It’s possible that as the summer comes to an end, you’re getting some type of communication from a collection agency. Maybe you went on vacation without checking your bills, maybe you had a pricey summer, or maybe you just had the best summer ever and neglected to go through your mail. You are not alone, according to the CFPB, 30 million consumers are contacted by a collection agency. Whatever the reason, you may be late on a payment, and a bit confused as to why a collection agency is calling you.
Collection agencies are third party companies brought in by a business to collect on late accounts. If you haven’t paid a dentist’s bill, for example, and they’re having trouble contacting you, they might hire a company like American Profit Recovery. There are also times when an agency might call you in error. We’ll get to that in a minute.
A collection agency should ideally work with consumers to help them resolve their debts. This is especially true of APR, as we value diplomacy between the two parties in dealing with debt resolution. Dealing with an agency in an agreeable, cooperative manner can help you maintain your credit scores and keep a good relationship with the original business you owe the money to.
Ignoring calls from a collection agency is a big mistake, one that prevents the situation from being resolved on either end. Agencies have to follow standards and laws when it comes to collecting debt, so don’t be afraid to engage with them. Any legitimate collection agency will follow these laws and you should make yourself aware of what a collection agency can and can’t do. Instead of hanging up the phone, here are some tips of what to ask or look for when you get a call from a collection agency.
Validation: Validate the debt. Verify the collection agency is seeking out the right person and has the correct information. Let the agency know if you have a dispute and ask for documentation if needed.
Communicate: If you’re contacted about a debt, don’t ignore the call, even if it’s not your account. Ignoring the calls or any other communication does not make the bill go away and generally won’t stop collection efforts
Work out a payment plan: Let them know what you can or can’t pay at the moment. Be upfront and honest and work out a plan. If you run into problems with the plan then again communicate. Most agencies are more than willing to work out a payment plan.
Get help: Seek help or look for resources if you need help. One great resource is AskDoctorDebt.org, created by the ACA International to help consumers.
And always remember, as a consumer, you have certain rights under state and federal laws known as the Federal Debt Collection Practices Act (FDCPA). AskDoctorDebt.org can be a great resource for this also.
I had a great opportunity to sit down with the folks at Fox 25 news in Boston last year to discuss this topic. Please take a few minutes to watch.