A debt collector trying to collect a consumer debt has just contacted you by letter or telephone. You think you may owe the debt. O.K. Should you just pay it? What if you can't? What if it's not yours? What if the collector violated your rights? What should you do?
These are questions I receive from many consumers who allegedly owe consumer debt. I believe that less than 1% of consumers sadly even bother to check the authoritative sources available on the internet let alone consult with an attorney before putting the unpleasant matter in the back of their minds and hope for the best. That’s a bad move.
If you are a consumer who allegedly owes consumer debt, i.e., debt of a personal, family, or household purpose, and not commercial or business debt (not even small business), you have a limited amount of time to exercise your powerful consumer rights. When the debt collector first contacts you, you only have a limited 30 days under federal law to obtain verification of the debt.
Let’s take two examples:
I. You Receive Your First Dunning (Collection) Letter Demanding Payment.
The first letter received by you should contain important disclosures in it:
A. This is an attempt to collect a debt and that any information obtained will be used for that purpose. (This is known in the debt collection world as the “mini-Miranda” warning.)
B. The amount of the debt and the name of the creditor to whom the debt is owed.
C. A statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.
D. A statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.
E. A statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.
F. In subsequent letters, a debt collector need only state “This is a communication from a debt collector” or words to that effect.
These are important disclosures of your rights under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692, et seq. If you choose not to exercise your “thirty-day” rights under the FDCPA, you may have set yourself up for immediate action against you. You have also painted a “bull’s eye” on your back and unwittingly told the debt collector that you don’t care about your rights. So what should you do with your first dunning letter? SEND A DISPUTE LETTER TO THE COLLECTOR! EXERCISE YOUR RIGHTS!
What should it say? Well, there are many examples of letters to send to a debt collector on the internet. Most are garbage and not helpful and some are even hurtful and can make your situation worse. Here’s what a consumer might write after consulting with an attorney:
[Debt Collector’s Address]
[If sending by Certified or Delivery Confirmation: the 20-digit number]
[Creditor's or debt collector's account number.]
Dear Sir or Madam:
I received your dunning letter dated [date] on or about [date]. I am mailing you this dispute letter within 30 days of receiving your dunning letter pursuant to the Fair Debt Collection Practices Act (FDCPA).
Please be advised that I dispute the debt pursuant to the FDCPA. I demand verification of the debt pursuant to the FDCPA. I also demand the name and address of the original creditor. If you have reported this debt to a third party, advise it that I dispute the debt pursuant to the FDCPA. I demand that it be reinvestigated pursuant to the Fair Credit Reporting Act.
Do not contact me again until you have provided verification of the disputed debt. At that time and thereafter, you may only contact me by mail.
Very truly yours,
You must make a copy of the letter. Keep it with the debt collection letter and with your proof of delivery. You should send it one of the three following ways.
1) Mail the letter via CERTIFIED/RETURN RECEIPT REQUESTED, or
2) Fax the letter WITH FAX RECEIPT CONFIRMATION and mail the letter via FIRST CLASS, or
3) Mail the letter via PRIORITY MAIL with DELIVERY CONFIRMATION.
I know it costs money, but it is well worth the expense.
If the debt collector contacts you again without providing verification, notify a consumer rights attorney immediately. See the end of this post for more information.
II. You Receive Your First Dunning (Collection) Call Demanding Payment.
These types of contacts are harder to control because you are dealing with a person whose job is to wrench money out of your pocket. Here’s how to play it safe and keep it cool:
Before asking you any questions (other than maybe your name and address), a debt collector must say the following if it is your first oral contact (and there are no letters):
This is an attempt to collect a debt and any information obtained will be used for that purpose. (This is known in the debt collection world as the “mini-Miranda” warning.)
If this is the debt collector’s second or more oral contact of you OR if you have already received a dunning letter from the debt collector, he or she must state:
“This is a communication from a debt collector” or words to that effect.
The debt collector is apt to ask your name, address, and probably your social security number. Provide the first two and not the last one. You do not have to provide a social security number. Once you have determined that a debt collector is calling, try to find out the following POLITELY:
What is the collector’s name?
What company is he or she calling from?
What is the company’s address?
What is the name of the original creditor?
What is the account number?
How much is allegedly owed?
When was the last payment on the debt made?
What does the collector intend to do if you cannot or won’t pay the debt? [Don’t be afraid of the answer.]
State that you dispute the debt.
Demand verification of the debt.
Ask not to be contacted again until the debt is verified.
Disconnect the call.
TAKE GOOD NOTES DURING YOUR CALL, NOTING WHO SAID WHAT, THE DATE, AND THE TIME.
During the entire call, the debt collector will avoid "losing control" by letting you ask a series of questions. His or her job is to get you to commit to making a payment. Just be patient and firm, but polite. NEVER acknowledge the debt. Never make a promise to pay. NEVER state that the debt is yours. Simply state in response to questions that would elicit these responses that you will not acknowledge or pay this debt until you have been provided with a written letter and written verification of the debt's validity.
ALSO, NEVER GIVE YOUR BANKING INFORMATION OVER THE PHONE. NEVER. If the debt collector waited this long for payment, he can wait a little longer to receive a money order or cashier's check in the mail. Consider avoiding the use of a personal check to pay: this is how they get your banking account numbers.
Do not be intimidated by "TODAY ONLY" or "THIS WEEK ONLY" DEALS. If an offer is being made today, it is likely to be accepted months from now AFTER you have received verification of the debt in the mail. Don't be a sucker. No offer being made is worth you giving up your banking information.
Send the letter above at once.
If any of your FDCPA rights were violated or if you want to find out if your rights were violated, visit www.ConsumerLitigators.com for a free, no obligation case evaluation by one of our experienced consumer rights attorneys. For the overwhelming majority of consumers, there is no out-of-pocket or upfront attorney’s fees or costs to them.