 This presentation has been prepared by a grantee of the Foundation for Financial Planning for the purpose of educating student pro bono financial planners who will be working with their peers and community members. This presentation is for educational purposes only. All information provided in this presentation will be general in nature and may not be applicable to individual cases.

 Someone who regularly collects debts owed to others  On average, a debt collector will make 800 to 1,000 phone calls a week ◦ On a given work day, they may speak to 50 to 60 people

 Fair Debt Collection Practices Act of 1977 ◦ Designed to protect consumers from abusive, unfair, and deceptive practices used by third-party debt collectors

 Things consumers should know: ◦ Debt collectors  Cannot use profanity  Cannot use deceptive statements  Cannot disclose the debt to anyone besides you  Cannot threaten you in any way  Cannot divulge specific information on a recorded message - especially at a workplace

 Typically a debt collector will only call when someone is past due over 180 days or more on a bill.  They will call on all types of debt, typically: ◦ Credit card debt ◦ Past due car loans ◦ Medical bills ◦ Student loans

 8am to 9pm in your specific time zone ◦ If they call before or after, they are in violation of the Fair Debt Collection Practices Act  A debt collector can only call you once a day ◦ Unless they request to be called at a later time

 Five days after the initial communication, the collection agency will send out a written notice with: ◦ The amount of the debt ◦ The name of the creditor to whom you owe ◦ A statement that unless the consumer disputes the validity of the debt, it will be considered valid

 Writing to the debt collection agency within 30 days of receiving the written collection notice  The collection agency should stop all collections until the dispute has been resolved.

 Send a letter - in writing - to the collection agency  The collection agency can send one last letter after stating that: ◦ They will no longer contact the consumer ◦ They might have to take special measures to remedy the debt

 Report any problems with a debt collector to your state Attorney General’s office ◦  Also report them to the Federal Trade Commission ◦  Request to speak with the collection agency’s President  Report the agency to the CFPB

 Fair Debt Collection Practices Act gives you 30 days to clear the debt from the collection agency. Debt collectors must stop reporting a debt to a collection agency if a written dispute is received in 33 days.  Certain collection agencies will give you additional time to clear the debt before it will report on your credit. ◦ Ex: 60 days instead of 30 days ◦ Always ask what day the collection will be reported on your credit report

Incur Debt Payments Cease “In House Collections” – (Typically these are done in collection agencies too.) Collection Agency 2 nd Collection Agency Debt Collectors typically only have 6 months to collect a debt, before it moves to a second collection agency - unless you set up a payment plan with them and are making regular payments.

 Monthly income  Monthly expenses: ◦ Rent or mortgage ◦ Car payment(s) ◦ Utilities ◦ Food  Debt collectors will not take into account frivolous expenses: ◦ Cell phone ◦ Internet/cable

Tips on how to deal with a debt collector debt collector

 Only set up a payment arrangement if you REALLY think you can do it.  If you need to change the date or amount of the payment, just call and ask.  Just be honest with your debt collector.

 As upsetting as a debt collection phone call can be – answer the phone! ◦ The debt collector might have the wrong phone number or person. If they do have the wrong information, let them know.  If the debt collector is looking for you – ◦ Verify your information and decide if you can set up a payment plan or pay in full.

 This immediately will stop the collector from listening to you and helping you take care of your debt.  If you continue to swear, they will end the phone call.

Golden Rule  Remember the Golden Rule: Treat others the way you want to be treated. ◦ If you are unkind to a debt collector, they will be less willing to help you in your situation.

 The FDCPA protects you from abusive third-party collections.  Debt collectors want you to pay off your debts as much as you do!

 Federal Trade Commission. (2011). The Fair Debt Collection Practices Act. Retrieved from  Federal Trade Commission. (2009). Federal Trade Commission: Protecting America. Retrieved from  Sasha Whitley, M.S., pro bono graduate assistant