Making the Collection Agency Go Away

[David A. Szwak]

Ask Dr. Don
By Don Taylor, Ph.D., CFA • Bankrate.com
http://www.bankrate.com/brm/news/DrDon/20021203a.asp

Making the collection agency go away

Dear Dr. Don,
I had a call from a collection agency at work. It had to do with my Visa account balance being charged off by Providian Bank. They didn't understand that I could not talk to them at work. I told them to write to me and then I hung up as everyone near me can hear everything I say. They no doubt will pursue other methods. They have my address but they wanted me to give my address again. I know they have it and I have not moved. What can I do to avoid this?

I had been paying Providian every month, but the payments didn't help matters as they continued to add late charges and over-limit fees to the point that I went from a credit line of $300 to over $1,000. I just felt discouraged with the way my account just kept getting bigger and I could not afford to pay a larger amount to make a difference in my account. I really need some good advice and really soon. HELP.
Mary Miffed

Dear Mary,
Stopping the collection agency from contacting you at work or home is easy; just write them a letter requesting that they not contact you further about this matter. The Fair Debt Collection Practices Act protects consumers in their dealings with collection agencies.

The Federal Trade Commission has an online brochure that discusses your rights under the FDCPA. It states:

"You can stop a debt collector from contacting you by writing a letter to the collector telling them to stop. Once the collector receives your letter, they may not contact you again except to say there will be no further contact or to notify you that the debt collector or the creditor intends to take some specific action. Please note, however, that sending such a letter to a collector does not make the debt go away if you actually owe it. You could still be sued by the debt collector or your original creditor."

A debt collector is prohibited from calling you at work if they know that your employer disapproves of these calls. When writing the debt collector to request that they stop contacting you, inform them that your employer disapproves of them calling you at work. Then the permitted "no further contact" or "specific action" calls will have to come to your home.

Not talking to the collections agency won't make the problem go away, but it will stop them from contacting you at work. You can file a complaint with your state's attorney general or the Federal Trade Commission if the creditor doesn't abide by the provisions in the FDCPA.

A credit card company piling on over-the-limit fees when it's clear that the cardholder can't get the account under control reflects poorly on the firm, but the late payments reflect poorly on your ability to handle credit. Both sides made a commitment, the lender to provide funds and the borrower to repay those funds over time. You can debate whether the fees were fair, but they are legal.

The charge-off and the subsequent collection information will be on your credit report for seven years from the date of the charge-off. If the collection agency later sues and wins a judgment against you for repayment, that judgment stays on your credit report for seven years from the date that the judgment is filed.

-- Posted: Dec. 3, 2002