Protect yourself from debt collectors

By Jennifer Bragg, producer


NEW YORK (CNNMoney.com) -- It's difficult for most folks to find money these days, and collection agencies are getting desperate, sometimes downright nasty in their attempts to collect outstanding debt.

Complaints of harassment by debt collectors increased by 50% in 2009, according to the Federal Trade Commission.

If an aggressive collector is after you, it's important to know your rights. What's fair? Collectors are nothing if not persistent, and the number one complaint among consumers is repeated calls. While calls to your home or workplace are not illegal, foul language is. Complaints of debt collectors using abusive or foul language surged 35% last year.

According to FTC Commissioner Julie Brill, "debt collectors are allowed to engage in legitimate practice in order to try to collect debt. They are allowed to call the consumer at reasonable hours. They are allowed to contact the consumer through the mail. But there are certain things that they are not allowed to do."

If you are being harassed, you are protected under the Fair Debt Collection Practices Act.

Illegal collection tactics include everything from threatening to garnish wages or press fraud charges to contacting your family or neighbors to discuss the debt.

But contacting you through your online social network is a completely legitimate collection tactic so long as collectors go about it the right way.

Commissioner Brill claims, "What they can't do is they can't start contacting you and friending you unless they tell you they are a debt collector."

Who can you call? If you are being harassed or inappropriately contacted by a debt collector, the first step is to report the behavior.

"The best thing to do is to contact the Federal Trade Commission or your state attorney general" says FTC Commissioner Brill.

Collections agencies in violation of the FDCPA can face stiff penalties from the FTC.

Not your debt? If you are contacted about a debt you don't owe, you can ask nicely for the collector to stop calling, but good luck! Before you let them off the phone, get their name, a telephone number and an address. Follow up with a certified letter making it clear that the collector has contacted the wrong party, that you don't owe the debt in question and that you don't want to be called again.

From that point forward, monitor your credit reports closely. If a collections agency posts a debt that isn't yours on your credit report, you will want to be able to dispute the item as soon as possible with the credit bureaus. Don't wait until you apply for a mortgage to find that bogus debt on your report!

Talkback: Have you ever been contacted by a collection agency? To top of page

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