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Debt Consolidation Facts

1. If you spend more than 50% of your credit limit every month, this indicates to the Credit Bureau that you do NOT have enough cash on hand to meet your monthly expenses. This will identify you as a high credit risk and will actually reduce your credit score by 60 - 70 points overnight (Fair Isaac).

2. If you miss 1 or 2 payments on your credit card debt, the issuing company will skyrocket your interest rate to a whopping 27% - 30%!

3. Out of a random sample of 3 million American consumers (included in Experian's National Score Index), 51% of them have at least 2 credit cards and 14% of them have 10 or more credit cards.

How can debt collectors get away with harassing me at home and work?

The short answer to this question is that they can’t get away with harassment, if you report their illegal activity. Of course, you need to find out what’s legal and what isn’t. The debt collection agencies are unlikely to tell you. Once you determine that the collectors are using illegal tactics, you can begin to take action.

Video: Answering Machine Tape of Debt Collection Phone Call

What are the steps in reporting illegal collection activity?

collection agency harassment by phoneFirst, you need to know that the Federal Trade Commission (FTC) has oversight authority for the Fair Debt Collection Practices Act (FDCPA), which governs how debts are collected. There are three ways to report illegal collection activity to the FTC. The preferred method is to report at this website. The forms are self explanatory and easy to fill out.

If you are not comfortable with filling out electronic forms, or don’t always have access to the internet, you can write the FTC at:

Federal Trade Commission
Washington, D.C. 20580

Finally, if you feel you just have talk to someone about what’s been happening, you can call the FTC at 1-877-FTC-HELP (382-4357).

What information should I have before I contact the FTC?

You need to collect as much information as possible. The more specifics you have, the easier it is for the FTC to investigate. (They do investigate, and violators do get fined or shut down.) Look up the rules and refer to the specific rule that has been violated. Make a note of the date and time of the contact with the debt collector, as well as where it took place. Include the telephone number where you were contacted, and, if you have caller ID, the number from which you were called. Ask for and record the name of the person you talk to. If you have the equipment, record the conversation. Under federal law, as long as one party knows the recording is being made it is legal to record. If threats were made, take notes so you can quote the collector accurately.

If you sent or received any documents, keep copies. If you used registered or certified mail, keep copies of those receipts as well. Cooperate fully with the FTC investigators.

Are those the only steps I can take?

Video: Ten Ways Debt Collectors Break the Law

In addition to reporting to and cooperating with the FTC, you have the right to sue under the FDCPA. If you are successful you can recover our actual damages, plus up to $1,000 in discretionary penalties, plus costs and attorney fees. While the costs and attorney fees may not seem like a big deal to you, they are very important. The ability to recover attorney fees means that, if you have a good case, you will probably be able to find an attorney to take the case. For most of these violations the damages will not be enough to make it worthwhile for most people to sue if they have to pay their own attorney fees. However, if the other side has to pay attorney fees the whole picture changes. The attorney fees can amount to many times the damages you may recover. If the creditor has competent attorneys and you have good documentation, they will advise their client to settle the case. Class action suits can also be brought under the FDCPA.