How to Overcome High-Pressure Credit Card Debt Collection Tactics (Part 2)

By Gerri Detweiler and Mary Reed, CardRatings.com Reporter

Editor's Note: This article is the second of a two-part series on debt collection.

Calling Debtors At Work

If a debt collector calls you at work and you tell him that you can’t talk to him when you are on the job, he must stop contacting you there immediately. Also, if a debt collector calls you at work, he can’t tell your coworkers or boss that he is trying to collect a debt that you owe. Yet 8,092 consumers complained about this practice last year.

How to fight back: If you tell a collector not to call you at work, it’s a good idea to follow up that request in writing. If the collector continues to call you on the job or if the collector discloses your debt to your employer and/or people you work with, contact a consumer law attorney to find out whether you can take legal action.

Disclosing Your Debts To Others

Recently, a caller on a talk radio show described how a debt collector called her and told her to go knock on a neighbor’s door and tell that person to answer their phone when the collector called! But debt collectors are not allowed to tell anyone else about your debt unless that person is your spouse, a cosigner on the debt, or an attorney.

The only reason a debt collector can contact your neighbors or co-workers is to find out how to locate you – and even then the collector can’t indicate that you owe a debt. Once the collection agent finds out how to reach you, his calls to other people should stop.

Consumers filed 6,949 complaints about this type of illegal behavior in 2008. The FTC warns that this practice is especially serious because it can put a consumer’s personal and professional life in jeopardy.

How to fight back: As embarrassing as it may be, if a neighbor or family member is being improperly contacted about a debt that you owe, ask that person to take notes about the call using your Collector Contact Worksheet. Then call a consumer law attorney for advice about what to do next.

If you are dealing with collection agencies, it is important to know your rights so you don’t make bad financial decisions under pressure. Remember there are rules that collectors must follow when collecting debts and they are breaking the law when they don’t. They will often ease up when they realize you know your rights. If you can level the playing field by becoming more informed about your debt collection rights, you’ll be able to find a solution that allows you to put your debt problems behind you.

What do you think about the tactics discussed in this article and other debt collection practices? Would love to see your comments and questions on our active credit card forum.

Also, on a related note, if you are currently struggling with any type of consumer debt, then consider using the services of DebtGoal.com, the first free online debt management system.

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Gerri Detweiler and Mary Reed are the co-authors of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. The California edition of Debt Collection Answers is also co-authored by consumer law attorney Robert Brennan.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!

How to Overcome High-Pressure Credit Card Debt Collection Tactics (Part 1)

By Gerri Detweiler and Mary Reed, CardRatings.com Reporter

Editor's Note: This article is the first of a two-part series on debt collection.

On a recent Dateline NBC investigation, debt collectors posing as law enforcement officers were captured on tape illegally threatening debtors with immediate arrest if they didn’t pay up. Unfortunately, complaints about high-pressure debt collector tactics are continuing to generate numerous complaints to state and federal regulators, and with the slow economy the problem is likely to get worse. In 2008, some 78,000 consumers filed complaints with the Federal Trade Commission (FTC) about collection agencies.

Fortunately, a fairly strong federal law, the Fair Debt Collection Practices Act, offers important consumer protections for those who are having trouble paying their bills. So, it’s important to know your rights in case a debt collector crosses the line with you.

Here are the top high-pressure tactics that have generated complaints to the FTC in 2008 and how to fight back against them:

Demanding Too Much Money

Debts can mushroom once they are turned over for collections. In fact, 25,644 consumers complained that debt collectors were charging them much more than they owed, or trying to collect debts they weren’t entitled to collect (for example, debts discharged in bankruptcy.).

How to fight back: Debt collectors are not allowed to ask you to pay more than the amount of your original debt, unless fees or interest are legally allowed under state law. Unfortunately, because many debt collectors don’t itemize interest and fees when they bill consumers, it can be hard to tell whether a debt collector is charging you too much. However, you have the right to demand that debt collectors provide you with written validation of any debt they say you owe. If you think the amount they are charging you is incorrect, dispute the debt right away and ask for documentation. Send your dispute by certified mail with a return receipt requested.

Harassing Debtors

Debt collection harassment is illegal. Some examples include repeated or incessant phone calls, as well as threats or abusive language including profanity, or the use of racially insensitive terms.

Last year 27,382 complaints of this type were filed, including 10,610 from consumers who said debt collector used abusive or obscene language. Many consumers also complained that debt collectors called them before 8:00 am or after 9:0 pm, which is generally illegal.

How to fight back: Keep a written record of every call you receive from a debt collector. Record what was said, by whom, and when. You’ll find a free Collector Contact Worksheet you can download at DebtCollectionAnswers.com. Your notes can be invaluable if you decide to take legal action against a debt collector.

Verbal Threats

It is not unusual for collectors to threaten consumers with all kinds of dire consequences if they don’t pay. But debt collectors aren’t allowed to threaten to take action they can’t take, or don’t intend to take. 11,787 complaints were filed by consumers in 2008 relating to this type of conduct.

For example, a collector cannot threaten a consumer that she will go to jail if she doesn’t pay a past due debt, unless that is truly a consequence of not paying. We don’t have debtor’s prison in America, and you generally can’t be arrested simply because you are not to pay your credit card bills!

And before collectors can garnish your wages or seize your bank account to pay a debt, they usually must file a lawsuit against you and receive a court judgment in their favor. (Wage garnishment for debts owed to creditors is not legal in North and South Carolina, Pennsylvania and Texas.) In some cases, even threatening to ruin your credit can be illegal!

How to fight back: Take notes about your conversation with a debt collector and if he does threaten to take action against you, find out whether he has the legal right to do what he says he is going to do. Your state attorney general’s office or a consumer law attorney can help.

What do you think about the tactics discussed in this article and other debt collection practices? Would love to see your comments and questions on our active credit card forum.

Also, on a related note, if you are currently struggling with any type of consumer debt, then consider using the services of DebtGoal.com, the first free online debt management system.

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Gerri Detweiler and Mary Reed are the co-authors of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights. The California edition of Debt Collection Answers is also co-authored by consumer law attorney Robert Brennan.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!

Help With My Credit Rescues Debtors from Credit Card Debt

By Michael Killian, CardRatings.com Reporter

Editor's Note: This article is an interview with Joe Ganley, a spokesperson for Help With My Credit.

Daily, the economy seems to become more and more difficult to deal with. Consumers across the land are screaming for aid in dealing with their credit load. Major banks have joined forces to offer consumer help. Despite what some consumers think, it is in your card company's best interest (no pun intended) to keep you from becoming seriously deliquent. If you are struggling to deal with your debt, this service might be a flotation device for survival in a sea of excess obligation.

Joe Ganley is a spokesperson for Help With My Credit and offered some information about how this site provides assistance.

Mike: What is Help With My Credit all about?

Joe: Help With My Credit is a resource provided by leading credit card issuers and payments networks to raise awareness and educate consumers struggling to make their credit card payments about assistance available to them.

The companies participating in Help With My Credit have joined together to make it easier for consumers who are unsure about where to turn for help to access tools and information that can help them get back on track. These credit card issuers and payments networks understand that many consumers are unaware of resources available to assist them in managing their credit.

Currently, companies participating in Help With My Credit include credit card issuers Bank of America, Capital One, Citi, and Discover Card, in cooperation with payments networks MasterCard and Visa.

Mike: How does it work?

Joe: Help With My Credit features a toll-free phone number (1-866-941-1030) that informs consumers about sources of payment assistance, such as specialized customer service representatives within individual credit card issuers, or accredited credit counseling agencies. It also includes a website, HelpWithMyCredit.org, where consumers can find helpful information about how to manage their credit cards, better communicate with their credit card companies, and identify and speak with an accredited credit counseling agency.

Mike: Are you aware of the affect it is having?

Joe: Since launching the Web site and toll-free hotline in mid February, we have received a steady volume of calls and visits. It is still too early to know the full affect of the program, but indications are very positive.

Mike: There is a learning center at your site. Can you talk a little about that resource?

Joe: The Help With My Credit Web site is designed to offer consumers a wide range of helpful information in one place that can help them understand how to take the next step to deal with their specific credit issues. It also includes information about how to manage credit cards wisely, communicate effectively with credit card issuers, and, if needed, determine how to identify and speak with an accredited credit-counseling agency.

Mike: Is there anything you would like to add?

Joe: Just to reiterate that these credit card issuers and payments networks understand that many consumers are unaware of resources available to assist them in managing their credit. The goal of Help With My Credit is to make it easier for consumers with credit card problems to access tools and information that can help them get back on track.

Here is my viewpoint on this topic. As a consumer advocate, I am natually skeptical any time I hear about card issuers wanting to help consumers. But, we do live in some very unique and trying times. I do think that card issuers are starting to understand that if they don't reach out to their customers, that things are only going to get worse for them. Whatever the motivation, though, HelpWithMyCredit is another consumer resource that I think folks struggling with debt should try to take advantage of.

What do you think about this service and credit card debt issues in general? Would love to see your comments and questions on our active credit card forum.

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This article was written by Mike Killian, Founder of Learning Credit and Debt Management. Mike has been writing about credit and debt management issues that are of importance to consumers for over 8 years. His articles have been referenced by various members of the media, including MSNBC and The Motley Fool. Mike has also offered debt elimination seminars to businesses and community colleges for many years.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!

Student Credit Card Tips for Parents (Part 4)

By Curtis Arnold, CardRatings.com Founder

Editor's Note: This article is the third in a four-part series containing consumer tips for parents of children and young adults.

I often speak on college campuses, and here’s what I tell the students: I know first-hand about the dangers of getting into credit card debt while you’re in school. Before I turned my life around, I had $45,000 in card debt and was under unbelievable stress. You probably have a credit card already, and if not, you will likely get one soon. Certainly, if lenders get their way, you’ll have a pile in your pocket by the time you graduate!

Three out of every four college students had at least one card in 2004, with the average freshman balance at $1,585, while many students maxed out their cards entirely, according to Nelliemae, the largest nonprofit provider of student loans. The typical undergrad card balance was $2,169, although newer estimates put it closer to $3,000. According to a recent poll, one in four college students has two to three credit cards, and nearly one-third say it’s difficult to keep up with expenses because they’re already in debt.

Card issuers spend millions each year aggressively marketing on campuses because they want to develop long-term financial relationships with you. Here are my tips for making the most of the situation:

1. Compare offers by reading the terms and conditions carefully. Choose the best card for you, regardless of the freebies. Ask for a low credit limit (around $500) so you won’t be tempted to charge more than you should, and steer clear of reward cards until you know you can use credit responsibly. (Studies show we charge more with them.)

2. Always pay your bills on time – not to do so means you’ll pay fees and a higher interest rate – potentially on all your debts. A spreadsheet can keep you organized and on time with your payments. If you might forget, consider signing up for automatic bill-paying.

3. Always pay off your balance. The first month you don’t, stop using your cards! Use only cash or a debit card until you’re sure you’ll use your cards responsibly.

4. Don’t use your card as a source of income. Take it from me, I know first hand how devastating this can be. Credit is a privilege, and it’s your responsibility to make sure it doesn’t become a peril and ruin your credit reports and credit scores.

5. Keep out of the malls, avoid impulse buying and focus on free activities – join campus organizations, volunteer for local nonprofits, take a hike . . . or you can always get a job.

6. Take a personal finance course ASAP. What you learn will be more important and practical for your future than what’s covered in most classrooms. Also, keep on top of credit news, so you’ll be aware of industry practices. For example, lately, banks have been lowering people’s credit limits.

7. Already in debt? Stop charging and always pay more than the minimum. If you’re carrying a balance on more than one card, you’ll save the most if you pay off the one with the highest rate first, then go to the next highest interest card, and so on.

8. Get help if you’re buried in debt. Not facing financial problems won’t make them go away. Talk to your family, a clergy member, a credit counselor (NFCC.org lists reputable counselors), someone on campus – anyone you trust who can help you figure things out.

Not to worry! Since you’ve already educated your kids about credit and debt, you won’t have to worry about problems like this when they’re off at college, right?!

To sum things up, giving credit to teens can be a double-edged sword. If handled properly (a good dose of parental involvement goes a long way), credit can really empower your teen and help your teen establish a firm financial footing. On the flip side, improper use can have a devastating financial impact on your teen and scar him or her for many years.

Given the importance of credit scores in our society today (a bad score can even prevent your teen from getting a job), I implore you take the initiative and help your teen develop positive credit habits. If you don’t, I can assure you your teen will likely be fighting a losing battle…one that all too often has deadly consequences. Good luck- you can do it!

You can also visit our student credit cards section to research the best student cards!

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This article was written by Curtis Arnold, a nationally recognized consumer educator and advocate. Curtis has been educating consumers about credit cards since 1998. He is regularly interviewed and quoted by respected members of the national press regarding consumer credit issues. His new book, How YOU Can Profit from Credit Cards: Using Credit to Improve Your Financial Life and Bottom Line is available now! Order online and receive up to a 32% discount.

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CardRatings.com is the most comprehensive source for comparing credit card offers. CardRatings.com is pleased to offer consumers free credit card ratings.

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Please Note! You are welcome to republish this article as long as you state that CardRatings.com is the source for the article. You must also include a link to our website if you republish the article online. Click here for more details about using our articles and thank you for your interest!