Debt Collectors - Lie, Damn Lies and Myths

		If you’ve had to deal with debt collectors, you know that a lot of them can be quite persistent, rude and even downright annoying. But exactly how do you know if a debt collector is flat-out lying to you or misrepresenting the facts simply to have you fork over some cash? It’s not always easy to separate truth from fiction with regards to aggressive bill collectors. Debt collection agencies train their collectors to do everything possible to collect a debt and close out an account as rapidly as they can. Sometimes, unfortunately, the unscrupulous ones may even tell you bald-faced lies in an effort to scare you or quickly pull money from your pockets. Debt collectors are usually well-trained people who deal with hundreds of cash-strapped consumers each and every month. Consequently, they know what questions to ask, how to intimidate you, and what buttons to push, in order to get what they want. In light of these facts, it’s vital that you be familiar with the tactics debt collectors often use, including the lies that lots of them are trained to tell. This is a look at many of the most common lies creditors will tell you.
		Lie #1: “Paying off your debt immediately will improve your credit rating.” The Truth: Negative references like “was in collections” or “was Ninety days past due” will still remain on your credit report, despite you pay off an account in collections. Within the Fair Credit Reporting Act, negative information such as late payments generally stay on your credit files for seven years from the date of the last payment. So paying off your debt after being prompted by a bill collector is not going to have a very positive effect on your credit history. The exception to this rule: You might be able to boost your credit rating if you get an agreement in writing upfront from the creditor or collector that they'll eliminate all negative information from the credit history.  Sadly, most consumers don’t work this out when dealing with collectors. As soon as you’ve paid what you owe, you’ve lost a lot of leverage to have the debt collector delete negative information from your credit files.
		Lie #2: “If you just send me a post-dated check, this issue will quickly go away.” The Truth: Any “agreements” you’ve made over the phone in which the debt collector says they will accept a post-dated check rarely work out to your benefit. You simply don’t know what’s going to happen with that check, and you’re also revealing your bank information and address by sending them the check. Collectors have been known to cash post-dated checks sooner than agreed to, to modify the amount of a payment on a check, and also to later tap into people’s bank accounts once the bill collector has someone’s account information. So don’t agree to send any post-dated checks. Send payments using a money order or certified check, return receipt requested - not via your personal checking account.
		Lie #3: “Maybe I can help you explain your situation to a family member or friend who can loan you the money?” The Truth Debt collectors who use this tactic are not trying to “help you out.” Rather, they’re equipping themselves with very private information. They’re searching for your closest relatives and friends in case they ever have to contact these people to track you down. Additionally, by asking questions like: “Don’t you have a relative who is able to loan the money?” collection agencies want to force you into paying money just don’t have. Refuse to engage in this type of dialogue altogether and simply state: “I've exhausted all my options and have no other available funds from any sources whatsoever.” Avoid revealing any details about your existing financial circumstances. Don’t answer questions about where your bank accounts are, just how much you've got in the bank, whether or not you’re working, or how much you earn.
		Lie #4: “If you don’t pay immediately, we’re going to take you to court or garnish your wages.” The Truth Under the Fair Debt Collection Practices Act, creditors can’t legally threaten to take you to court if they have no aim of doing this. They also can’t haphazardly garnish your earnings. Wage garnishment only happens by a structured legal process. If a collector does pursue a court judgment against you, you will be given notice about the court date and will have the opportunity to present your side to a judge. If you decide to challenge a debt, or simply don’t have the funds to pay, don’t get overly worked up by legal threats. In many cases, these are empty threats and pure posturing on the part of collection agencies.
		Lie #5: “I don’t have to prove anything. I’m calling because you owe a debt – and you know it!” The Truth: If a collector calls you out of the blue claiming you owe a debt and you’re not certain that you do, you should challenge it within 30 days and ask them to validate your debt. Under Section 809 of the Fair Debt Collection Practices Act, you have the right to send a bill collector a “debt validation” letter requesting additional information about the debt you are being told is still outstanding. This is essentially a dispute letter that prompts the bill collector to send out you proof of debt in the form of a complete payment history, a copy of the initial loan agreement or credit card application, and proof that the company contacting you truly owns the debt or has been assigned the debt. While many bill collectors will send these records out to you within 5 days of receiving your letter, some may send you inadequate, insufficient or incorrect information. Others will flat out disregard the law and fail to provide proof of the debt. If a debt collector tells you “I don’t have to prove anything at all!” simply hang up the phone on him and cease all contact with that individual.
		According to the Federal Trade Commission, any creditor who can’t validate a debt: Is not allowed to collect the debt, Is not legally permitted to contact you about the debt, and Is not permitted to report it to the credit bureaus. Doing so is a violation of the Fair Credit Reporting Act and gives you the right to sue for $1,000 in damages for each and every violation of the Act.
		Lie #6: “We’re going to embarrass you by letting your family members, friends and even your employer know about your unpaid debt.” The Truth  Again, the Fair Debt Collection Practices Act provides you with 10 different rights in an effort to protect consumers. One of them is the right to be free from harassment, intimidation and embarrassment by debt collectors. So debt collectors do not have the right to spread your individual business publicly, or share information about your debts with family and friends or your workplace. Should they, report them quickly to the FTC as well as the Better Business Bureau.