Debt collection agencies have a bad rap for a reason – most of them have absolutely no regard for consumer rights, are abusive to consumers, and screw up consumers’ credit.  However, there are some important legal loopholes that protect consumers’ rights.

As an ex-employee of one of the largest collection agencies in the world, I got to see the down and dirty business of the collection companies’ practices. Instead of working the floor harassing debtors, I was in the Compliance Resolution department writing form letters to consumers.

My entire department revolves around keeping the company from getting fined too badly per the Fair Debt Collection Practice Act (FDCPA) and the Fair Credit Reporting Act (FCRA), two federally mandated acts that protect consumer rights and give you control of your debts.

Firstly, it is always better to work directly with the company that you owe than it is to work with the collection company. This is true for a few reasons: The older the outstanding balance, the more likely the crediting company would want to settle for a lower amount. I’ve seen creditors settle for 35% of the original balance, just glad to get something out of the debtor. Secondly, if you have to have a black mark on your credit report, it would be much better to have a delinquent status from the creditor as opposed to the collections company. The whole point of collection companies is to work accounts either on the behalf of the creditor (meaning attempting to collect the debt) or to buy up the debt (at a fraction of the outstanding balance) and collect on their own.

In my opinion, because of all the numerous errors in credit reporting and posting payments, it is reasonably dangerous to do business with collection companies. I have seen more than one payment get lost, misplaced to the wrong account, or credit reporting not being updated after the account is paid up. I have my own theories as to why there are so many errors in collection companies, mostly having to do with abhorrent business practices and treatment of employees, but bashing company policy is not the point of this article…maybe in a follow-up article. 😉

So, say you get a phone call from a collection company, demanding payment for a debt that you either do or do not know about. What rights do you have as an American consumer?

Per the FCDPA, any collection company who attempts to collect on a debt must validate the debt upon request. Validation can be anything from a set of Macy’s statements, a doctor’s bill, or a cable company who “forgot” to disenroll you from the 30 free days of cable program and charged you an arm and a leg for the free service. Most importantly, the FDCPA has a cease and desist clause. If the consumer states either in writing or verbally, “Do not call me or contact me regarding this debt,” the collection company is not allowed to continue to collect on the debt until validation has been sent to the consumer.

In addition to the FDCPA, the FCRA works to get collection companies off of your credit report.  According to the FCRA, continued reporting to the credit bureaus regarding this debt is considered to be actively collecting on a debt.  Therefore, just to put all the pieces together, if the consumer requests the collection company to cease and desist all collection activity, the collection company cannot call (defined as making the phone ring on the other end, therefore automated messages are unacceptable), send demand letters, or continue to report on the consumer’s credit report until they validate the debt.  This must be done within 30 days if the debt is currently being reported to the credit bureaus. If the debt is not being reported on the consumer’s credit report there is no actual deadline as to when the debt needs to be validated, but will usually within 2 months and the cease and desist clause applies.

Once the consumer receives validation in the mail, you still can get the collection agency off your back. You could on the onset state that you do not work with collection companies and demand that they return the account to the creditor (since the collection company doesn’t have any actual contract to do business with you). Or, dispute the debt a second time. Send in another letter of dispute within 30 days and the company has to delete it. If you say that you still dispute this debt, that the amount isn’t correct, that this is the wrong person, that you don’t believe that you owe this, the collection company by law has to return the account to the creditor and delete all credit bureau reporting. You should get a letter in the mail that says that the account is closed and the credit reporting has been deleted.

If the collection agency still gives you a hard time after you invoke your rights under the FDCPA, you do have other options to take control of your debt.  I also spent some time working with the attorneys for the collection company I worked for, whose main concern was to respond various state’s Attorney Generals and Better Business Bureau complaints.  The AG’s and BBB’s can fine a collection company for misconduct.  This is always an option for a consumer who is not getting an answer from the collection company, or if they would rather have someone else do the dirty work without hiring an attorney of their own.  These regulatory agencies DO put pressure on the collection companies, usually unearthing some collector misconduct which the collection company’s attorneys must cover up with vague verbiage to avoid fines. In this way, the consumer usually gets what he or she wants.  Most of the complaints I saw were of mistaken identity, ineffective skiptracing techniques, or debt that was never validated after it was requested.

Again, the incompetence of the employees at company I worked for was staggering; I wouldn’t leave my credit reporting in their hands.  Here are some helpful links to get you started on your cease and desist letters:

Good resource for more in-depth information regarding the legalities of the law and what should be in your letter:

Information about the FDCPA and recent articles regarding its enforcement:

So that’s basically it.  Please feel free to comment if you have questions or if I was able to help you out.

As an added bonus, my favorite pastime at work was compiling a list of ridiculous names and places.  Enjoy some of my favorite gems (some portions of names have been changed to help protect anonymity, but not enough to stifle giggles):

  • Mike Quackenbush
  • Christine Smellie
  • Saad Butt
  • Unique Blow
  • Lai Fong Winky Wong
  • Rip N. VanWinkle
  • Titus Dipfurd
  • Stella Dong
  • Gary Gray
  • Jose Cuervo
  • Misty Sweat
  • Donga Kpanza
  • Justin A. Shoestring
  • Goliath Davis
  • William Surgeon (Signed “Willie”)
  • Teresa Hooker, occupation: “Homemaker”
  • Dusty Knavel
  • Rush Forward
  • Joe Lickers
  • Tangy Bacon
  • Albie Damm
  • Mark Roudybush
  • Mike Hunt
  • Cherrie Aereola
  • Ginger Areas
  • Love Leigh Johnson
  • Rush Forward
  • Scott Trott
  • Kelly Queeflander
  • Geydhar Coiscou
  • Phat Dihn Ho (A legendary name on the collection floor…)
  • Alienor McCracken


  • Soddy Daisy, TN
  • Maybee, MI
  • Peculiar, MI
  • Eagle Butte, SD
  • Blacklick, OH
  • Chris Crossing, Ellenwood, GA
  • Fite Avenue, Defeated, IL
  • Chicatawbutt Street, Dorchester, MA

Melissia Elisa is a listener from Philadelphia and contributing writer for