If Your Phone Rings...

Hearing from a debt collector is not exactly a pleasant experience. But if you get such a call, knowing the ground rules can make the experience a lot less intimidating.

Federal law sets broad guidelines for how debt collectors may operate. They cannot contact you at "unreasonable times or places," such as before 8 a.m. or after 9 p.m., and cannot make repeated phone calls to annoy you. If you have an attorney, you can direct the collector to him or her. If you don't have one, the collector may contact other people, such as family members, to find out where you live and work. But in most instances, the collector can't disclose the purpose of the call. The collector is not allowed to call you at work if your employer disapproves. As a protective measure, note when calls were made and what was said, advises Robert J. Hobbs, deputy director of the National Consumer Law Center in Boston.

Within five days after contacting you, the collector must send a written notice stating how much you owe, who the creditor is, and what to do if you don't think you owe the money. If you don't owe the money, send a letter stating that to the collection agency by certified mail within 30 days. Unless the agency sends proof of the debt, it is barred from getting in touch with you again. Even if you do owe the money, the agency must stop contacting you if you write and tell it to do so. The agency may contact you again if a specific action is planned, such as filing a suit. Remember that collectors cannot falsely imply they are attorneys or government representatives or falsely suggest that you committed a crime.

MEDIATION TIME. What if you think your rights are being violated? The Federal Trade Commission and attorneys general usually don't handle individual cases but will act if they see a pattern of abuse. Many states have their own debt-collection laws, which may be more specific than federal law or extend coverage to more kinds of companies. While federal law covers only third-party collectors, some state laws cover a creditor's in-house collectors.

Suing is also an option, albeit one that many people with financial worries don't find attractive. You can sue a collector in state and federal court within a year of the violation. Under federal law, if you win, the court can award any actual damages suffered plus any extra amount up to $1,000. Court costs and attorney's fees can also be recovered.

For a brochure on your rights, write to Public Reference Branch, Federal Trade Commission, Washington, D.C. 20580.

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