If you’re like most people, receiving a collection call can begin a defeating interaction.
I’ve been preaching about the dangers of debt collectors for years on this blog because I get emails from readers who end up getting in trouble by answering the phone.
Debt collectors care about one thing: Getting you to pay them so they can get a commission check.
In general, you shouldn’t talk to debt collectors over the phone at all. Nonetheless, it’s been my experience that when you equip yourself with the correct tools, controlling the outcome of a collection call can be very easy.
So in this post, I’m going to outline some specific things you should keep in mind if you end up on the phone with a debt collector.
5 Things You Should NEVER Say To A Debt Collector
Federal law prohibits debt collectors from threatening you, but this doesn’t mean they won’t try to use fear to motivate you to pay off the full amount.
In many cases, the fear is supplied by you — the person who owes the money.
By this I mean the debt collector doesn’t have to say much or overtly break the law.
Just the fact that he or she has called and asked for money can prompt many consumers to pay the debt — whether it’s credit card debt, medical debt, or even student loan debt.
Even if they can’t afford the full amount, they’ll pay something. They’ll make the first of several promised monthly payments — anything to get off the phone respectfully.
Debt collectors know this. They know if they keep trying you’ll eventually make a mistake, like giving debt collectors access to a bank account or credit card number.
When this happens you’ve given away your power in the situation.
By knowing your rights and staying calm and patient, you can avoid this and many other mistakes.
Here are 5 things you should never reveal to a debt collector:
1. Never Give Them Your Personal Information
A call from a debt collection agency will include a series of questions. The agent will ask for personal information to confirm your identity and your ownership of the debt.
You don’t have to answer these questions. Instead, ask the agent to communicate with you only in writing.
If a random stranger called asking for your mother’s maiden name or your Social Security number, chances are you’d just hang up the phone. Think of debt collectors the same way.
You don’t have to be rude or inconsiderate. Just don’t answer questions, and inform the agent you’ll respond to written communication only.
This especially includes where you’re employed – unless you want them to start calling your work (and they will, trust me).
Here are a few more personal things you shouldn’t provide to debt collectors:
- Additional Phone Numbers (other than what they already have)
- Email Addresses
- Mailing Address (unless you intend on coming to a payment agreement)
- Employer or Past Employers
- Family Information (ex. spouse’s employer or phone number)
- Bank Account Information
- Credit Card Number
- Social Security Number.
I’ve even heard of debt collectors pretending to be credit counselors or lenders who will help you get out of debt through debt consolidation, in order to access your Social Security number or other personal data.
In these cases, you’re dealing with a scammer. Just insist on written communication and get off the phone.
2. Never Admit That The Debt Is Yours
Even if the debt is yours, don’t admit that to the debt collector.
There is no reason to do this, and it could get you in trouble later on if you try to dispute the debt on your credit report as inaccurate.
Many times old debts have fraudulent interest charges that you aren’t obliged to pay, but debt collectors will attempt to collect anyway.
Again, it’s best to tell the collection agent to send you the information in writing and then hang up. You have the right to do this, and we’ll talk about that in a minute.
3. Never Provide Bank Account Information Or Pay Over The Phone
A debt collector will try to convince you to make a payment — even a small payment — while you’re on the phone.
The agent will need your bank account or credit card number to make the transaction. To the consumer, it seems like an easy and quick way to end the conversation and get off the phone.
But this transaction causes a few big problems:
- You Lose Leverage: Your payment is your leverage for dealing with debt collectors later. So don’t make a payment prematurely and give away your best bargaining chip. Save it for later when you can get something in return such as asking the creditor to remove negative items from your credit report in exchange for a payment.
- You Share Account Details: The agent may say he or she will not store your bank account or credit card number. But you have no way of knowing whether this is true. Debt collectors have also charged more than you agreed to pay.
- You Reset the Statute of Limitations: By making a payment you reset the statute of limitations on the debt. This gives the creditor more time to sue you for losses later.
If you want to pay off the debt or enter a payment plan, that’s OK, especially if payment is part of your broader debt management plan. But get an agreement in writing first.
Before paying anything, make sure your payment will cancel the entire debt.
If possible, have the debt collector agree to remove the collection account from your credit report — both from the original creditor and the collection agency — with all three credit bureaus.
Getting this agreement in writing via email is OK, but I still prefer snail mail when dealing with debt collectors.
Even then, never give them access to your bank account, even if you have the agreement in writing. Send them a check.
4. Don’t Take Any Threats Seriously
Despite federal laws such as the Fair Debt Collection Practices Act, some debt collectors will make threats, including threatening to call the police.
Some agencies will threaten to call your family members about your debt. Others have threatened to call your employer and set up wage garnishment arrangements.
The law prohibits this kind of behavior, but it still happens. If you feel threatened, don’t respond by getting in the fray and fighting back.
Know that the Consumer Financial Protection Bureau, part of the Federal Trade Commission, has your back. Your state attorney general’s office does too.
You can complain to the CFPB or to your state attorney general. Often, just mentioning the CFPB or federal legislation such as the FDCPA will tell the debt collector you know your rights.
So even if the debt collector stoops to making threats and trying to stir up your emotions, don’t fall into this trap. Just stay calm and know the threats are baseless. You can say goodbye and hang up the phone.
And just so you know: A legitimate debt collector could garnish your wages but only after successfully suing you in civil court.
5. Asking To Speak To A Manager Will Get You Nowhere
It’s important to know a “manager” at a collection agency won’t advocate for your rights.
Rather, the managers will double down and help the agents pressure you to pay. Why? Because that’s how they get paid.
If anything, the manager will treat you even worse than the agent who called to begin with.
Why? Well, how do you think an agent earns his or her promotion to the manager? Likely by being very good at convincing consumers to pay up.
So don’t waste your time with a manager.
You have to be your own advocate when a debt collector calls.
How To Deal With Debt Collectors
So all this leads up to a more important question: How should I deal with debt collectors? After all, if you can improve your credit score by paying off a debt, you’ll save money later.
Well, it’s pretty simple, and it’s important to remember the law is on your side.
In other words, you have lots of protections. Debt collectors know this, but they assume you don’t know. They have no plans to remind you.
In order to properly deal with debt collectors, the best technique is to remain absolutely calm and follow these guidelines:
Tell Them You Know Your Rights
Regardless of what a debt collector might tell you, you have a lot of rights when it comes to how a debt can be collected.
In fact, by merely mentioning that you understand your rights will, many times, stop debt collectors in their tracks.
Your rights come from the Fair Debt Collection Practices Act. This act lays out the rules debt collectors must follow when they attempt to collect a debt from you.
Unfortunately, because so many people are unaware of their rights, collectors many times ignore these rules. They certainly won’t inform you of your rights.
Therefore, you’re in a good position when you tell the debt collector you are aware of The Fair Debt Collection Practices Act and that any violation will be documented and forwarded to the Federal Trade Commission (FTC).
What are some of the most common violations?
Here is what we see the most often:
- Contacting consumers by telephone outside of the hours of 8:00 am to 9:00 pm local time.
- Failure to cease communication upon request.
- Failure to use the contact information you requested.
- Threatening arrest or criminal prosecution.
- Using abusive or profane language.
Here is a full list of your rights under The Fair Debt Collection Practices Act.
Don’t Allow Them To Provoke You
An agency’s collection efforts often don’t have to break the law. Agents can simply imply threats, and that’s often enough to prompt payment.
They do this by playing with your emotions and tapping your existing fears and stigmas about collection accounts.
Most commonly, a debt collector will try to make you feel guilty, implying you’re stealing or not doing your part as a responsible citizen by not being able to pay your medical bills or credit card debt. Don’t fall for this nonsense. It’s all an act.
When this doesn’t work, an agent may switch strategies and try to make you so angry you’d rather just pay up than continue dealing with the agency.
Debt collectors have one goal — to inspire you to make a payment. If you keep this in mind, their tactics will become transparent and ineffective.
So just stay absolutely calm and cool. You can be professional even if the agent on the phone seems to be running a scam. If it helps, laugh at them when they try to provoke your emotions.
Your Basic Needs Come First
As a general rule, you should never pay a debt collector if it puts your ability to pay for necessities in jeopardy. In other words, don’t pay a debt collector when you need that money for groceries or the rent.
More specifically, always make sure your rent/mortgage, groceries, utilities, and other necessities are paid before you even consider paying off an old debt.
It’s simply not as important, regardless of what a debt collector might have you believe.
Verify The Amount They Are Collecting
Regardless of whether you receive a debt collection notice via a letter or a phone call, you need to make sure the debt and its amount are accurate.
There are several things you should be looking at before agreeing to make any payment.
Before you do anything else, you should send the collector a debt validation letter. This letter is allowed by the Fair Debt Collection Practices Act. In the letter you request the collector prove you owe the money.
For an example of a Debt Validation Letter, check out this article. You have to send the letter within 30 days of your first contact with the collector.
If the creditor can’t prove you owe the money by providing accurate information, including account numbers, you have a strong case for getting it off your credit report. Your credit score could improve significantly.
Another thing to look for: outlandish late fees or additional interest added to the original debt amount from the original lender or credit card issuer.
Remember that in most cases you can negotiate to significantly reduce, or even eliminate these fees.
Debt Collectors Are More Willing To Negotiate On Older Debts
The next time a collector contacts you regarding a 10-year-old debt, don’t be afraid to offer them a debt settlement of pennies on the dollar.
Many collection agencies purchase old debts from various companies after the company has written off the debt.
Therefore, even if the settlement amount may seem small, keep in mind that as long as the collection agency makes a return on their investment, they will be happy.
This normally requires a lump sum but an agency may agree to a payment plan.
If the debt is still on your report, you can ask the creditor to remove the negative item from your credit report in exchange for your payment.
All Agreements Should Be Made In Writing
Want to know how dishonest debt collectors can be? Check out my interview, A Regretful Debt Collector Tells Me His Story.
Debt collectors are notorious for making false promises, reneging on agreements, and even clearing out people’s bank accounts which can ruin your personal finances
All of these things happen when you deal with debt collectors over the phone.
Protect yourself by never making agreements with debt collectors over the phone. Simply tell them to send you everything in writing and then hang up.
You can also use email, just as long as it’s not some kind of verbal agreement that can’t be proved in court.
Unless you have agreements in writing you can’t prove you ever had an agreement, to begin with.