Debt Collectors Are Breaking The Law If They Do These 7 Things

Roughly 22% of Americans are currently dealing with debt collectors, according to September 2024 data from the Urban Institute. This means that the anxiety and stress over how to bring debt out of collections is a relatively common feeling that far too many people have or are currently experiencing. Considering the severity of this problem in the current consumer marketplace (with over 70 million Americans experiencing this phenomenon), it might actually be more appropriate to consider debt common rather than as a fringe occurrence, especially within the world of consumer spending and money management.

As debt collection interactions become more common, there are some important considerations to keep in mind. For starters, it's important to know that debt collectors are frequently more receptive to settlement offers than your original creditor might have been. This means you might be able to clear your debt for less than the amount you owe — though it's important to consider what settlement deals might do your credit score. Unfortunately, it's also important to know the negatives of debt collection. Namely, the fact that there are some decidedly nasty things that a debt collector is legally allowed to do in attempting to collect from you. Knowing what collectors can and cannot do will ultimately protect you as you climb out of debt. Here are some of the most important things that debt collectors are not legally allowed to do when they engage with you over a past due financial obligation.

Debt collectors are legally obligated to treat the people they speak with respectfully. Even though the job of a debt collector involves a baseline level of harassment and annoyance in some sense, they must remain respectful at all times and engage in professionalism throughout their interactions. This means that a debt collector cannot insult you or use profane language when speaking to you on the phone or by any other means of communication.

Harassment and abusive behavior can take on many forms, and unprofessional debt collection agents can run afoul of this restriction fairly easily. If you feel that the person contacting you is using demeaning language, or has actively made the choice to use profane language towards you, you should write down the specifics of the interaction and contact the collections company in order to file a formal complaint. If you do end up engaged in a legal dispute with the collections agency, a record of these kinds of unprofessional experiences might work in your favor when seeking more friendly debt settlement terms. However, it's worth noting that because harassment can take on so many different formats within its wide-ranging definition, it can also be difficult to prove.

One specific form of harassment that collections agents are absolutely barred from utilizing is the early morning phone call — as well as the late evening call. Thanks to the Fair Debt Collection Practices Act (FDCPA), federal law actually explicitly limits the times that a debt collector can contact you meaning that collectors are not allowed to call before 8:00 AM or after 9:00 PM. Contact outside of this window is illegal and should be reported to the Consumer Financial Protection Bureau if it occurs. Debt collectors also may not contact you during work hours, but only if you specifically tell them not to. Similarly, collections agents cannot continuously call you in a short span of time and must adhere to a seven day rule in which they can only contact you seven times within a seven day period.

These rules form the basis for what constitutes "inconvenience," but you can generally specify other detailed expectations for how you'll accept (or deny) contact. For instance, you might want to direct all communication through email in order to create a definitive record of each communication. Alternatively, some people may prefer to channel this line of communication through a social media profile. However, remember that debt collectors cannot contact you on social media or post publicly about you in a social media space unless you explicitly grant them permission.

Speaking of public posts, debt collectors cannot publicly discuss your situation or circumstances with others. They are allowed to contact friends and even family members in order to gain more accurate information regarding how to contact you, but within these approaches they are severely limited in what they are able to say and do. Specifically, debt collectors can only ask about your contact information and cannot discuss anything related to the debt they are trying to collect with a person who isn't you, your spouse, or your parent or guardian if you're a minor.

Anything revealing in these communications likely falls back under the umbrella of harassment. Disclosing information about a debt you may owe to someone else can be embarrassing, and therefore the practice is outlawed as a form of abusive and coercive behavior. Once again, if a debt collector has engaged in this kind of practice, taking note of it and considering legal assistance could be a good idea.

Debt collectors cannot lie to you in any way. For instance, they aren't allowed to represent themselves as government agents or lawyers working on behalf of a client. In general, debt collection agents will contact you through one of two approaches. First, they purchase your debt from creditors and seek to recover the obligation as a means of profiting for themselves, or, second, they will contact debtors on behalf of the original creditor (and earn a commission for their service). Knowing the difference can be a big advantage for you as you work to settle a debt. With this in mind — alongside the knowledge of their restriction on lying — one of your first questions should be determining how your debt landed on the desk of the debt collector you're speaking with.

If the debt has been sold, it's important to note that it was purchased by the new owner for pennies on the dollar. Contrary to some popular debt myths, you still owe your debt obligation regardless of the fact it was sold for less. However, you may be able to settle it for a drastically reduced sum as a result of the collection agency's much lower purchase price compared to the obligation's "face value." There are other benefits to knowing that a collector cannot lie to you such as knowing that a collector isn't allowed to suggest you've committed a crime by not paying your obligation — or threaten you with legal action if there is no real intention to follow through.

Threatening language can be experienced in a variety of ways. The empty threat of legal action mentioned above is just one feature of this prohibited activity. A common refrain in videos and stories detailing interactions with scammers involves the threat of calling the police. Scammers looking to steal people's money will frequently tell unsuspecting victims that they have a short window of time to make good on the obligation they're trying to establish. These scammers frequently threaten to involve the police if you don't pay within this timeframe, suggesting that the cops will come directly to your home to arrest you. Debt collectors can sometimes take a page from this scammer rule book. 

However, threatening police involvement is just one in the plethora of threats that a debt collector cannot legally levy against you. While it's true that a creditor can take legal action against you if you fail to pay your debts, owing money to someone is not a criminal act on its own (unless you're dealing with intentionally defrauding someone). Threats have no place in the interaction that you might have with a legitimate debt collector. If you are threatened with action like this it's worth knowing that this threat is not only not legal behavior, but also that it's an empty assertion without other legal steps being taken first.

Another action that a debt collector cannot take against you is one — that will surely instill confidence and a sense of relief in those who have received emails, calls, or letters about their debt obligation — is charge additional fees. Debt collectors can only charge you up to the stated amount that you owe, unless explicitly authorized by laws in your individual state. This means that while there might not be a specific fee prohibition law in your state, collector's still don't have the right to charge them unless they are expressly granted permission.

Added fees and other charges are sometimes known as pay-to-pay fees. These can include things like "convenience fees" for paying online or charges relating to contacting you through your preferred method. Debt collectors also cannot impose added interest onto your debt or tack on service fees for managing the debt. While you still might find yourself on the hook for your total debt amount, depending on your particular collections agency, you should find some solace in the fact that your debt collector is not legally allowed to increase the burden you owe in any way.

If you ask for a verification of the debt that a debt collector claims you owe, they must provide it. Failure to do so indicates that the debt is potentially illegitimate. More importantly, a failure to provide this verification — alongside one or more of the above mentioned practices — can indicate a different kind of problem than one associated with problematic debt. If you find yourself dealing with an unprofessional debt collections agent, and one who refuses to provide verification of the debt, it's possible that you are actually speaking with a scammer.

This problem speaks to the very heart of why many of these consumer protections policies are in place. Not only is an unprofessional debt collector unlikely to foster goodwill from the person they are trying to collect money from, but this behavior also fails to mark them as legitimate collection entity. Fake collection scams are a real problem for consumers, and they can take many forms. The best way to ensure the person you are talking to is legitimate is to request a debt verification letter. This, along with keeping your eyes peeled for any of the illegal behaviors previously mentioned can and will help you judge whether you're dealing with a genuine repayment obligation or a scammer looking to steal your hard earned cash.