By: Robert J. Nahoum
1. Collection Agencies collecting a debt for someone else like a credit card company or a hospital;
2. Debt buyers who buy up old debt from someone else for pennies on the dollar and then collect for their own pocket;
3. A debt collection law firm representing a debt buyer or an original creditor; and
4. An original creditor collecting its own debt.
The first three debt collectors must comply with debt collections laws (the FDCPA) but the fourth is exempt (although depending on your state there may be state laws with which they must comply).
So how do you know who is who? Ask them! Don’t be afraid to ask that pushy debt collector on the phone who he is and who he works for. Of course, he’d rather talk a about how you’re gonna pay that old credit card or hospital bill but you make sure he explains to you who he is and who he is working for. Term of art – tell him to “verify the debt”. Don’t stop there, ask him for the account number and his address, then send him a certified letter (return receipt requested) providing the account number and ask them again to “verify the debt.”
If a debt collector violates the FDCPA, you can sue for statutory damages up to $1,000.00 plus actual damages (like pain and suffering) and your attorney’s fees. In FDCPA cases, a good consumer lawyer won’t charge clients a penny out of pocket.