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Your rights and how to use them

Under the Fair Debt Collection Practices Act, collectors are supposed to advise consumers that they have a right to dispute the debt, but that if consumers don't do so promptly -- and in writing -- the collector can assume after 30 days that the debt is valid.

Once collectors are notified that they've contacted the wrong party or that the consumer denies owing the debt, the companies are supposed to provide proof of the debts' validity. If they can't supply the proof, collections are required by law to cease.

Of course, some collectors simply ignore laws designed to protect consumers. But debt experts say your chances of getting a collector to back off improve when you know your rights and assert them forcefully.
If you're contacted about a debt you don't owe:

  • Know your rights. The Privacy Rights Clearinghouse has prepared a fact sheet for consumers dealing with third-party debt collectors.

  • Get the name of the collector, its address and a telephone number. You can tell the collector on the phone to stop calling, but that won't preserve your rights under federal law.

  • Send a certified letter, return receipt requested. Make it clear the collector has contacted the wrong party, that you don't owe the debt and that you don't want to be called again.

  • Contact regulators. If the collector continues to call, seek help. Typically, your state's attorney general's office handles complaints against collectors. You can also complain to the Federal Trade Commission, which typically doesn't intervene in individual cases but may act if it sees a pattern of abuses.

  • Monitor your credit reports. If a collection agency posts a bogus debt on your credit report, dispute the item immediately with the credit bureaus. Include copies of the certified letter you sent the collector and any complaints you filed with regulators. Don't wait until you're about to apply for a loan to check your credit report; you'll want at least a few months' head start to dispute any errors.

  • Consider a lawsuit. Consumers can bring lawsuits against collectors that violate the Fair Debt Collection Practices Act, either on their own behalf or as part of a class action. Contact the National Association of Consumer Advocates for referrals to attorneys who handle such cases.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board.

To find out how AlanAssociates can help you, call us on (0414)78 1639 or complete our quick Contact Form.

 

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