Don’t feel guilty for being suspicious if you’ve been contacted by a debt collector. You should be. Debt collection agencies are notorious for using aggressive practices to get debtors to pay up. Sometimes those tactics can be illegal, and consumers may not know when they are not getting a fair shake.
Here are a few common lies that collectors will tell you to get to your money:
1. “We can’t tell you where the debt originated.”
The collector may say they have limited or no information about the debt other than your name and the debt balance. But you have a right to know where the debt comes from.
Ask for a debt verification letter before you pull out your wallet to pay. Under federal law, consumers are entitled to have a debt validated within five days of their first contact with the collector. The notice should include the name of the original creditor and what you should do if you don’t think you owe the money. The CFPB also provides templates of letters to send to a collector if you think you don’t owe the debt or need more information about it here.
2. “Just make a small payment today and I’ll get off your back.”
This is a common strategy debt collectors may use if they know that the debt they are pursuing is too old. Each state has a statute of limitations on how long a creditor has to seek legal action (i.e. sue) a borrower for an unpaid debt. It varies by state but can be up to 15 years. Once that time has passed, you can’t be sued for a debt, and there really isn’t a legal incentive for you to pay the debt off. The damage has been done to your credit already (it may have even already fallen off your report if seven years have passed) and making a payment will not improve your score.
In fact, it could do the opposite. By making even a $1 payment on an old debt, you essentially restart the clock on your statute of limitations. There’s a reason this kind of debt has been nicknamed “zombie debt.” All of the sudden, you have revitalized a dead debt and you are now vulnerable to lawsuits and other legal actions.
3. “I am an investigator.”
Using the title of “investigator” is an intimidation tactic designed to scare you into paying up. Don’t fall for it. In fact, if the collector says they are an investigator or says that they will call the investigator on your case, get off the phone and report them to the CFPB. It’s illegal for collectors to imply or claim outright that they are anyone they aren’t, such as a federal investigator, attorney, or government representative.
It’s easy to see why this is such an effective tactic. Saying that they are an investigator conveys the sentiment that you have committed a crime, or are about to be arrested, both of which are also illegal for a collector to claim.
4. “Someone is on their way to serve you papers.”
Saying they might sue you could be an empty threat meant to bully you into making a payment. It’s against the law for collections agencies to indicate that papers they send you are legal forms if they are not, so be on the lookout for that.
If you receive any documents that look like a lawsuit, you should check to make sure they are legitimate first. That can be as easy as making a quick phone call. The laws vary from state to state but most debt collection lawsuits are filed in state court. The National Consumer Law Center recommends calling your state clerk's office to confirm that a case has been filed in that court. In some states, you can go online to see if a case has been filed against you.
5. “If you don’t pay, we will have you arrested or garnish your wages.”
Plain and simple, threatening to arrest you, garnish your wages, or seize your property is illegal under federal law. The law prevents trained debt collectors from saying any of those threats or threatening legal action if they don’t actually intend to sue you.
Now, the collections agencies certainly can sue you to collect. And if they win, a judge could allow the agency to garnish your wages. Federal law limits wage garnishment based on your income. If you are sued and the complaint is legitimate, don’t ignore it. If you do, you could forfeit your chance to fight a wage garnishment in court.