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What You Need to Know When the Debt Collector Calls

As a consumer of credit, you need to know that there are rules governing the conduct of debt collectors. There are both Federal and State statutes, usually known as “Fair Debt Collection Practices” laws (or similar names) designed to set the limits of the contract between you and that debt collector. The Massachusetts Attorney General has “debt collection regulations” which you can read online.

(I have found the Attorney General’s website a little difficult to navigate. So, when you access the site, click on the “Consumer Resources” tab in the toolbar. Then, click on “Consumer Information” in the drop-down menu. Then, click on the “Credit and Financial Literacy” topic. Then, click on “Consumer Credit.” From there you will see topics listed, including: “Credit Reporting” and “Fair Debt Collection”.)

This is a brief summary of a small part of the state regulations contained in 940 CMR 7.00 et seq., the Fair Debt Collection Practices regulations:

7.04: Contact With Debtors

  1. It is an unfair or deceptive act or practice for a creditor to contact a debtor in any of the following ways:
  1. To threaten to sell or assign your debt to another thereby implying that you will lose your defenses;
  2. To threaten that non-payment will result in your arrest or the garnishment of your wages;
  3. To communicate with you on the phone without telling you the name of the business or company they represent or without disclosure of the collector’s name;
  4. To engage you in communication via the telephone, initiated by the collector, in excess of two calls in each seven-day period at your home (for each debt) and two calls in each 30-day period other than at your home.
  5. To make calls at times known to be other than normal waking hours; and if normal waking hours are not known, at any time other than between 8:00 a.m. and 9:00 p.m.;
  6. To make any telephone calls to your work place if you have made a written or oral request that such calls not be made. (If you made an oral request, it is only valid for ten days unless you send a written confirmation within seven days;)

The regulation goes on for a bit more and defines certain notice requirements. Suffice it to say, you need to politely ask the collector to identify the creditor (name, address, account number) and identify him or herself. Then you need to keep a log. Let the collector know when he or she has stepped over the line set forth in the regulations. It is especially important to know that the collector is permitted to talk only to you about your debt. Calls to family, friends, or neighbors in such a way that implies that you owe a debt are STRICTLY FORBIDDEN. 940 CMR 7.05. 7.06

Remember, the collector believes that there is a legitimate debt owed to his or her client and it is the collector’s job to collect money from you. They are doing a job, so you must treat the collector with professional courtesy even if they do not reciprocate. Also, you should know that debt often is bought and sold many times over. The current owner of the debt may not be the company that you did business with. The collector is supposed to know the original creditor’s name. If you do not recognize the creditor’s name that is given to you; say so. (“I’m sorry, I do not recognize that name.”) If you do not think that the debt is yours, say so. (I’m sorry, that is not my debt or obligation.”) ASK FOR VERIFICATION. (Excuse me, but before we go further I will need for you to produce evidence in writing that I signed for that charge.”) If you think the last activity on the account is more than six years ago, say so.

Don’t Ever Let the Collector Extract a Promise From You That You Know You Cannot Keep.

Before you make promises, you must have a budget. What is your income. What are your reasonable living expenses. Do you have funds to dedicate to paying unsecured debt. Prioritize your expenses. (When making choices, make sure that your rent or mortgage is paid or your car loan is paid. You need a roof over your head and transportation to your job before all else.) Only after you have done this homework, will you know how to respond to the debt collector. Also, make note that you have the right to ask the debt collector to stop contacting you. ( 15 U.S.C. 1692c(c), 209 CMR 18.14(3) ). You must make that request in writing; and, I would recommend that you mail the request via certified mail. (Keep a copy.) Once you have made the written request, the debt collection agency may not contact you again.