What to know when you owe

With the economy on the fritz and consumer debt at record-high levels, does it surprise you that debt collection complaints are on the rise?

The Better Business Bureau logged 18,000 complaints in 2007, up 26 percent compared with 2006; the Federal Trade Commission logged 70,951 in 2007, up 2.5 percent.

Given that there are millions of contacts made by collectors each year, those numbers don't sound terribly high. But what if you're the one being harassed? Being sworn at and called names? Humiliated at work by collectors looking for you?

Some tips for dealing with debt collectors:

Don't ignore them. Failing to respond after several weeks can become an admission of guilt. If you have any doubts about what a document means, contact a consumer attorney through the National Association of Consumer Advocates ( If you have questions about any of your rights, and you probably will, consult with an attorney well-versed in collections law.

And take careful notes of your conversations, suggests consumer attorney Sam Glover, whose is loaded with tips.

Know your rights. Under the Fair Debt Collection Practices Act, a debt collector can't swear at a debtor or make false statements designed to bully someone into paying.

Making threats about “dire consequences,” such as arresting someone for failure to pay debts, taking away their house or ruining their reputation are no-nos. So are phone calls made at inconvenient times or places, or calls at work if it's known that the employer doesn't allow them.

Collectors must also stop contacting a debtor who writes a letter telling individual creditors to cease communications. But that won't stop them from potentially filing a lawsuit in an attempt to collect a debt.

Read the act's fine print at /credit/cre27.pdf.

Be careful what you say. When collectors call, they will read you your “mini-Miranda” warning – “This is an attempt to collect a debt and any information obtained will be used for that purpose” – and try to collect as much information as possible. They'll try for work details, bank account information, even Social Security numbers – to help them keep tabs on you and your money.

Don't give out your Social Security number or your financial details unless you are ready to claim the debt and set up a payment plan you can afford. And never promise a payment you can't make, said Tara McCarthy, executive director of the financial counseling nonprofit Financial Rehabilitation Inc.

If it's not your debt, don't pay. If you don't owe the dough, send the collection agency a letter within 30 days of receiving that first notice saying it's not yours in order to stop the collector from contacting you again without proof of the debt.

Harassed? File a complaint. If you're being harassed, tell the Federal Trade Commission ( or 1-877-382-4357), the Better Business Bureau ( or your state's attorney general's office. The American Collectors Association ( is the national trade group for third-party collectors.

The association also investigates ethics complaints about its members because there is a “very, very real need for debt collectors to take the public's perception of the industry very seriously,” said Rozanne Andersen, general counsel for the association.