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Know Your Rights » Moving Out » Credit & Collections

Collection Agencies

Landlords sometimes use collection agencies in an attempt to recover debts owed (or claimed to be owed) them. There is little regulation for the action of individual landlords in using collections, but there are some federal regulations. It’s very important to know your legal rights when dealing with collection agencies. The information below will provide you with a general overview of the process, as well as some tips and best practices for protecting yourself against unlawful collection actions or unlawful behavior from collections agents.

Collection agencies are considered to be a business whose primary purpose is debt collection. Management companies or businesses that collect debts through collections departments are not true collection agencies, and therefore not covered under federal or state laws pertaining to collection agencies. They still have power to collect debts against you, but are not regulated in the same way. Speak to an attorney for more information on how to dispute non-regulated collections actions against you.

1. Notification of a Collection Action

Collection agencies will generally call you first to inform you of the debt. They must send you something in writing regarding the debt within five days of calling you. Here are some tips for talking to collection agents:

  • It is best to keep verbal interactions with collection agents to the absolute minimum. Communicating with them in writing will ensure that everything is well documented and will keep you from revealing any personal information about yourself that they may later try to use to collect the debt. If you receive a call from a collection agent, ask that they send you all the documentation in writing immediately, and get off the phone as soon as you can.
  • Keep a detailed record of all communications you have with the collection agency. Write down every date and time they call you, as well as the collection agency name, collection agent’s name and ID number, and what was said on the call.
  • Do not admit to owing any money until you have received written documentation from the collection agency. The less you tell them, the better.
  • Collection agents can be bullying and manipulative. Their job is to get you to pay the creditor with minimum fuss, and they may try to intimidate you into paying. In addition, they are typically not well informed of the circumstances regarding your debt, and all of your rights under fair debt collection laws and landlord-tenant law. You can hang up on a collection agent. There are specific laws they need to comply with in regards to how they communicate with you. See Illegal Actions by a Collection Agency below for more information on your rights. Knowing your rights and documenting your communications are your best ways to protect yourself against abuse and harassment by collection agencies.
  • Keep as calm as possible when speaking with a collections agent. Avoid arguing with them, and don’t admit anything to them. Be firm with them, but polite. They must stop all communications with you following a written request for them to do so. If the conversation is not going well or heading in the wrong direction, quickly excuse yourself and hang up the phone. Even if you owe the debt, you don’t have to be abused.

The collection agency must also contact you in writing regarding the debt. If they initially contact you by phone, you can insist upon having the information put in writing. The written notice must:

  • Explicitly state that the purpose of the communication is to collect a debt, and all information obtained from you can be used for the collection of the debt. All written notices from the agency must include this statement.
  • List the name, mailing address and telephone number of the collection agency.
  • Tell you the specific amount that you owe, broken down by item and including late charges and interest.
  • Say the name of the creditor to whom the money is owed.
  • Give you the right to contest that you owe the debt within 30 days, and letting you know that if you do not contest the debt in 30 days, you consider it valid.
  • State that if you contest within 30 days that you owe the debt, they will obtain verification that you owe it and send it to you.
  • Let you know that you can ask for the name of the original creditor if different from the person collecting the debt. It also must be requested within 30 days (it can be up to 45 days in some unusual circumstances).
2. Responding to a Collection Agency

Once you receive written verification of the debt, you can do some research on your own, double check their documents and get your papers in order before you respond. Here are some tips for responding to a collection agency:

  • Do all your communications with the collection agency in writing, certified mail return receipt and regular postal mail, and keep copies of all the correspondence. It is a good idea to also send copies of your communication to the landlord of the property that initiated the collection action against you.
  • In all your correspondence to the collection agency, include the date, your name and address, the address of the unit you lived in relative to the debt, and the account number assigned to you by the collection agency. It’s a good idea to also state that you know your rights under the Fair Debt Collection Practices Act and state laws, and that you’re using them.
  • Under the Fair Debt Collection Practices Act, the collection agency cannot contact the tenant once they have received a written request to stop all contact. After they have received written notice to stop contact, they may only contact the tenant to inform them they are stopping collection on the debt, or to tell the tenant that they’re filing a lawsuit against them for the collection amount. They can continue to collect the debt, but they can only contact you for those specific reasons. If, after receiving your letter, they contact you for any reason other than the two stated above, you have the right to bring legal action against them.
  • Be very careful about what information you provide to a collection agency. All the information you provide them can be used to collect the debt, so only provide them with the most essential pieces of information, and only that which explicitly relates to the debt.

In general, there are two ways to stop any collection action against you. You can dispute that you owe the entire debt or part of it, or you can pay the debt. If you do not believe that you owe the debt, or some part of it, send them a letter disputing the debt within 30 days (up to 45 days in some uncommon circumstances). Communicate in writing with the collection agency regarding any and all problems you find with the collection charge. The collection agency must temporarily stop collection and verify that you do indeed owe the debt as charged before they can proceed with collection. In many circumstances, the collection agency will send you the information provided by the original creditor and then immediately start the collection action again. Unless the collection agency discovers an error has been made, this is likely only a temporary solution. They must send that proof to you in writing before they proceed with collection. The Washington Law Help document Debtors’ Rights: Dealing with Collection Agencies contains a sample letter. If the disputed collection action has already been reported on your credit, it is also a good idea to send the dispute letter to the credit reporting bureau.

There are multiple reasons a renter might dispute a collections charge against them. They include, but are not limited to:

  • They do not believe they owe the debt.
  • The amount they’re being charged is incorrect, or includes unaccounted for, unanticipated, or unreasonable fees.
  • The debt has already been paid off.
  • The debt should be in someone else’s name, or should be shared among more than one person.
  • The debt has passed the statute of limitations.

Some tenants decide that they are going to pay the debt “under protest” in order to avoid it negatively impacting their credit record. They can then pursue the return of their money in Small Claims Court after the fact. If you decide to pay under protest, be sure and send a letter stating that you do not believe you owe the debt, but are paying under protest to avoid having the debt harm your credit. Write “paid under protest” on the check. Speak to an attorney to see if paying under protest may be a good option for you or to get help making a plan to get your money back.

If you owe the debt, you still have rights and protections under the law. Here are some ideas on how to proceed if you do owe the collections debt against you:

  • Do not make any payments on the debt or make payment arrangements until you have received proof that you owe it, and settlement is your only option. Wait until you have written confirmation from the collection agency showing that everything is correct before you admit to owing the debt.
  • It is best practice to avoid giving collection agencies your bank account number, or paying by personal check. If possible, pay with a cashier’s check or a money order in order to preserve the privacy of your account numbers. Make a photocopy of the money order after it’s filled out, but before it’s separated from the stub.
  • Making a payment on your debt causes the statute of limitations to restart, so be aware of the time limit before you begin making payments.
  • You can offer a payment plan to the collection agency or try to negotiate a lower payment amount. Be sure and get all agreements in writing and keep thorough documentation of all the payments you send. It is up to the discretion of the collection agency to decide whether or not to accept a payment plan or partial payment from you. It is within their rights to demand full payment of the debt you owe.
  • Request deletion of negative remarks from your credit report. Once you’ve agreed to an arrangement with a debt collector and you’ve paid off the old debt, ask the debt collector to remove negative items from your personal credit file. Because you put forth effort to satisfy the debt, they may approve your request. Removing negative items increases your credit score. Settle the account with a “paid in full” on the receipt.
3. Illegal Actions by Collection Agencies

It is illegal for collections agencies to harass you, lie or manipulate you in order to collect a debt. If your rights are being violated by collection agencies, put it in writing. Be sure and document all illegal actions taken against you in writing, sending letters certified mail, return receipt. The following actions are illegal for collection agencies:

  • They may not call you or communicate in writing more than three times per week. Only one call per week may be at your workplace. Once they receive a letter from you asking to stop contact, they can only contact you to notify you that either the debt has been removed, or that they are filing a lawsuit against you.
  • They cannot legally call you numerous times a day, call after 9 pm or before 7:30 am according to state law.
  • They cannot threaten, harass or intimidate you.
  • If you don’t have an attorney representing you, it is legal for a collection agency to contact other people in your life, but only for the specific purpose of finding out where you live or work. They cannot disclose that they are attempting to collect a debt, and in the majority of cases, they can only contact those individuals once. If you have a lawyer, the collection agency can only contact your attorney.
  • Collection agencies cannot pretend to be law enforcement, or send any documents that look like court paperwork unless they are court paperwork.
  • They are not law enforcement and have no power to put you in jail. Neither can they garnish your wages without going through a court process.
  • Some types of income are exempt from being taken to pay off a collections debt. For more information, see Washington Law Help’s Debtors’ Rights: Dealing with Collection Agencies or contact an attorney.

You may also be able to pursue a lawsuit against the collection agency for unfair debt collection practices. Try and gather as much information as possible documenting the actions taken against you, as well as your responses to the collection agency. You have one year following the dates of the illegal actions to file in court against them. However this process can be expensive and lengthy, so you should speak to an attorney before commencing any legal action. See our tenant Legal Assistance Guide for resources and information. You can also file a complaint against the collection agency with the Federal Trade Commission or the Washington State Attorney General.