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Money Fix: Handling debt collectors

Just because a consumer is behind in bill

Just because a consumer is behind in bill payments is no reason to take bullying from creditors. The best defense is to learn how to fight back against deceptive or abusive practices. Credit: iStock

It's bad enough when you're overwhelmed with debt, but that doesn't mean you have to take bullying from creditors. Federal agencies like the Consumer Financial Protection Bureau recently have cracked down on debt collectors' unfair, deceptive or abusive practices. You have rights.

Here's how to take on creditors.

Confront the debt collector in writing. Under the Fair Debt Collection Practices Act, you have the right to formally request "debt validation" from collection agencies. The creditor has to document that you owe what they say you do and that they have a right to collect the debt. You must write to request verification within 30 days of being first informed of the debt, says Kevin Gallegos, vice president of credit advocacy firm Freedom Financial Network in Phoenix.

Learn the rules. "When they can't provide substantiation, they must cease collection activity," says John Heath, directing attorney at Lexington Law, a Salt Lake City firm specializing in credit issues. Debt collectors also can't harass or threaten you, make false statements, invade your privacy or lie, says Gallegos. Find out your rights at 1.usa.gov/VTEQ2E.

Take charge. "When a creditor calls, ask for the caller's full name, have them spell it, get their supervisor's name and phone number," says Rakesh Gupta, Adelphi University business school professor. He says to ask them to send full documentation of the debt. Fight invalid claims.

Know too, says Heath, "You have the right to negotiate with a collection agency to settle any debt for less than what you owe."

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