If you’re like most people, being on the opposite end of a collection call can be quite a defeating interaction.
I’ve been preaching about the dangers of debt collectors for years on this blog but I still get emails from readers who end up getting in trouble with collectors.
Debt collectors only care about one thing and that is to get 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. 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
Debt collectors use all kinds of tactics to try to scare you or upset you enough so you’ll pay the debt.
This is often the point where people make mistakes, like giving access to a bank account. Here are 5 things you should never reveal to a debt collector:
1. Never Give Them Your Personal Information
One of the first things you might notice when you get a call from a debt collection agency is how many questions they’ll begin asking you. They’ll even demand that you provide them with certain personal information “or else”. Don’t cave in, keep quiet and tell them to send it to you in writing.
The first thing you need to know is to never give them any personal information. By personal information, I mean just about anything you wouldn’t give to a stranger.
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 things you shouldn’t provide to debt collectors:
- Additional Phone Numbers (other than what they already have)
- Email Address
- 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
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 so 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 anyways.
Again, it’s best to just tell them to send you everything in writing and then hang up. You have the right to do so, and we’ll talk about that in a minute.
3. Never Provide Bank Account Information Or Pay Over The Phone
One of the biggest mistakes people make when dealing with debt collectors is that the collector convinces them to make a small payment over the phone on the spot.
The person then hands over the debt collector their bank account information or their credit card and the next day find out that they’ve been cleaned out. Yes, this does happen.
If you decide to make them a payment, even a small payment, only do so when the agreement has been sent to you in the mail.
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
Debt collectors will make all kinds of threats, including threatening to call the police (which is illegal but won’t stop them).
They’ll also tell you they’re going to call your friends and family and tell them you are a deadbeat. They’ll threaten to call your employer and get you fired. They can be truly deceptive. Don’t buy into it.
Another strategy debt collectors often do is try to get you either fired up or fearful so they can manipulate you when your emotions are high. In this case, it’s best to just remain calm and don’t believe what they are telling you.
Pretend that you’re talking to a 3-year-old.
5. Asking To Speak To A Manager Will Get You Nowhere
It’s important to realize that a “manager” at a collection agency (at least the ones that they’ll ever let you speak to) are not really there to make sure their collectors are treating customers fairly. Rather, the managers are there to make sure the collectors are getting you to pay –because, of course, that’s how they get paid.
If anything, the manager will treat you even worse. Also, why do you think they are the manager? Likely, they are running the show because they are very good at getting you to pay, and as we have already discussed, this usually means behaving very erratically. Don’t waste your time with a manager.
How To Deal With Debt Collectors
So this all begs the question, how should I deal with debt collectors? Well, it’s pretty simple and it’s important to keep in mind that the law is on your side.
In other words, you have lots of protections. Debt collectors know this, but they just assume you don’t.
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 a debt collector in their tracks.
Your rights fall under The Fair Debt Collection Practices Act. This act declares the rules debt collectors must play by when they are attempting to collect a debt. Unfortunately, because so many people are unaware of their rights, collectors many times completely ignore these rules, breaking the law on a regular basis.
Therefore, it puts you in a good position when you tell the debt collector that you are aware of The Fair Collection Practices Act, and any violation will be documented. 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 a.m. to 9:00 p.m. local time.
- Failure to cease communication upon request.
- Threatening arrest or legal action.
- 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
Playing with your emotions is one of the oldest tricks in the book when it comes to collecting a debt. Most commonly what we see is debt collectors will attempt to make you feel guilty. In other words, they’ll try to make you feel like a deadbeat. Don’t fall for this nonsense. It’s all an act.
If this doesn’t work, they’ll switch acts and attempt to make you so angry that you’d rather pay them, even if it means not making rent, than have to deal with them for another minute. Collectors are specifically trained that the fastest way to get a person to pay is to exhibit this behavior. If you keep this mind, these tactics will become transparent and ineffective
Always remain absolutely calm and cool, even professional, when talking to a debt collector. 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. It’s just a foolish thing to do. Sadly, most debt collectors could care less.
More specifically, always make sure your rent/mortgage, groceries, utilities, and other necessities are taken care of 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 that the amount they are attempting to collect is 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 part of The Fair Debt Collection Practices Act, and basically allows you to request that the collector validate that not only is the debt yours, but that the amount they are attempting to collect is correct. For an example of a Debt Validation Letter, check out this article.
Another thing you should be looking out for is outlandish late fees or additional interest added to the original debt amount. 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.
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. 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 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.
The unfortunate fact is that many of you are probably reading this after you have made some kind of verbal agreement with a collector and they’ve already taken you for a ride. Unless you have agreements in writing there is, sadly, little you can do without getting a lawyer, which may or may not be worth the expense.
That said, just make sure that all future agreements are in writing, whether it’s with a debt collector that you’re currently dealing with or a debt collector in the future.