Debt collection is big business in the U.S. and generates more complaints to the Federal Trade Commission than any other industry. If you owe money, the creditor may hire a debt collection agency. Some debt collectors are real. Some, however, are scammers threatening Texans with debt they do not owe.

Knowing how to handle debt collectors so you can assert your rights and choose the best way to manage your debt is important. If a debt collector contacts you, before saying anything or making any payments:

1. Gather the facts
2. Contact your attorney
3. Know your rights

Debt collection tactics can be annoying, predatory, or even illegal. Under Texas law, debt collectors are prohibited from:

1. Contacting you if you are represented by an attorney
2. Harassing you into making payments
3. Lying to you

More specifically, debt collectors are regulated under the federal Fair Debt Collection Practices Act, and the Texas Debt Collect Act. These laws generally prohibit:

• Harassment – Debt collectors may not harass, oppress, or abuse you or any third parties they contact. This includes threats of violence or harm, obscene or profane language, using the telephone to harass debtors by calling anonymously or making repeated or continuous calls.
• False statements – Debt collectors may not use any false or misleading statements. This includes misrepresenting the amount of your debt, using a false name or identification, misrepresenting the amount of the debt or its judicial status, sending documents to a debtor that falsely appear to be from a court or other official agency, failing to identify who holds the debt, misrepresenting the nature of the services rendered by the collection agency or the collector, falsely representing that the collector has information or something of value in order to discover information about the consumer.
• Unfair practices – Debt collectors may not engage in unfair practices when they try to collect a debt. This includes trying to collect any amount greater than your debt, threatening arrest of the consumer, or repossession or other seizure of property without proper court proceedings, falsely accusing the consumer of fraud or other crimes, making collect telephone calls without disclosing the true name of the caller before the charges are accepted.

Scammers, on the other hand, use intimidating and unscrupulous tactics to collect fake or old uncollectable debts. The scam begins by someone contacting you—by phone, text, mail or email—claiming you owe a debt. The debt may be fake, canceled, discharged, forgiven, or beyond the period for collection. Before you pay any debt to any collector, identify whether the debt is real or fake. You can do this by obtaining a free credit report at www.annualcreditreport.com.

Even if the debt appears real, that does not mean the debt collector is legitimate. The following are ways to identify fake debt collection:

• They Ask for Info They Should Already Have – Real debt collectors already have your information. But debt collection scammers, may not. If the collector doesn’t seem to know enough about you, they’re probably a scammer.
• They Won’t Share Their Info with You – Whenever someone tries to collect a debt, ask for all of their company’s information, including:
  • The collector’s full name
  • Company name, address, phone number, website, and email

Then, send a letter by mail asking them to confirm their debt in writing. If they refuse to answer all of your questions, it’s likely a scam.

• They Threaten or Lie to You – Remember, under the Federal Debt Collection Practices Act and Texas Debt Collection Act, debt collectors are prohibited from lying, harassing, and using unfair collection methods.
• They Insist You Pay Right Now – Scammers survive by getting people to pay fake debts before they have a chance to realize they’re being scammed. So if a debt collector demands you to pay immediately, be very cautious.
• They Ask You to Pay by Untraceable Methods – Scammers often insist you make a payment by Visa gift card, iTunes gift card, wire transfer—or some other untraceable method. Real debt collectors, on the other hand, will accept normal, trackable payments (e.g., check, traditional credit card, etc.).

Violators of the Texas Debt Collection Act are subject to criminal and civil penalties. If you think you have been harassed or deceived, you can file a formal complaint with the Federal Trade Commission and/or Texas Attorney General’s office, and even seek injunctions and damages against debt collectors. You can also inform the major credit report agencies and ask them to place a fraud alert on your credit report.

Remember: Some Debt Collection is Legitimate

If you owe money, try to work with the creditor before it’s sold to a collection agency. If you owe money and debt collectors are contacting you, remember you have rights as a consumer and real debt collectors still have to obey the law. If you have any questions or are struggling with debt, feel free to contact us for more information on debt relief options.