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Creditors, debt collectors must mind their approach

By Patti Drapala
MSU Ag Communications

MISSISSIPPI STATE – Creditors have a right to seek payment on bills, but they do not have a blank check to use any means necessary to collect.

Congress passed the Fair Debt Collection Practices Act in 1977 to stop creditors and debt collectors from using threats, abusive language, misleading information and illegal tactics to obtain payments. The act was written to promote fair debt collection practices and to make sure people received accurate information about their debts.

The law covers consumer debt related to personal, family and household spending. Such debt often occurs when people purchase on credit, use charge accounts or obtain medical care.

When consumers spend beyond their budget and cannot pay creditors, they quickly build debt.

“If you use credit cards, take out a personal loan or have a mortgage on your home, you are a debtor,” said Bobbie Shaffett, family resource management specialist with the Mississippi State University Extension Service. “If you fall behind, count on a debt collector calling you.”

Debt collectors have several ways to ask for money and can include personal visits, telephone calls, telegrams or faxes. They use the most effective method they can to reach the debtor.

Debt collectors cannot call before 8 a.m. or after 9 p.m. If the debtor agrees to accept calls outside this time frame, the collector will make them.

Debt collectors cannot contact a person at work if the employer does not allow personal calls or disapproves of collectors contacting his or her business. They may ask a third party, or someone other than the debtor, for an address, phone number or place of employment.

“The law protects a third party from harassment, which means the debt collector cannot contact this person more than once,” Shaffett said. “If you have an attorney, the debt collector must contact that person.”

The debt collector cannot tell a third party, other than the debtor's attorney, that the person owes money.

Debt collectors cannot threaten, intimidate, misrepresent, use profanity or make false statements when they contact a person. They also cannot abuse their authority by using calls and notices to irritate or annoy someone into paying.

Consumers can stop nuisance calls by writing a letter asking the debt collector to quit calling. When a debt collector receives this letter, the contact must stop. The collector can notify the person of the creditor's plan.

The letter does not relieve debtors of their obligation to pay.

“Sending a letter does not forgive the debt or make it go away,” Shaffett said. “If you owe money, the creditor can still sue you to get it.”

A written letter may protect the consumer because it informs the creditor of what may be happening to keep the consumer from paying.

The letter should include a list of income and expenses, as well as a plan for paying off all creditors. The creditor will want to know the debtor is treating all creditors fairly within the limits of his or her income, Shaffett said.

“Don't stop credit payments because you have money problems,” said Grenell Rogers, Extension area family resource management agent in Oktibbeha County. “Contact your creditors, explain your situation and work with them to make adjustments.”

A person who feels the debt collector has violated the law has the right to sue in state or federal court within one year from the date of the violation. The debtor also may recover damages, court costs and attorney's fees if the action has merit.

Whatever the financial problem, the consumer should not just give up.

“Some creditors may have hardship programs for people who are struggling with finances,” Rogers said.

Debtors can report problems to the state office of the attorney general by calling the Consumer Protection Division toll-free at 1-800-281-4418. They also can contact the Federal Trade Commission toll-free at 1-877-382-4357. People who use a text telephone, or TTY, device because of hearing difficulties can call the FTC at 1-866-653-4261.

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Released: Feb. 26, 2009
Contact: Dr. Bobbie Shaffett, (662) 325-3080; Grenell Rogers, (662) 323-5916