6 Common Lies Debt Collectors Will Tell You
Debt collectors are special debt collection agencies assigned by the financing companies- mostly direct payday lenders to collect payments from the delinquent borrowers who have defaulted their loans. People also call them bill collection agencies. Since it is their job to recover the debt, they try everything- including telling lies and threatening debtors- to make the borrower pay. If you have had any experience dealing with a debt collector, you would know how it is. The trained professionals of such agencies master the skills of convincing people to pay the debt by just having phone calls. Let us know what are some common lies they tell you to convince, and what they are in fact.
1. They say- Pay off the outstanding loan and improve your credit scores right away.
Fact- Once the debt collectors are out in charge to recover the loan, they do not wait for long to report to the credit bureaus with negative remarks. They might also mention that “still indebted after 3 months of due” etc. in the report which would most likely to remain for 7 years- even if you pay immediately. As per the Fair Credit Reporting Act (FCRA), only if the lender or the debt collector remove such negative remarks, then it will reflect in a good credit score. To get that done, one must have a formal agreement with the lender- although, usually after you pay off, you cannot make sure that they would respect the agreement. Therefore, you cannot improve your credit score immediately by getting debt free.
2. They say- Send away a post-dated check, and your debt will be settled.
Fact- Since this is not a formal agreement, and they just tempt you over the phone, you must not believe it. A post-dated check is written for a date in future which you do not know. At the same time, your back details might get revealed. There have been cases when debt collectors have misused having a post-dated check with them. They can cash it whenever they want by putting a date, and they also might deduct more than the agreed amount by tapping into the account as they have the bank details. Therefore, it is better to send the money order or send away a certified check which demands a return receipt.
3. They say- Can we approach a friend or relative who could help you pay off by lending some money?
Fact- Although this sounds like they want to help; in fact, they are not at all interested in that. It is a tactical way of collecting important personal details about you. They try to find out whom they can call or put pressure on- in case they are not able to contact you directly in future. It is wise to refuse to talk regarding these. Just be candid while saying that you do not have any money to pay at the moment- without revealing much about your financial status. If they ask you any details about your checking account, income etc., just tell them that you have already given the details while applying for the loan.
4. They say- Unless you are paying by this week, we will drag you to the court for your wage garnishment.
Fact- Any form of threat from a debt collector violates the Fair Debt Collection Practices Act (FCPA), including the threat to garnish your wages. They cannot even directly write to your employer to have your wages garnished. This can only be done if they win the case against you in the court. Remember that you can always challenge the collection agency or lender in the court. Therefore, do not get scared of such threats, and remind them that what they are doing is a violation of the law.
5. They say- We are calling to remind you to pay off your outstanding loan, and we are not bound to prove it. You have defaulted the debt intentionally.
Fact- You might get a very firm call from a debt collection agency that you have taken out a payday loan, and you need to pay immediately. However, they might not give you any prove over the phone. In this case, you should ask them -in writing- to prove it by sending a document that validates the debt. This dispute letter can be sent within 30 days of such a call. Section 809 of the Fair Debt Collection Practices Act (FDCPA) gives everyone this right. In response, the bill collector has to send you the copy of the loan agreement and the evidence that gives the collector the right to ask for repayment.
According to the law, the response letter should be sent out by the collector within 5 days with complete and correct information. If the letter consists of false information or they say that there is nothing to prove, then disconnect with them. You could put them on black call list by contacting your phone service.
The Federal Trade Commission (FTC) strictly says that without validating the outstanding debt,
• The debt collector does not hold any right to collect the debt.
• It should not contact you and ask for repayment or any other details.
• The agency cannot report the default of the loan to any credit bureau. If this is violated, the borrower can sue it for $1,000.
Therefore, they cannot say that they do not have to prove, and get away with it.
6. They say- we would make your unpaid debt public with your family, friends and employer to shame you, unless you pay.
Fact- In case any debt collector has threatened you so, you can lodge a complaint against it by reporting the same to the local authorities or the FTC. the Fair Debt Collection Practices Act protects the privacy of a borrower with as many as 10 rights, and no lender or debt collection agency can threaten to ignore those. In the US, nonpayment of debts cannot send you to jail, neither should be a reason for your harassment. Therefore, warn them that you’d complain if they repeat such threats.