In some cultures, worshipers are pierced with hooks and suspended from the hooks in mid-air to show their devotion to a specific deity. In our own culture, there is a ritual that causes as much psychological, if not physical, pain: a call from a collection agency. Most of us would gladly get a root canal – or several of them, in a row, with no anesthesia – rather than deal with a collection agency. These companies come calling when you don’t pay your bills on time, and they can be highly unpleasant. Ask around and you will hear some horror stories – humiliation, harassment, and tears.
Collection agencies are actually companies that work on behalf of creditors. If you haven’t paid your credit card bill, for example, your credit card company will eventually submit your name to a collection agency (or a collections department, if you are dealing with a larger credit company).

When someone from a collections agency calls, here’s how you can make it a bit less painful:

1) Pick up. Ignoring the calls will mean more calls – until the collections agency or credit just launches legal action against you.

2) Have a paper and pen handy when you pick up the phone. Note the time and date of each call and ask the collections agent to tell you their name and agency name. Do not talk further until you have this information. Since you will be revealing financial information over the phone, you should have some idea who you are speaking with to prevent identity theft. If the person refuses to divulge their name, hang up and call your creditor directly. Explain the problem and ask whether there is someone else you can speak with to resolve the problem.

3) Know what to do when things get ugly. The collections agency won’t advertise this, but a Joe Schmo like you does have some rights. You have a right not to be harassed by a collections agency. This means collection agencies cannot call you too frequently, especially if you are at work. They also cannot call you on Sundays, statutory holidays or before 7 am or after 9 p.m. Collection agencies cannot in general contact people you know, except to ask them for your number and address.

If a collection agency ever uses abusive language or seems to be doing something illegal, your best defense are the records you’ve been keeping of the phone calls. In your notes, write down exactly what was said by an agent and when. Call the collection agency to report the problem and then call your creditor to note that the collection agent is being a problem and you are not willing to work with someone using harassment.

Work with your creditors directly or have your creditors refer you to another collections agent. You can also make a formal complaint against the collection agency if they are doing something illegal. Just because you owe money that does not mean that you deserve to be treated badly. Make sure the collection agency knows it and make sure your creditors know it.

4) Play nice. If the collections agent turns out to be decent, you should make every effort to cooperate. It will make your life – and the agent’s – much easier. Explain to the collection agent what the problem is and when you will be able to pay something. Be sure to add a few days to your estimate. If get paid on the first, tell the agent you can pay something on the fifth. That way, if you get the worst cold in the world or are running behind, you won’t be dinged again. And if you pay early, you’ll be golden.

Related posts:

1. Should You Pay Off Old Debts?
2. Identity Theft Part II: Detection
3. Calling Bulls*t on the Credit Industry
4. Do It Yourself Debt Settlement Plan
5. How to Talk to Creditors