How to Stop Collection Calls, or Not

Obviously, the easiest way to stop collection calls is never give your creditor a reason to call to begin with. Never apply for credit, always pay in cash, or if you do get credit, never get into credit trouble by paying off your credit cards before the end of the month to prevent collection calls. Sorry to disappoint you, but the creditors have a legal right to collect on the debt. There are legal ways to stop collection calls, but unless you file for bankruptcy protection, you will still owe the money.

In the previous article, How to Get Credit I discussed how your ability to receive credit is governed by understanding the credit laws that apply to the credit application approval process. In this article, I would like to discuss one of the laws that govern your creditor's ability to collect money on the debt owed. The last article in the series, How To Stop Creditors From Reporting Your Credit, or Not will discuss the laws that apply to your creditor's ability to report your credit behavior. For information on other credit laws that govern your creditor's ability to collect money see my article, How to Prevent Creditors From Collecting Your Money, Or Not.

One major federal law that governs your creditor's ability to collect money on the debt includes the following:

The Federal Communications Act of 1934 regulates the telephone airwaves. In regards to collection calls it forbids telephone contact "reasonably expected to frighten, abuse, torment, or harass another", or "interferes unreasonably with the use of the service of one or more customers". This act does not prevent collection calls. If you wish to legally stop collection calls, you must write a "cease and desist letter" to your creditor asking that no calls be placed to your home, business, office, or relatives. After receipt of this letter, the creditor is allowed to make one more call to inform you of the status of your account, and to inform you of what legal steps they are planning to take against you. A "no calls letter," also known as a "cease and desist letter" does not prevent legal action, garnishments, judgments, assessments, or that your account will not be turned over to a collection agency. When an account is turned over to a collection agency, it is called a "charge off" or a "write off". A "no calls letter" does not prevent mail to be sent to your home. Keep in mind if you leave the creditor no option to work with you over the phone to collect the amount owed, then the creditor may indeed speed up the legal process. When the account charges off to an agency, the creditor should notify you by mail of the name, address, and phone number of the collection agency. At this point finance charges and late charges will stop accruing, or increasing. The account is then "written off", your original creditor's books, and the collection agency becomes your new creditor. So as you can see, stopping credit collection calls does not erase the debt.

The following kinds of debt collection calls, under The Federal Communications Act of 1934, are prohibited at all times.

A.) Any call placed at a time of day or night designed to harass, i.e. before 8:00 am or after 9:00 pm, local time. Calls on Sundays are allowed. Each individual state may also have laws governing time of calls.

B.)Repeated calls, which are more than one collection call, on the same day to the same location, unless the debtor gives permission for the creditor to call back at a more convenient time during the day.

C.) Calling the place of employment with intent to harass is prohibited. Harassing intent is defined as placing calls to the employer after receiving the "no calls to employment letter", also known as "a cease and desist letter", or placing a call to your place of employment, after the debtor's supervisor requests no more calls.

D.) Calling the debtors relatives and disclosing the debt or frightening small children is prohibited by this act. Disclosing the debt to another without permission from the debtor is called "third party disclosure". This does not mean that the collector cannot leave a polite message with a 12-year-old child or an elderly relative, asking that the customer call back. Swearing and abusive language intended to torment is also prohibited. This use of appropriate language applies to both the debtor, and the collector.

Threats are also prohibited under The Federal Communications Act of 1934. The following are examples of threats that are prohibited. This list is not inclusive, and the act leaves a lot of what makes up a threat up to the courts to decide.

A.) Disclosing or threatening to disclose information about the debt to any third party other than the debtor constitutes a threat, unless the debtor gives permission to do so. Disclosing information to a person granted legal power of attorney, or to an attorney representing the debtor in a bankruptcy court case does not fall under this guideline.

B.) Asserting falsely that a credit report will be hurt is a threat. The key word here is falsely. If a collector asserts that no creditor will ever give you credit again, this is a threat, since the collector has no control over how another creditor interprets a credit report. If a collector asserts that a creditor will probably be reluctant to give you credit at a "good rate", this is not a threat, because good is relevant, and usually creditors offer debtors with poor credit higher rates. Asserting that the creditor reports to a bureau is a threat, only if the creditor fails to report.

C.) Asserting that the legal process will be served is a threat, unless the creditor has a history of serving the legal process, and unless the creditor has taken steps to follow through on the threat by employing an attorney.

D.) Demanding payments for amounts not owed is a threat.

E.) Misrepresenting the terms of the original contract is a threat.

So you can see it is not always in your best interest to stop collection calls, but it is in your best interest to monitor collection calls so that the law is followed.

The enforcement of collection calls falls under The Federal Communications Commission. The U.S. Department of Labor, Wage and Hour Division oversees garnishments. In addition civil lawsuits can be filed for violations of these laws. Criminal cases may result in fines and prison terms.

State credit laws vary from state to state and usually cover collection calls. These calls concern time of day, frequency of calls, calls to place of employment, and no call rules. They also cover annual percentage rate limits, known as usury laws, and garnishment laws. Garnishment laws are enforced by state labor boards, and other state credit laws are enforced by various state boards that differ from state to state.

More information on federal laws can be obtained by contacting The Federal Information Center at 1-800-688-9889. More information on state laws can be obtained by contacting your local state government information center.¹

For the introduction to this series, see How To Understand Credit Laws.

ENDNOTES:

¹Credit Operations Manual, Jewelers Financial Services, Inc. Zale Corporation.