Collectors in the USA: how to protect yourself

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Boiko Kateryna

Consultant

USA / Delaware

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Publication date: 24.07.2025

Who Are Debt Collectors in the U.S. and Why They Contact Debtors

Debt collectors in the U.S. are agencies or individuals engaged in collecting debts on behalf of creditors. They may act as third-party companies that purchase debt at a discount or as contractors operating under agreements with the creditor. Their primary goal is to recover full or partial payment through direct contact with the debtor.

Common reasons for collection activity include overdue credit card payments, student loans, medical bills, auto and mortgage loans. U.S. law provides a clear legal framework regulating collectors’ actions and protecting consumer rights.

1. Key Laws Governing Debt Collection in the U.S. (FDCPA)

The primary legal act regulating debt collection in the U.S. is the Fair Debt Collection Practices Act (FDCPA), enacted in 1977.

This law sets clear rules for debt collectors and defines which collection methods are permissible and which are illegal.

FDCPA prohibits:

• Threats of physical harm or arrest;
• Phone calls before 8:00 AM or after 9:00 PM without permission;
• Disclosing the debt to third parties (e.g., employer, neighbors);
• Repeated calls to exert psychological pressure;
• Use of insults, defamation, or fraudulent practices.

In 2021, the Consumer Financial Protection Bureau (CFPB) updated the rules to allow collectors to contact debtors via email, text messages, and even social media, provided confidentiality is respected.

2. Common Collection Methods and What Constitutes a Violation

Collectors may use a variety of methods to influence debtors, including:

1. Phone calls during the day and evening;
2. Emails or social media messages;
3. Letters demanding payment;
4. Notices about possible lawsuits or debt resale to other agencies.

If any of these methods include threats, deception, or coercion, it is considered an FDCPA violation. For example, stating you will be arrested or your property seized without a court order is illegal.

3. Consumer Rights When Dealing with Debt Collectors

U.S. consumers have several legal rights when dealing with debt collection agencies. These include:

• The right to request written debt validation;
• The right to dispute the debt within 30 days of initial contact;
• The right to request cessation of contact (cease and desist letter);
• The right to file a complaint with regulatory bodies or in court.

If the collector cannot verify the debt or provides incomplete information, they lose the right to demand payment.

4. How to Respond to Initial Contact from a Collector

During initial contact with a debt collector, remain calm, think carefully, and avoid making statements that could be used against you. Most importantly, do not verbally acknowledge the debt — even if you believe it may be valid. Your actions should include:

• Request a validation letter: Under FDCPA, the collector must send a written notice within 5 days of first contact with the debt amount, the original creditor's name, and instructions on how to dispute the debt.
• Record the date, time, and content of the conversation: Keep a detailed log of all communications. Note the collector’s name, phone number, call duration, and what was said. If allowed in your state, record the call.
• Do not share personal information: Do not provide your Social Security number, bank account details, home address, employer information, or other sensitive data until the debt is validated and confirmed legal.
• Do not agree to any terms before debt verification: Even partial payment or written acknowledgment can legally restart the statute of limitations, leading to new consequences.
• If unsure, consult an attorney or financial advisor: A licensed professional can help evaluate your case, respond correctly, and avoid costly mistakes.
• Dispute the debt in writing if it seems invalid: Send a Debt Verification Letter within 30 days of the collector’s letter. During this period, the agency may not take collection actions.

Remember: you have rights. Collectors cannot threaten, harass, call after 9:00 PM or before 8:00 AM, or contact your employer without consent. Stay informed and act within the law.

5. Tips for Protecting Yourself from Unlawful Practices

• Keep written records of all communications with collectors;
• Never make payments without a written agreement;
• Do not sign documents without consulting a lawyer;
• Use your right to request cessation of contact;
• Regularly review your credit report for errors or false entries.

6. Where to File Complaints: Regulators and Courts

If you believe a collector has violated your rights, you can contact the following:

1. Consumer Financial Protection Bureau (CFPB) — accepts online complaints and conducts investigations;
2. Federal Trade Commission (FTC) — enforces consumer protection laws and may fine agencies;
3. Your state Attorney General’s office;
4. Local courts — you can sue the collector for FDCPA violations.

7. The Role of a Credit Attorney in Resolving Issues

A credit attorney in the U.S. helps consumers protect their rights, interact with collectors, and resolve debt-related disputes. Their involvement is especially important when collectors act unlawfully or initiate lawsuits.

• Analyzing the legality of the collector’s claim and verifying the debt;
• Drafting written responses, including cease and desist letters;
• Representing the client in court if sued by a collector or creditor;
• Representing the client before the CFPB, FTC, or Attorney General;
• Assisting with debt restructuring or settlement negotiations.

Hiring an attorney significantly increases the chances of a fair outcome, especially if the collector uses aggressive or illegal tactics.