Better Business Bureau offers advice on handling debt collectors

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Burnsville, MN — Consumers who owe money or are behind on their bills may legitimately be contacted by debt collectors. However, the Better Business Bureau of Minnesota and North Dakota (BBB) is reminding consumers to be aware of their rights and also providing some tips on best practices when it comes to handling debt collectors.

Debt collectors seek to reclaim funds on past-due accounts on behalf of creditors, businesses or individuals. But sometimes debt collectors go too far, or in some cases even turn out to be an identity thief trying to get you to divulge personal or financial information, such as your Social Security, bank or credit card numbers.

“Consumers need to be clear on what debt collectors can and cannot do,” said Dana Badgerow, president and CEO of the BBB of Minnesota and North Dakota. “If the caller is abusive or refuses to reveal the name of their organization, people need to report this type of behavior.”

When you’re contacted by a debt collector, the BBB recommends that you:

Know your rights. Review the federal Fair Debt Collection Practices Act (FDCPA), which sets standards for collection agencies and prohibits abusive tactics. The FDCPA is enforced by the FTC and violations should be reported. Debt collectors:

  • Cannot threaten you with arrest.
  • Are not allowed to make idle threats, express or implied, or use abusive language.
  • Should not discuss consumers’ accounts with unauthorized third parties.
  • Must investigate the validity of a dispute over a debt.

Verify the legitimacy. Get the debt collector’s name as well as the name of their company to research the collection agency further. See if they have a website or a Business Review at Verify that the representative who called is affiliated with the collection agency. Also, make sure the company is licensed to do business in your state. In Minnesota, collection agencies have to be licensed by the Minnesota Department of Commerce; in North Dakota by the Department of Financial Institutions.

Request written proof. By law, a collection agency must provide a validation notice within five days of contacting you about the debt. Within 30 days of receiving their validation notice, send the debt collector a written request to verify the details of the debt.Do not provide personal or financial information until the validity of the debt and the debt collector has been confirmed. If the debt cannot be verified or if requested documentation isn’t provided, be extremely wary.

Don’t ignore the collector. It is best to respond immediately, even if you don’t believe the debt is yours. Otherwise, the collector may continue contacting you or file a judgment.

Do not claim a debt that isn’t yours. Making a payment on a bill just to make the collector “go away” is a bad idea. Even making just one payment can indicate that you are accepting the full responsibility of the debt. The invalid debt could also reflect as a liability on your credit report.

Contest errors. If no debt is confirmed, contact any involved parties to clear up possible inaccuracies on your credit report, such as: the debt collector; the creditor or company claiming unresolved accounts; and the major credit bureaus.

Check for identity theft. If you’re contacted by a collection agency regarding erroneous bills or debts, it could be an indication of identity theft; an imposter may be using your identity to make purchases, open accounts or obtain credit. Review your credit report to identify fraudulent activity. Visit for a free yearly credit report and visit the FTC’s website for advice on Resolving Specific Identity Theft Problems relating to debt collectors.

Know your responsibilities. It is not against the law for a debt collector or creditor to contact you regarding unpaid debts. Try working with them to resolve issues. Discuss the possibility of a payment plan and request obligations in writing.

Stop intrusive collector calls. According to federal law, a debt collector cannot continue to contact you – at work or home – if you tell them to stop. Write a letter stating not to contact you anymore. Save a copy of the letter then send the original via certified mail and request a return receipt. If a debt is owed, the collector or creditor can still take legal action to collect funds and may contact you to apprise you of their action.

Report Scams: Debt collection victims can file complaints with the:

  1. Better Business Bureau
  2. Federal Trade Commission.
  3. State Attorney General’s Office and other local consumer affairs agencies.
  4. American Collectors Association (ACA International) processes complaints on its member debt collectors; find out if the debt collection agency is a member.

The mission of the Better Business Bureau is to be the leader in building marketplace trust by promoting, through self-regulation, the highest standards of business ethics and conduct, and to instill confidence in responsible businesses through programs of education and action that inform, assist and protect the general public.

BBB hours of operation are 8 a.m. to 5 p.m. Monday through Friday. Contact the BBB at or 651-699-1111, toll-free at 800-646-6222.


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