Stop Those Harassing Debt Collectors

Once the letter is received, the collector may contact you only for one of two reasons: to confirm there will be no further contact or to notify you of specific action, such as the filing of a lawsuit.

Just keep in mind that sending a no-contact letter doesn't rid you of the debt; it just puts the collector on notice that you should not be contacted any further.

Contact With Others: A debt collector must contact your attorney if you have retained one. If you do not have an attorney, the debt collector may contact others -- but only to find out how to contact you. A collector is not permitted to discuss your debt with anyone other than you, your spouse or attorney.

Written Notice: A debt collector must send a written "validation notice" informing you how much money you owe within five days of first contacting you. This notice should contain the name of the creditor to whom you owe money and what to do if you don't believe you owe the money.

Prohibited Practices: The Fair Debt Collection Practices Act bans a number of practices. These include harassment, abuse and threats of violence or harm.

For instance, a debt collector may not use obscene language, repeatedly use the phone to annoy someone or publish a list of names as a means of embarrassing someone who has not paid a debt.

Also, a debt collector may not lie when trying to collect a debt, threaten you with arrest or give false information about you to someone else.

Advice: Know the Law

In your friend's case, P.E., I would suggest the best defense against the practices you described is a thorough knowledge for the Fair Debt Collection Practices Act and a letter to the collector asking for no more contact, as explained above.

To learn more, check out the Federal Trade Commission publication "Debt Collection FAQs: A Guide for Consumers." It can be found at www.ftc.gov.

You can also consult the National Association of Consumer Advocates, www.naca.net, which has a section on debt-collection practices on its Web site.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

David McPherson is founder and principal of Four Ponds Financial Planning in Falmouth, Mass. He previously worked as a financial writer and editor for The Providence Journal in Rhode Island. He is a member of the Garrett Planning Network, whose members provide financial advice to clients on an hourly, as-needed basis. Contact McPherson at david@fourpondsfinancial.com.

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