Every year, new headlines highlight how some third-party and in-house debt collectors violate federal law by using unfair and abusive debt collection practices. To help consumers avoid frustration and confusion when a debt collector calls, Better Business Bureau (BBB) provides a summary of consumers’ rights under the Fair Debt Collection Practices Act (FDCPA) and offers information on how to report abuse.
Last year, the Federal Trade Commission (FTC) received 180,928 complaints relating to debt collection, up from 144,159 in 2010. More than once, the FTC has reached million-dollar settlements with collection service companies over accusations relating to federal law violations. Locally, BBB Serving Central, Northern and Western Arizona processed 325 complaints against collection agencies in 2011.
“Inaccurately reporting credit information and pressing consumers to pay debts they often do not owe are common complaints reported to BBB,” said Dory Gosar, BBB Trade Practices and Investigations Manager. “For this reason, it is important for consumers to have a general understanding of their rights in case a debt collector calls.”
To help consumers understand their rights under the FDCPA, BBB provides the following summary:
● Right to Notice of Debt: By law, a debt collection agency must provide you with a validation notice within five days of first contacting you about the debt. The validation notice should include the amount of the debt, the name of the creditor, and information on what you can do if you think there has been a mistake or you don’t actually owe the money. In some cases, information included in a validation notice can be provided over the phone during initial contact. If you wish to review the information in writing, you must request a written validation notice.
● Right to Dispute the Debt: You have 30 days after receiving the written notice of debt to dispute its contents. If you believe the debt is not yours, send a written dispute to the collection agency. Collection agencies must stop all debt collection activities until they can verify the debt.
● Right to Verify Debt: At a minimum, verification should include the amount, date, name and contact information of the original creditor. If you are disputing debt based on identity theft, verification should include a copy of the original signed contract or note. If you are disputing the amount of the debt, verification should include payments made, as well as interest and fees charged and/or waived.
Once consumers have gone through the initial steps outlined above to verify the debt, it is important to confirm the debt collector is legitimate. Consumers can research a company with BBB at www.bbb.org.
Consumers who do not owe the debt can ask the collection company to stop contact by sending a letter (via certified mail) to the debt collector. Keeping a copy of the letter and the return receipt for verification purposes is also recommended. Any further contact from the debt collector, except to advise there will be no further contact or to inform that the agency is filing legal action, is a violation of the FDCPA.
If a debt collector violates the law, consumers can report them to the FTC at www.ftc.gov, and also file a complaint with BBB at www.bbb.org. For more information on taking control of your debt and managing credit effectively, check out BBB’s Managing Credit – Made Simpler.
About BBB Serving Central, Northern & Western Arizona
BBB is an unbiased organization that sets and upholds high standards for fair and honest business behavior. Businesses that earn BBB accreditation contractually agree and adhere to the organization’s high standards of ethical business behavior. Incorporated locally in 1938, today your BBB serves communities in Central, Northern and Western Arizona, supported by over 9,600 BBB Accredited Businesses. BBB provides objective advice, free business BBB Business ReviewsTM and charity BBB Wise Giving ReportsTM, and educational information on topics affecting marketplace trust.