If you believe that the debt collector has violated the law, then you have the right to sue the collector in a state or federal court. If you win, you may recover money for the damages you suffered, plus payment of attorneys' fees and court costs. If you are chosen as a designated class representative, a lawsuit may be filed against a debt collector on behalf of a group of people. In this case, you can recover up to the lesser of $500,000 or one percent (1%) of the collector's net worth.
When you are harassed by a debt collector, the first thing you must determine is whether this is the original creditor, a collection agency or a company that bought the debt. Collection agencies and attorneys who regularly collect debts must comply with Fair Debt Collection Practices Act. The original creditor is generally not liable under the FDCPA unless they are holding themselves out as a collection agency or if the owner of a debt acquires it after default.
Evaluate what type of debt you are alleged to owe. If the debt collector is attempting to collect a consumer debt such as a utility bill, car payment, home mortgage etc, you may be protected by the FDCPA.
Remember that you do not have to sit on the phone and be abused by a debt collector. You can tell the collector on the phone to stop calling. During any phone conversation with a debt collector, be sure to ask for and write down the name of the agency and the name of the caller. You should ask the collector who the original creditor is and insist on a written description of how they contend that you owe the amount claimed. Do not discuss the details of the alleged debt or acknowledge that the debt exists until you review the information provided by the debt collector. You can tell the collector that you are not willing to discuss the debt until you receive these documents and review them.
Store all collection letters that you receive, as they may be evidence of a collector's unlawful practices or harassment. Keep a log of all telephone contacts. If your state permits you to record a phone call, consider recording calls from the debt collectors for evidence of any harassing conduct over the telephone. Do not respond to the various techniques a collector may use to make you feel guilty or obligated to acknowledge or promise to pay a debt, if you have any doubt about it being a valid claim against you.
If you have witnesses to the harassment then take notarized statements from them to back up your case.
Under the FDCPA, if you notify the collector that you dispute the debt within 30 days from the initial communication from the collector, the collector under Federal law, must stop all efforts to collect the debt, until such time as the collector provides you with the information on the original creditor and verifies the validity of the debt. The collector is compelled to inform you of these rights in writing in its initial written communication or within 5 days after an initial communication by telephone.
It is also very important to send correspondence to a debt collector by Certified mail return receipt requested. With this certified mail, you can track the letter all the way to the collection agency and you will receive a signed and dated notice that the collector has received your letter
Document everything. No matter how many letters, faxes, E-mails or phone calls you made, take time to include copies of your phone bills, E-mails or fax confirmations so that you can quickly show to the judge the agency's negligence.
Obtain all current credit reports. See if the collection agency posted a bogus debt on your credit report. If there is an inaccuracy, write to agency by certified mail return receipt requested. Ensure that your dispute letters provide your identifying information (name, address, social security number and date of birth) identify the entries with specificity. Include copies of the certified letter you sent the collector and any complaints you filed with regulators.
If you owe the debt to debt collector and decide to pay, make sure to get a statement of what you owe before you send any money. Send a cover letter with any payment outlining the terms under which you are paying, especially if you negotiated a lower payment than the amount stated. Designate the specific debt the payment is to cover. Avoid sending money through money orders; it is difficult to prove payment. Sending a check may be safer, but also consider the collector will then have your bank account number and can check the balance of your account. If you owe more than one debt, the collector knowing your account number may affect you.
The chance that you will be sued if you don't pay the collector varies from debt collector to debt collector. Some collection agencies only send collection letters, some mostly make phone calls and some have authority to file suit. Some collection agencies write a letter, followed by phone calls or just file suit. It is hard to know exactly what will happen unless you know how that debt collector works or what the creditor has authorized the collector to do. If a debt collector receives a letter demanding a debt collector to cease, some of them may file a suit, as this may be their only option, while other debt collectors simply send the account back to the original creditor or forward to another debt collector.
If you want to preserve some rights under the FDCPA, you must send a written dispute within 30 days of your receipt of the first "validation notice" from the debt collector. Even if you owe the debt, or you cannot pay, you still have rights under the FDCPA.
Keep copies and records of all correspondence you send and receive, including the envelopes. It is very important that you keep copies of everything when communicating with a creditor, debt collector or credit reporting agency. Should they violate the law, you will have the necessary documentation to prove it and perhaps make them pay. If you have encountered any special difficulty and need more help, you will need these records to proceed. Finally, if the information that was removed from your credit report should reappear later, then you should have the documentation to force the credit agency to permanently delete this entry.