Dealing With Collection AgenciesDealing with collection agencies can be a very frustrating and annoying experience. The first important thing you want to remember is to keep your cool no matter what the collection agency representative tells you over the phone, keep in mind that their ultimate goal is to collect money from you and they might go as far as telling you lies to scare you into paying them.
The only way to avoid these scare-to-pay tactics is by knowing your legal rights which are outlined in the Fair Debt Collection Practices Act. It will especially help when collectors know that you understand the fair debt collection law, they will be less likely to deal with you like an uninformed consumer but instead treat you with respect.(continued below) The next important information you want to have handy when dealing with collection agencies would be the exact details of the debt they are trying to collect. It is not uncommon for debt collectors to call the wrong person in reference to an unpaid debt due to case of mistaken identity.
If it’s a debt that you know that you owe but never paid, check your records for the balance on the account and make sure that it corresponds with what the debt collector says you owe. To help with this task and to also protect yourself you want to ask the collection agency to validate the debt with a breakdown of what you owe and how they arrived at that figure. After all, you want to make sure that this so called collection agency is not a scam trying to steal from you.
They need to provide you with this proof, and you do this by sending them a debt validation letter.
NOTE: It’s important that you put this in writing and that you send your request within thirty days of the collection agency’s initial contact about the debt.
Remember that debt validation is your right according to the law!
The next must-do when communicating with collection agencies is to make sure that you keep good written records of each phone call. When you are contacted via phone by a debt collector simply ask them for their name, or employee identification number if they refuse to give you their name. Let them know you need some form of identification for possible future reference.
If possible I would also suggest that you record the phone conversion if you don’t mind investing in a recorder. You will be amazed at how differently the conversion will go if the collector knows that you are recording the call. The collection representative will know that you are not someone they can scare into paying them.
Believe it or not cool and calm will give you the upper hand when dealing with collection agencies. Most collectors are used to dealing with rude and aggressive consumers but you can turn the tables by being the opposite.
If you have agreed to the debt and decide that you want to pay it, you should do so on your terms and what works for you. In this situation you should try and negotiate the smallest amount as possible, keeping in mind that the worst has already happened in terms of any damage to your credit report rating.
Note: When dealing with collection agencies to payoff a debt in order to qualify for a mortgage loan, some lenders may require you settle the debt ASAP. It’s always a good idea to take care of collection accounts well in advance of going through the home buying process to get the lowest payoff/settlement amount from a debt collector.
If they know you need to pay the debt off to qualify for a home loan all your negotiating power would have gone out the window, they will request that you pay the highest amount possible since they know you want to complete your home purchase. Recent Fair Debt Collection Practices Act pages you might be interested in:
Collection Agency Laws
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