or the original creditor.