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Report: Know your rights when debt collectors call

Federal and Washington, D.C., laws, dictate how debt collectors can proceed with trying to get money from consumers. People who have taken out loans should have an understanding on what debt collection tactics are standard practice and what is illegal. According to a recent report, having that knowledge can mean the difference between paying off a debt and simply sending money to scammers.

Consumer debt is on the rise. In January 2016, the Federal Reserve Bank of New York noted that Americans owe $12 trillion, which approaches the peak high of $12.68 trillion six years ago. Additionally, an estimated 77 million people across the country are delinquent in making payments. As a result of the recent increase, companies that are in the business of collecting money are motivated to go after people who owe a debt.

In some instances, people pose as debt collection companies in order to scam consumers. Anyone who receives a phone call from someone demanding payment should request information about the outstanding loan. If the caller refuses to hand over evidence, it should send up a red flag that the claim is bogus.

The Federal Trade Commission requires that debt collectors send people a written notice of the amount owed within five days of contacting the consumer. That notice must include not only the name of the creditor, but also the steps that the debtor can take if he or she believes the money is not owed. People who have questions about this matter should consult with an attorney.

Source: Los Angeles Times, “When collectors call, demand proof of your debt,” David Lazarus, Jan. 26, 2016

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