The 5 Mistakes to Avoid When Dealing with a Debt Collection Agency

Anyone who has ever dealt with a debt collection agency knows that it can be an extremely difficult process. It appears that they never seem to get in touch with you at the right time or simply don’t know how to communicate with you. Fortunately, there is a lot of information on how to deal with debt collection agencies. We listed some of the biggest mistakes you can make when handling debt collection and how you can avoid them.

Dismissing Creditor’s Call

Acknowledging your creditor’s call is the first step to talking to them. Keep open communication so your lenders are always informed of your recent financial status. Collectors often work to get at least some of their debt back, so be honest if you are willing to make a payment to pay the balance. Failure to answer the call can lead to a debt collection notice, or worse, a legal action.

Giving Your Confidential Information

Many debt collection services offer this option and encourage you to set up a monthly payment that is withdrawn directly from your bank account. In some instances, payments may be taken in full amount, even though a monthly payment had been agreed on by both parties.  But you should never give collectors access to any of your personal finances.

Not Knowing Your Rights

The Fair Collection Practices Act (FDCPA) requires debt collection companies to comply with certain policies when trying to collect outstanding dues. The FDCPA Act includes acceptable hours to contact customers, no harassment calls, and not providing false loan or debt information. Collectors who do not comply with these guidelines and violate your privacy may be acted upon legally.

Not Gettings Things in Writing

Setting up a system for organizing your files can save you time when you need to review some information. Written documents, notes, and telephone conversations should always be kept in a well-ordered manner. Having a written contract can serve as verification if a problem occurs.

Paying the Wrong Person

When a company hires a debt collection agency to collect a payment, it can be confusing to know who is shouldering the fees. By calling the company that you owe, you can give a clear indication of where to direct the payment. This way, you will not end up sending payments to a fraudulent company and ensure that all your efforts will go to the right account.

Trusting the Wrong People 

Many people think that using credit to consolidate debt is the right choice to eliminate your debt, but there are factors that can be detrimental to your financial status. Some companies encourage you to use consolidation loans to pay off the remaining debt. They don’t tell you that there are high interests associated with these loans that can add significant value to your existing debt. If you don’t choose the right company, they can charge you a hefty fee for their services or offer advice that can have a negative impact on your credit rating. 

Dealing with a debt collection agency can be overwhelming if you don’t know what to expect. These mistakes can significantly harm your credit reputation. 

For a free financial counseling session, contact one of our certified credit counselors at 800-500-6489. During this 60-minute session, we will review your finances and create a budget plan that will help you bring your finances back on track. Visit CreditGUARD’s page at for more information.