Ten Facts About Debt Collector Calls You Need to Know

You get a call one day from a number you don’t recognize. When you pick up the phone, the caller tells you they’re with a debt collection agency and that you owe money on an unpaid account. You’re not sure you recognize the debt, but the debt collector is trying to convince you to make a payment right away.

Debt collector calls can be stressful and confusing, but you have rights in this situation. Consumer protection laws put limits on what a debt collector can do and say when they’re trying to collect a debt. Some debt collectors play it fast and loose with these rules, so it’s important to know your rights. With a little knowledge, you can protect yourself against unfair debt collection practices.

You’ve made a smart decision by seeking out information on debt collection calls. Once you know about consumer protections and how to deal with debt collectors, you’ll be ready to take control of the situation and get debt relief. To help with that, here are the top 10 facts about debt collector calls that you should know.

Why Am I Getting Calls From a Debt Collector?

You’re getting calls from a debt collector because they have information that says you owe a debt. This information may or may not be accurate—there are cases of mistaken identity in the debt collection business. You can verify the debt by asking for a debt validation letter, which you should do first before discussing anything with the debt collector.

Here are the most common reasons behind debt collection calls:

• You have a past-due account with a creditor. For example, if you haven’t made a loan or credit card payment, the creditor will likely call you to try and get you to pay.

• A debt collector bought your debt. Many creditors eventually sell past-due accounts to debt collectors. Once a debt collection agency buys your debt, it will reach out for payment.

• Someone fraudulently racked up debt in your name. You’ll likely need to file a police report and dispute the debt in this situation.

• A debt collector is calling you by mistake. Debt gets sold and resold, which could lead to information mix-ups. You could get a call about a debt that’s not yours or that you already paid off.

When a debt is legitimate, the collection process usually starts with the original creditor contacting you. The creditor that issued the debt is known as a first-party collector.

If the original creditor can’t collect, it may eventually charge off the account, meaning it closes the account and writes off the debt as a loss. The creditor can then sell the debt to a third-party collector. A third-party collector is a company that buys debts and attempts to collect on them.

The timeline for how quickly this all happens depends on the creditor. Creditors often charge off accounts and sell debts to collectors after six months of missed payments, but it varies.

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1. Not All Debt Collector Calls Are Legitimate

Some debt collectors call you by mistake because they have inaccurate information. The debt collection business also has plenty of bad actors who use illegal threats and lies to trick people out of money.

To spot these bad actors right away, here are common red flags of scam calls:

• They pressure you for an immediate payment. The debt collector may be trying to get you to restart the statute of limitations on an expired debt. Or they may know that the debt won’t hold up if you request a validation letter.

• They threaten to have you arrested. It’s illegal for debt collectors to threaten you with arrest, and you could report them to the state attorney general for doing so.

• They ask you to pay with a gift card or wire transfer. These payment methods are usually irreversible, making them popular with shady debt collectors.

• They won’t provide you with much information. If a debt collector gives evasive answers about their company or the debt they’re after, there’s a good chance the call is a scam.

How do you know if a debt collector call is real?

A legitimate debt collector will provide their name, their company name and address, and details about the debt. You can use this information to figure out if the debt collector call is real. Find out if the debt is an account you recognize, and look up the debt collection agency to check that it’s a real business.

If it turns out that the debt collector called the wrong person, you can also simply let them know you’re not the person they’re trying to reach. Even if the debt does seem legitimate, don’t take any action or admit that it’s yours yet.

Tell the caller that you want validation information about the debt. Debt collectors are legally required to provide this information by mail or electronically.

2. You Have 30 Days to Dispute a Debt after the Validation Notice

A debt validation letter gives you the opportunity to recognize whether a debt is yours and if you’re legally responsible for it. If not, you can dispute the debt.

Validation notices normally include the following information:

• Debt collector’s name and mailing address 

• Name of the original creditor 

• Account number associated with the debt

• Current amount of the debt

• How much you owe, broken down so that you can completely understand fees, interest, payments, and credits

• What you can do if you don’t think the debt is yours

• An explanation of your rights

The validation notice must also have a tear-off form that you can send back to the debt collector to dispute the debt or take another action. Once you’ve received the validation notice, you have 30 days to dispute the debt if you don’t believe it’s valid.

3. Creditors and Debt Collection Agencies Are Not the Same

If you don’t recognize the name of the debt collection company contacting you, that doesn’t always mean the debt collector is calling the wrong person. You could be dealing with debt collectors who either bought your unpaid debt or were hired to collect it.

A creditor is the original issuer of a debt. For example, on credit card debt, the creditor is the card issuer. A debt collection agency is a third-party company that attempts to recover debt.

Once an account has been delinquent for a certain amount of time, most creditors will either send your debt to a debt collector or sell it to them for a fraction of what you owe. This is called a charge-off.

The creditor may get a debt collection agency involved. Some creditors hire debt collection agencies to chase down debt for them. Other creditors sell debt to collection agencies for pennies on the dollar.

4. You’re Protected from Unfair Debt Collection Practices

The Fair Debt Collections Practices Act (FDCPA) is a federal law that governs debt collection. Under the FDCPA, it’s illegal for debt collectors to:

• Contact you at unreasonable hours. Debt collectors can call, text, or send you letters, but not at unreasonable or unusual times. The general guideline is that debt collectors can’t contact you before 8 a.m. or after 9 p.m. unless you agree to it. If you tell a debt collector that they’ve called you at an inconvenient time, they must end the call.

• Harass or threaten you. Debt collectors cannot threaten to harm you, use obscene or profane language, or repeatedly use the phone to annoy you.

• Make false statements or misrepresent themselves in any way. It’s illegal for a debt collector to make false claims about you or themselves when they are trying to collect a debt. For example, a debt collector can’t claim to be a lawyer or a government agent, say that you’ve committed a crime, or misrepresent the amount you owe.

• Threaten to seize, garnish, or sell your property or wages. A debt collector cannot threaten to seize or garnish your wages unless they get a court order to garnish your wages or intend to take you to court in order to do so.

• Talk to others about your debt or publicize it. A debt collector can’t communicate to third parties about your debt without your consent. They also can’t talk about your debt publicly or post to social media about it. The FDCPA essentially prevents debt collectors from publicly shaming anyone. In some cases, it makes sense to let debt collectors talk to others about your debt, like if you enroll in a debt relief program.

Note that the FDCPA only applies to third-party debt collectors, not to original creditors. However, some states require original creditors to abide by similar rules.

5. Debt Collectors That Don’t Follow the Law Could Face Legal Consequences

If you think debt collector calls or other such actions may be violating the FDCPA, contact an attorney to find out if you have any legal recourse. You have rights as a debtor, and there are legal consequences for creditors and collection agencies who violate those rights. You can also file a complaint with the two federal regulators that oversee the FDCPA:

• Consumer Financial Protection Bureau (CFPB): 1-855-411-2372

• Federal Trade Commission (FTC): 1-877-382-4357 (FTC-HELP)

If you prove a violation of the FDCPA took place, you may receive $1,000 in damages plus compensation for any actual harm the debt collector caused. The debt collector could also be responsible for paying your legal fees. Don’t wait to take action—you can only file a lawsuit for a violation within one year of the offense.

6. Many Creditors Will Settle Your Debt 

The best way to stop debt collector calls is to resolve your debt. But if you simply can’t afford to pay your debt in full, you might be able to negotiate with creditors yourself. If you’re still dealing with the original creditor, they could be willing to lower your interest rate, change the terms of your payments, or even settle the debt for less. Lenders and credit card companies are often willing to work with consumers. That way, they get paid something, which is better than nothing.

The same is true with debt collectors. Since debt collectors normally buy debt at a fraction of what’s owed, they don’t need to collect the full amount to make a profit. You could potentially agree on a debt settlement that you can afford to satisfy your debt.

7. Debt Collectors Can’t Contact You at Work if You Ask Them to Stop

The FDCPA also protects you from unwanted debt collector calls at your job. If you tell the debt collector that you’re not allowed to receive personal calls at work, then they can’t contact you there anymore.

If you ignore the debt collector’s calls or avoid calling back, they can keep trying to get ahold of you at that number. So it’s up to you to speak up and let them know that they’re calling your place of employment and you want them to stop. Then, if they continue, you can submit a complaint to your state’s attorney general’s office, the CFPB, or the FTC. 

What’s more, telling them not to contact you at all is another way to stop debt collector calls. There’s a risk in doing this, though. If they respect the law and stop contacting you, the door may be closed to negotiating an agreement. The next contact may be a court summons, because the debt collector has no choice other than suing you to collect the money you owe.

8. Debt Collectors Can’t Bombard You With Calls

The FDCPA makes it illegal for debt collectors to place repeated or continuous phone calls to you. While the FDCPA doesn’t set a strict limit on calls, it has guidelines to help determine if a debt collector violated the law. Debt collectors are presumed to have violated the law if they call you about a particular debt:

• More than seven times within a seven-day period

• Within seven days after talking to you on the phone about the debt

There are exceptions to these guidelines. For example, if you give a debt collector permission to call you more often than seven times a week, then they wouldn’t be violating the FDCPA. To give you another example, although seven calls within a seven-day period would normally be fine, seven calls on the same day could be considered a violation.

9. You Can Record Calls in Some States

In 37 states and Washington D.C., you can record your own phone calls if you want to, even if you don’t have the other person’s permission. These are called one-party consent states, and if you live in one, consider recording your debt collector calls so that you have proof of what was said.

That leaves 13 two-party consent states where you need the permission of all parties on the call if you want to record. You can still record your calls, but you need to ask for consent before you do in these states:

• California

• Connecticut

• Delaware

• Florida

• Illinois

• Maryland

• Massachusetts

• Michigan

• Montana

• New Hampshire

• Oregon

• Pennsylvania

• Washington

10. Debt Collectors Can’t Threaten Legal Action They Don’t Intend to Take

Debt collectors can’t try to bully you by being dishonest. It’s against the law for them to threaten to sue you or take any legal action if those actions aren’t truly imminent. The person calling you can’t pretend to be an attorney, a government employee, or a law enforcement officer. 

A debt collector also can’t threaten you with arrest. People aren’t put in jail for unpaid debt, so while there can be legal consequences for unpaid debt, an arrest isn’t one of them. Once again, if you believe that a debt collector has broken the law in their communications with you, report them to your state’s attorney general’s office, the CFPB, or the FTC.

Should You Answer Debt Collector Calls?

You’re generally better off answering debt collector calls. When you keep the lines of communication open, you could resolve issues more quickly. You may be able to work out an agreement with the debt collector, such as a debt settlement or a payment plan. You’ll also be able to find out if the debt is legitimate in the first place.

Answering the phone also prevents the issue from escalating. If a debt collector can’t get ahold of you, the only remaining option is to file a lawsuit.

By talking to debt collectors, you could avoid a lawsuit and work out a deal for your debt, even if you can’t pay in full. You could also notice a positive impact on your credit score after you pay off your collection accounts, especially if the collection agency agrees to remove the collection account from your credit history. Make sure to get the deal in writing before you pay anything, though.

Communication with debt collectors is often a good idea, but there are times when you should be cautious. Avoid discussing the debt until the debt collector has sent you a debt validation letter. Don’t acknowledge the debt or take responsibility until you’re sure it’s legitimate. 

And if you notice any red flags, such as high-pressure tactics or threats, you may want to end the conversation. Then, talk to a lawyer or work with a debt relief company that can talk to debt collectors on your behalf.

What Happens if I Ignore Debt Collection Calls?

Ignoring debt collection calls doesn’t make the problem go away. If the debt is valid, then the debt collector will likely continue to pursue it.

Debt collectors may call you multiple times if you ignore their calls, and they could also try other contact methods. They’re also allowed to contact you via email, text messages, private messages on social media, and through letters in the mail. They’ll typically use any method they have available, unless you send a cease-and-desist letter.

If you don’t respond at all or you request that the debt collector stop contacting you, the next step could be a lawsuit. This depends on the debt collector and the amount of the debt—a small balance may not be worth the collector’s trouble. But if the debt collector can make a profit by suing you, it could go that route.

Losing a debt collection lawsuit could have serious consequences. In addition to what you already owe, the court could find you responsible for court fees and the debt collector’s attorney fees. A court order also gives the debt collector more ways to collect, which could include:

• Garnishing your wages or bank account

• Seizing your assets

• Putting a lien on your property

Judgments also normally show up on your credit report and can hurt your credit score. But debt collectors don’t need a judgment to harm your credit. After providing a validation notice, debt collectors can report the unpaid debt to credit reporting agencies. This negative mark will almost certainly cause your credit score to drop.

Steps to Take When a Debt Collector Calls

When a debt collector calls, start by getting the name of the person calling, the company name, the original creditor on the debt, and the amount. Jot down all this information. Don’t say the debt is yours or that you might recognize it, and definitely don’t agree to pay anything yet. For the first call, you’re just gathering information.

Tell the debt collector you’d like a debt validation notice sent to you by mail or email. After you request the validation letter, you can politely end the call.

There’s no need to have a long conversation. If you’re trying to stay calm, remind yourself that you don’t need to argue, explain anything, or say much at all. The debt collector would like you to start talking openly—especially if they can get you to agree to a payment right then and there. But what’s best for the debt collector isn’t what’s best for you.

Once you get the debt validation letter, check if it’s a legitimate debt and that it’s within the statute of limitations. If not, dispute the debt with the debt collector. The debt validation letter should include a tear-off dispute form you can use, as this is legally required. If the tear-off dispute form isn’t available, you can write your own dispute letter where you explain why the debt isn’t valid. If the debt is valid, then you can decide if you’ll try to negotiate a deal yourself or hire professional help.

How to Get a Debt Collector to Settle for Less

Debt collectors are often willing to negotiate. This is especially true with third-party collectors that buy debt for pennies on the dollar. Since these collection agencies normally pay a small fraction of a debt’s face value, they can accept a settlement and still make a profit.

You can negotiate on your own, and if you’d like to try, here’s how:

• Figure out what you can offer. If you have some money saved, you could propose a debt settlement. For example, if you owe $1,000, you could offer to settle your debt for $300 or $400. Or, you could ask to set up a payment plan where you pay off your debt in monthly installments.

• Contact the debt collector and explain that you can’t pay the full amount on your debt. Find out if they offer you a deal first—hopefully, it’s better than the one you were going to suggest. If not, or if you can’t afford their deal, make your own offer.

• Negotiate an agreement that works for you. You may need to go back and forth, depending on how much you’re offering and how flexible the debt collector is. You don’t need to come to an agreement right away, so don’t feel pressured. Debt collectors sometimes provide better offers if they think that you’re willing to end the conversation.

• Get the debt collector to sign a document accepting the agreement. A deal is only official when you have it in writing. Don’t pay anything until you have a contract in place.

Negotiating with debt collectors can be easier said than done. It’s generally a challenging, time-consuming process, and even more so if you’re receiving calls from multiple collectors, because you’ll need to negotiate with each one.

Professional help could be beneficial in this situation. Instead of doing it all yourself, you could contact a professional debt settlement company that’s experienced in dealing with creditors and working out settlements. You make one low monthly deposit you can afford into a dedicated debt settlement account. Once you have enough money in this account to make an offer, the company contacts your debt collectors to negotiate and work out settlement agreements.

When a debt collector agrees to a settlement, you decide whether to approve the offer. If you do, payment is made from your debt settlement account. The debt collector receives the payment, and the debt is officially paid off, so you don’t receive any more calls about it.

Stop Debt Collector Calls and Take Control of Your Finances

If you’re struggling with debt collector calls or worried about making monthly payments, it’s time to learn how debt relief works and take control of your situation. Freedom Debt Relief will help you understand your options for dealing with your debt, including our debt relief services. Our Certified Debt Consultants can help you find the right solution for your financial future. Find out today if you qualify.