This guide is designed to equip you with the information you need to fight debt collectors attempting to collect personal, family, and household debts. This does not cover business debts.
Debt collectors buy old debts from companies or lenders for pennies on the dollar. For them, it’s a business transaction. They are doing whatever they can to get you to pay the debt. They’re facing increased regulation because many have used intimidation tactics such as yelling and insulting their targets. They’ve often blatantly lied or otherwise deceived their targets. They’re often run into cases of mistaken identity and continue to harass the wrong parties. Many debt collectors are not nice people because they operate in an environment where they are often treated in the same way, though that shouldn’t excuse their behavior.
The number one rule in this fight is that the informed consumer is one that stands the best chance of getting things resolved quickly. Debt collectors like picking the low hanging fruit and will use whatever shortcuts they can to get the job done.
Before getting into what you should do, one bit of advice that is universally given in is that you should collect every piece of correspondence you receive. You should also keep written notes of phone calls, or record them if you have the capability (check to see what level of disclosure you need to provide in your state), in the event you need that information later. Many of the things you do will depend on dates, so keeping a written record of the date and time of the call is crucial. When you send the collector written correspondence, send it certified mail so you have record of when it is sent.
Step 1. Be Informed of Your Rights
Read the FTC’s brochure on your rights  and contact your state’s Attorney General  for more information about your state’s debt collection laws. If you’re especially ambitious, read the Fair Debt Collection Practices Act (FDCPA) or summaries of the salient details. Those laws explain what the debt collector can and cannot do, if they violate those laws then you have legal recourse (you can sue) and those documents explain how you go about doing that.
Once you understand what they can and cannot do, you’ll want to keep notes of when they break those rules. For example, they can’t call before 8AM or after 9PM or say you committed a crime. If they do, note it. They can’t say you will be arrested if you don’t pay up, if they say that… write it down (or note when it was said in the recording!). Each of those are chips in your pocket because they’re deceptive practices prohibited by the FDCPA.
Step 2. Wait For The Letter…
Once the debt collector contacts you, they have five days to send you a letter explaining the amount and reason of the debt. Once you receive the letter, look it over. The letter should contain information about your rights to dispute, specifically how you have thirty days to respond. If the letter does not contain information about your rights to dispute, that may be grounds for a lawsuit. You will see a lot of instances where collectors violate the FDCPA, each one is grounds for a lawsuit with a potential gain of $1000 on your part. If push comes to shove, each one is a chip in your pocket because that’s $1000 of profit out of their pocket (if you get to the point when you need an attorney, they can find all of these things by reviewing your notes and saved correspondence).
Either way, you should write a letter, sent certified mail, demanding validation/proof of the debt. This is known as a Debt Validation letter.
Step 3. Write A Debt Validation Letter
Here is the statute that governs debt validation:
FDCPA Section 809. Validation of debts [15 USC 1692g]
(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
In other words, they have to stop contacting you unless they can prove that the debt is yours. This forces the debt collector to prove that:
- The collection company now owns the debt that once belonged to the original creditor.
- Proof of how they arrived at the figure they are trying to collect, this should include the original contract you agreed to and any payment history.
- The original agreement between you and the original creditor.
Here is a great sample Debt Validation letter  that you can use.
Step 4. Contact an Attorney
At this point, either the debt collector will have given up or they will start using underhanded tactics to get you to buckle. I would recommend getting a lawyer to assist you, you can find one through the National Association of Consumer Advocates’ Find an Attorney tool . If you reach this point, I recommend you follow the advice of your attorney. 🙂
- Fair Debt Collection Practices Act full text 
- Debt Collection Practices:
When Hardball Tactics Go Too Far
- Debt Validation Strategy 
- 10 ways to fight back against a debt collector 
- Consumerist’s Debt Collector posts 
(Photo: pumpkinjuice )