Posts Tagged ‘debt collectors’

Using the Cease & Desist Letter: Know the Facts

May 18th, 2010

CEASE AND DESIST LETTER FOR STOPPING DEBT COLLECTORS
When and when not to use a cease and desist order for debts

This article is one of our most popular from the credit library. You can view the related resources linked within which are located on the main web site.

If a debt collector claims you owe them money, you are allowed by law the cease the debt collector from further contacting you. Many people misuse a cease and desist letter and believe that once they send it, the collection agency may never contact them again. This is not true. Not only can the debt collector contact you one last time to advise you of their intent, if any, but they can still sue you. Using a cease and desist letter can be very useful but it doesn’t solve all collection issues.

If you don’t owe the debt then using a cease and desist letter will be affective, however if you owe the money, the debt collector can still come after you via lawsuit. Here are the steps you should take when implementing a cease and desist order to a collection agency.

Top priority. Do you owe the debt?
If you feel the debt is not yours or is expired legally under the SOL- statute of limitations, then the cease and desist letter will be very affective. If the debt collector receives the letter from you stating that the debt is legally expired and to cease all communications then you probably wont hear from them again. The collector isn’t going to waste time going after you if they know you know the debt is expired. Pouring good money after bad isn’t their aim. If they continue to contact you after you have sent the cease and desist letter then you could bring damages upon them for harassment.

What law allows a cease and desist order to a collector?
The Fair Debt Collection Act – FDCPA protects you from being harassed from a collection agency. If a collection agency violates the FDCPA they can be sued. Additionally you may report them to your Attorney General, the FTC and the Better Business Bureau. Basically, you can make it very hard on them for a violation but just be sure you have a case. You may collect up to 1,000.00 for damages.

When a cease and desist letter is not appropriate
If a debt collector is sending you a bill and its an accurate bill, your cease and desist letter probably wont do much. Sure, they may leave you alone for a month while they gather evidence of the debt, but chances are pretty good that they haven’t gone anywhere. If the debt is accurate and you do owe it, your best option would be to try and settle the debt for pennies on the dollar and an improved credit rating. Collection agencies are in this business to make a buck, so you’d be surprised how often they DO settle debts for less and promise to remove the item from your credit reports as well. They want money pure and simple. If you do work with a collector on settling the debt, be sure everything is done in writing and sent certified mail. If you agree to pay the debt and they agree to accept less, then they should have no problem putting it in writing for you. If they refuse, chances are they will not abide by their promise to remove the debt from your credit reports.

The Validation of Debt angle
Before you assume the debt is valid and pay it, be sure it is. Hundreds of thousands of debts are sold everyday but that doesn’t mean its a legitimate debt. Before you pay a dime, be sure to check that the debt is valid. Decide if the balance is accurate as well as any applied fees or collection expenses. If the debt collector cannot prove the debt is valid then you have a good case for ceasing and desisting them from further contact. If they cant prove to you the debt is valid then they certainly wont be able to prove it to a judge in small claims court.

Related Help for Collection Agency Issues

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Will paying off a debt remove it from my credit reports

November 2nd, 2009

money- troublesWell that depends on you. Yes you. If you have a debt in collections and you’ve decided to pay it off because someone advised you to do so- perhaps a mortgage lender, then you’d be surprised to know that that may be a very bad idea.

If an account has been placed on your credit reports that is negative such as a charge off, collection account or repossession, simply paying the balance will NOT improve your credit. Here’s why.

A bad account status like a charge off, collection account, repo, foreclosure etc is considered negative and as bad as it gets. The rating is commonly referred to as an R-9. To put this in perspective, an R-1 is a perfect credit rating. An R-9 is negative and unfortunately if you pay an R-9, its still an R-9. Its simply paid now, which has released you from financial liability but your credit reports are still left in ruin.

The best route to take is to NEGOTIATE THE RATING IN EXCHANGE FOR THE PAYOFF.  It’s done everyday- believe it or not. Sure an original creditor may not agree to these terms but a third party debt collector will. Most negative accounts past 180 days delinquent are sent to third party debt collectors. Once that process happens, you are in a better position as far as negotiations of the credit rating go.

A third party debt collector will often settle the account and delete the credit rating because all they are concerned with is getting paid. An original creditor will not approach a debt this way, but a bill collector will.

By getting the debt collector to agree to settle the debt for this exchange, you will gain something from the payoff as well.  Keep in mind there are a few instances where you will want to pay the debt off even if the collector refuses to improve your credit rating.

For example, a collector has absolutely refused to remove the rating, you’ve received validation that the debt is accurate and you need this account to show paid because either you are being forced to by a lender before they issue you a loan, or you want the collection agencies to leave you alone and are worried about being sued. This is when you need to pay the debt if negotiations have fallen through.

When dealing with a collection item you must always attempt to negotiate the rating before you pay a dime. Not doing so is a very bad financial move because chances are, you will get your way. Can you imagine having an item completely wiped away from your credit reports from just a little effort? It’s definitely worth your time.

Related to this story} Validating a debt, how to | Dealing with collection agencies | Sending a cease and desist letter to stop collection harassment.

Article written by credit expert, Kristi Feathers. Kristi can be contacted via her website at www. KristiFeathers.com

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Debt collections use Facebook as ploy

May 9th, 2009

Debt collectors are using cute chicks as bait on Facebook to track down and keep track of debtors. For some reason, someone at CBV collections decided to out the truth behind the online construct “Jenny Anderson,” that she was the tool of professional skiptracers, to all 658 of her “friends.” Reader Bryan, who happens to be a reporter, was one of them, and he took a snapshot and interviewed “Jenny” a bit.

jennyanderson

 The story, inside

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Credit and Collection Issues Top FTC Complaint List

March 5th, 2009

And you guessed it, debt collection and credit report issues remain high on the list showing that reform is needed badly, especially during this credit crisis when consumers are not able to tap into their credit for needed loans.
FTC top consumer complaints 2008

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Debt tips

February 28th, 2009

You can make debt collectors follow the rules

Debt collectors calling you? Tips to handle it right

Advice for bill collector harassment

Avoiding debt collectors

Overview of Bankruptcy

Credit repair by debt settlement

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Beware: Dirty Debt Collectors

November 3rd, 2008

Beware of Dirty Debt Collection Practices

Getting the Money at All Costs Causes Some Debt Collectors to Break the Law

Buffalo news reporter Fred Williams spent three months working undercover as a collector to see what some collectors are trained to do, and found that some of the tactics were dishonest or illegal.

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Debt Collectors terrifying debtors

 Scammers masquerading as debt collectors and law enforcement officials have terrified consumers with threatening phone calls and bilked them out of thousands of dollars, officials with the West Virginia Attorney General’s Office say.

Scammers masquerading as debt collectors and law enforcement officials have terrified consumers with threatening phone calls and bilked them out of thousands of dollars, officials with the West Virginia Attorney General’s Office say.

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Charge offs and delinquency rise for credit card issuers

November 1st, 2008

Credit card companies are next in line to feel the credit crunch. Credit card companies say that their charge-offs of delinquent debt from card-holders have spiked to 5.5 percent, and could jump to 8 percent in coming months, a level not seen since the dot-com bust in 2001, according to Washington Post.

Banks considering debt settlements
USA Today reports that banks are proposing that they forgive up to 40% of the credit card debt owed by the most financially stressed consumers, who are close to bankruptcy. These consumers would then get five years to pay off their remaining card debt, interest-free. Banks would pilot this program with 50,000 consumers, in hopes of expanding it to tens of thousands of others to avoid their debts being lost all together through a bankruptcy.

We’ve known for years that debt settlements is a very sound solution to critical credit issues. Banks have always been resistant to debt settlements but now, they may have little choice. It’s a simple question really. Would you rather get half or lose it all?

Banks seem to finally have their heads out of the sand on this issue and this could be great news for consumers. One, it will cause consumers to think twice about filing for bankruptcy if the banks are willing to work with them, and two- banks will decrease their total charge off amounts by recouping at least half of the debt.

“With consumers losing their homes at record numbers, the last thing they are worried about is credit card debt. If they are already in a position to lose their biggest (secured) asset, their home, then the credit card debt will do little to jar them. It’s unsecured and much easier to discharge in a bankruptcy”,  says Credit Expert, Kristi Feathers.

Bully Debt Collectors
The other issue that’s going to be at hand here is the on-slot of debt collector abuse to consumers with accounts referred to collections. Debt collectors are probably a few of the only businesses thriving in this downturn and they will be all over these debtors, and that is going to cause more complaints nationwide to groups like the FTC.

Right now, consumers with credit card debt mounting and considering bankruptcy need to contact the card issuers and try to work out a debt settlement. They should explain their situation and see if a 40% debt reduction is possible and above all, get these agreements in writing.

A settled debt on a consumers credit report is much better than a charge off and once the debts are settled, the consumer can focus on rebuilding their credit from a stronger standpoint. Remember, settled debts will show paid whereas a charge off is unpaid, so that’s motivation in settling your debts if you are able.

At least with the banks being open to the idea of debt settlement, you have an advantage that once was harder to achieve.

Remember the following;

  • Get all agreements in writing with your creditors/collection agencies
  • Follow up with the credit bureaus to make sure debts are reported accurately as “settled” not “charged off”
  • Be sure to ask the creditor to also settle the rating from paid collection to settled
  • Try to handle the issue BEFORE its assigned to the collection agency
  • Educate yourself on debt settlement issues (you can do so here free)
  • Report any abuse by debt collectors to the Federal Trade Commission at FTC.gov
  • Keep a log of all your communications with creditors and collectors
  • Use DIY help if needed (FDCPA, FCRA)

If you credit card issuer isn’t willing to settle or If you are not in a position to settle your debts, you can contact a credit counseling firm to spread your payments out, reduce interest and fees, and help you get breathing room. Debt settlements is different from debt management.

N2credit.com

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Need a job? Get into the best paying field in the industry right now

September 19th, 2008

And what is that industry you ask? Debt collectors. While the economy is whirling with bank collapses, record foreclosures and high gas prices, one thing remains solid. The debt collection industry. Even the IRS is advertising collection jobs on Google. Paid ads!

With over 969 billion in credit card debt across the country, the debt collectors are filling a supply and demand of bad debts.  A debt collector can earn up to 100k a year in salary and bonus. Think of the demand that’s out there right now.

80 million people are paying off medical debts, students can’t pay their credit card bills, and complaints about bill collectors are on the rise.

Everybody is affected by this looming recession and someone’s got to go after the debts. Banks are writing off record numbers of failed loans and with a tighter bankruptcy law, it isn’t so easy to escape your debts. With new bankruptcy provisions, debtors have to complete a debtors education course, prove they cannot pay their debts back and overall, go through a lengthy process. This causes pause with consumers, so they wait it out.

Eventually the debt collector comes knocking and you will be found. Just yesterday I had a friend call me and tell me her father, who is 70, received a note from his neighbor. The note said to call back Mr. Jones at ABC collection agency. She asked me if this was legal and if it violated his privacy. I explained to her that using a Haines Criss Cross guide to find a debtors “nearby” is a common tactic of debt collectors and isn’t illegal as long as the debt collector doesn’t reveal the nature of the call. In other words, the debt collector cannot discuss the debt with the neighbor but is allowed to leave a message. Humiliating in deed but affective. He was mortified and embarrassed and will probably now return their call to avoid further contact with his neighbors.

Debt collectors know this is a ripe time to cash in on all of our bad luck with this crushing economy and make a fortune in commission and bonuses. What’s frightening is that just about anyone can be a debt collector, and thus, be privy to your financial information. Take a look in your local classified ads. There are offers everyday for highly motivated people with no experience to make a career in debt collections. Imagine someone having access to your credit reports and checking account information along with your home address. I’m surprised there isn’t more identity theft in this field than there is.

Lots of debt collectors are shady characters to say the least. Sure, there are many professional debt collectors with a college education who decided to go into this recession proof industry, but there are also a lot of really bad people taking on jobs to collect debts and those people will stop at nothing to make a fortune off collecting debts.

I know this firsthand, being a debt collector myself for 10 years. I worked with some really shady characters when I took on jobs at local collection agencies. These people would harass debtors nonstop and some went as far as taking the debtors phone number home with them to continue the harassment after work!

There’s very little internal regulation of these actions because debt collection firms roll employees in and out at a constant pace and cannot control what a debt collector does after hours or in private. To someone like me, who knows how some of these employees operate, it’s a frightening scenario.

Now with a failing economy we are going to see a sharp rise in complaints about debt collectors to the Federal Trade Commission and local Attorney General offices. I’m sure there are many lawsuits on the horizon.

If you plan to go into debt collections, remember, these debtors are people just like you and me who have fallen on hard times. I think a diplomatic approach with sensitivity is a much stronger practice to follow while collecting debts. I know it worked for me.

The majority of people not paying their bills aren’t doing so simply because they’re deadbeats. They can barely fill their gas tanks, buy groceries and pay their mortgage. We are all impacted by this economy so I hope collection agencies are enforcing stricter practices and offering good solid education to their debt collectors on how to collect debts in a legal, ethical manner.

If you do find that you’re being harassed, you need to take action quick to stop it. I’ll talk more about that in my next post.

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