As regular readers of our Minnesota Consumer Rights Blog know, we recently published the first part of our debt collection primer. In it, we wrote about different types of debt collectors and debt. As promised, we’re going to look at what you should do when you’re contacted by someone demanding payment for a bill they say you’re behind on.
First things first
Debt collectors contact delinquent borrowers by letter and phone calls. They can also report delinquent accounts to credit bureaus, which will damage your credit score.
Before you give out any personal or financial information or agree to any payments, Time magazine says it’s important to first check the legitimacy of the collector. Get the caller’s name, company name, business number and professional license number. Check the information online to see if the collection agency is legitimate. It’s a good idea as well to read consumer complaints about the agency.
You can also check your credit report to see an account has been turned over for collection. That’ll help you determine if the debt is legitimate and if the amount the debt collector called about is accurate.
It’s important to know you have the right to refuse to discuss a debt – and decline to give out personal and financial info – until you’ve received a validation letter that debt collection agencies must send within five days of contacting you.
The letter should include the creditor’s name, the amount and a description of the dispute process.
Time says that when you’re called, understand that you have bargaining power and that you can negotiate the debt. Prepare to negotiate the number and amounts of payments – and then get the agreed-upon totals in writing.
However, if you don’t owe the debt, and you’ve been contacted by the collector by mistake, dispute the debt. You have 30 days after the collector contacts you in which to dispute the debt.
Remember as well that you have the right to legal representation in debt collection matters such as debt disputes and abusive debt collection, including harassment, threats and more.