Debt Collectors Who Call in the Night . . .

and Other Abuses

Know Your Legal Rights —and How to Repair

Your Credit Rating

By Reginald R. Owens, Ph.D.

t's 3 A.M. and the phone is ringing. At first you think it's the alarm. Then, half awake, you look at a clock and instinctively say to yourself,  “At this time of day, it can't be good news. . . " and it's not.

You reach over, pick up the receiver, and in that gravelly voice that only exists at this hour of the day, you answer,  “Hello???”

“Hi, Ms. Jones, this is Joe Smith at Sleazy Associates. We're calling you again about the payment on your bill at Real Big Department Store.  You know, if we don't get a payment real soon these calls will continue until you pay on this legitimate debt."

You can't believe it. Yes, you've gotten a little behind in your bills. There's the divorce, and no health insurance, and no support payments. It's been tough the last six months. But it's 3 o'clock in the morning!

This situation is one that many women face regardless of their marital status, job status, or credit history. If you’re ever faced with similar intimidating credit -collection tactics, you can take steps to “stop the madness” by knowing what your rights are.

Credit-History Lessons

No one in this country today would suggest for a moment that your credit history is not important. It can affect everything from whether you get insurance, a lease, a car, or even a job. But things happen, and you should know that there are laws and agencies whose primary focus it is to help you recover your financial footing. The Federal Trade Commission (FTC) is responsible for enforcing credit law and protecting your rights to fair access to obtain, use and maintain credit. The agency's mandate is to ensure that all businesses provide fair and equal access to credit and that there is a process available to resolve disputes.

What is a credit history? Well, it’s a file or report maintained by organizations called consumer reporting agencies, or CRA's. These organizations maintain and sell credit files or reports to anyone requesting information on a person’s credit -worthiness. Almost everyone has a credit report.  Any time you apply for credit, insurance, a loan, or a job, a record of your activity is created. Your credit history also records bankruptcy filings, salary history, credit-payment history, lawsuits, judgments, liens, and arrests. The Fair Credit Reporting Act (FCRA) and the Fair Debt Collection Practices Act (FDCPA) ensure that consumer reporting agencies maintain and report correct and complete information.

Here are some of your rights regarding your credit history, as defined by these laws.

1.       You have the right to receive a copy of your credit report. Generally, you must pay the CSA or some middleman firm for it. However, if you have been turned down for credit, you can receive a free copy of the report used to turn you down from the CRA who prepared the report. Your request has to be made within 60 days of receiving a denial notice, which will include the name, address and other information about the CRA that provided the report.  Use this information to contact the CSA and request your free report.

2.       You have the right to know  the names of the individuals or firms who receive your report. This is generally limited to identification of recipients who requested your credit history in the last year, or, in the case of employment inquiries, to recipients within the last two years.

3.       You can contest the completeness and/or accuracy of any item on your report. You must file a dispute complaint with the consumer-reporting agency and with the organization that provided the information to the agency. Each of these organizations is required by law to investigate your objections and amend your file if they find inaccuracies.

4.       You have the right to add a summary explanation to your report. You should do this if your disputed claim was not resolved to your satisfaction, or if there are extenuating circumstances surrounding late payment of bills (job loss, a medical condition, stolen credit cards, etc.) This summary must be provided as an integral part of your credit report when the CRA distributes it to any agency or organization.

To Your Credit: Rights & Redress

If you are denied credit, you have a legal right to know why.  The Equal Credit Opportunity Act (ECOA) prohibits credit discrimination on the basis of sex, race, marital status, national origin, age, or receipt of public assistance. They can ask for this information but not use it to discriminate against you. If you suspect that this information has been used to discriminate against you, you should report it immediately to the Federal Trade Commission by phone, on the Internet, or in writing. The provisions of the ECOA apply to just about any organization that has the ability to extend credit.     Anyone who participates in a credit decision —including real estate brokers—must follow the law. Under the ECOA, you have the right to have public assistance considered in the same manner as other income.

What’s your part of this deal? Besides paying your bills on time, keep in mind that it’s important to closely check all credit billing and electronic fund transfer statements. If you find an error—for instance, if your credit card has been billed twice for the same item—notify the company and contest the error right away. The Fair Credit Billing Act (FCBA) and The Electronic Fund Transfer Act (EFTA) provide you with the legal wherewithal to have these errors addressed.

Now, how about that nasty debt collector who calls you at 3 o’clock in the morning or—even worse—at work? Well, the Fair Debt Collection Practices Act (FDCPA) provides you with certain legally enforceable rights.

1.       Debt collectors may contact you only between 8 A.M. and 9 P.M. If they call outside that time frame, make sure to let them know that you know your rights.

2.       Debt collectors may not contact you at work if they know that your employer disapproves. If they do call you there, tell them you are not allowed to take personal calls.

3.       Debt collectors must not harass, oppress, or abuse you.

4.       Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.

5.       Debt collectors must identity themselves to you on the phone.

6.       Debt collectors must stop contacting you if you inform them that you have filed for bankruptcy.

7.    You DO  NOT, I repeat, do not, have to deal with collection agencies. Simply send them a letter by certified mail, return receipt requested, informing them that, under the provisions of The Fair Debt Collection Practices Act  (FDCPA): You refuse to work with them;  any further communications will be reported to the Federal Trade Commission, the State Attorney General and other governmental agencies that have law enforcement authority; and  they are hereby warned that any adverse inaccurate information placed by them in your credit report will be dealt with by appropriate actions, including bringing to bear the full authority of local, state and Federal law enforcement and other governmental agencies.

          Of course, shame on you if you have caller ID and pick up the phone at 3 A.M., when you don’t know who is on the other end. If the caller ID message tells you the caller cannot be identified because the call is coming from outside your local calling area, you can be pretty sure that the party at the other end is a sales or collection agent.

Repairing the Damage

You should know that accurate negative information can remain on your report for seven years; bankruptcy information is retained for 10 years. If you're having problems, contact your creditors before they get out of hand. In most cases, they will work with you to reduce payment amounts, lengthen debt periods, etc. Here are some other defensive maneuvers:

·         If you want to contest a credit report, contact the reporting company in writing and send it "return receipt requested."

·         When filing a dispute, include your name, account number, and the dollar amount in question, as well as the reason for the objection.

·         If in doubt, request written verification of a debt.

·         Keep your original documents, including receipts, sales slips, and billing statements.

·         Be skeptical of businesses that offer instant solutions to credit problems.

·         Be persistent. Resolving credit problems can take some time and effort.

If you are having problems "getting it done" you may want to seek the assistance of a credit -counseling service. Universities, military bases, credit unions and housing authorities offer low or no-cost assistance. Find them in the phone book or on the Internet.

But remember—since money, after all, is what this is all about: there is nothing that a credit -repair company can do for you for a fee that you can't do for yourself for free.

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 Reginald R. Owens, Ph.D., writes frequently for magazines on topics relating to finance and business management. He is the Publisher of MAKING BREAD magazine.

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