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Things You Should Never Say to a Debt Collector

If you get an unexpected call from a debt collector, here are several things you should never tell them:

1. Don’t Admit the Debt

Even if you think you recognize the debt, don’t say anything. You have no idea if the call is from a real debt collector or whether they are really authorized to collect anything from you. The Federal Trade Commission, Consumer Financial Protection Bureau, and state Attorneys General have filed numerous cases against “phantom debt collectors” who obtain or make up plausible information about supposed debts and contact people to try to get them to pay. The information can be quite legitimate sounding. For example, one case was against a broker of payday and other high-interest loans. People would apply for the loans over the Internet. The broker sold the applicants’ information to “phantom debt collectors.” The “phantom debt collectors” would know that the consumer at least attempted to obtain a loan at a certain time and detailed information about the consumer. Five years after the fact the consumer might actually think they owe money to the caller.

The Fair Debt Collection Practices Act entitles you to a written “notice of debt” stating who is contacting you, identifying the present owner of the alleged debt, and giving its amount. The “notice of debt” also must inform you how to request verification of the debt. We suggest that you exercise that right. A legitimate debt collector will be able to produce account statements, a signed agreement, or other documents showing it is legitimate and authorized to collect the debt. Note that you have only 30 days after receipt of the notice to request verification, which must be done in writing. Keep a copy of all correspondence.

2. Don’t provide bank account information or other personal information

Never give out your social security number, bank account information, employment information, or other personal information. Debt collectors will try to get you to make payment over the phone when they call you, before you have a chance to request verification of the debt. Don’t, unless you are willing to have your bank account drained by the caller or anyone that the caller sells your information to.

If, after requesting verification of a debt, you can see that it is yours, that the collector is legitimate and authorized to collect it, and that the debt is within the statute of limitations, and decide to pay it, you can send an old-fashioned check or money order. If the debt collector does not give you a legitimate street address (not a private mail box) that you can look up on Google Maps and identify with the collector, that is a red flag.

3. Document any agreements you reach with the debt collector

If you decide to make payment, or settle the debt, you need to get everything in writing. The collector should be willing to send a letter setting forth the terms of any settlement or payment arrangement. Alternatively, you can send a letter with your check or money order setting forth the terms and the conditions under which the check or money order can be cashed. Keep a copy. Oral agreements are worth the paper they are written on.

If the debt is on your credit report, ask the debt collector to remove the collection account from your credit report. At the very least, it has to be reported as a paid or settled (as the case may be) debt.