For those inclined to resolve delinquent debt on their own and have the time and organization skills to dedicate towards the process, there are some aggressive debt elimination methods that utilize the laws that regulate debt collectors. Our research into debt collection and the laws protecting consumers, Fair Debt Collection Practices Act, uncovered some strategies that could be used by consumers to protect themselves from debt collection and could result in greatly reducing the amount owed without traditional head to head negotiation.
These tactics are intended to be illustrated as educational material and not to be construed with a recommendation or legal advice. This route is not for the faint of heart or those lacking persistence.
Debt collection regulations offer significant power to the consumer. The problem we discovered is that these laws are rarely enforced. The reasons the debt collection laws go by the wayside seems to be:
- Not very many consumers know the laws that protect them;
- The laws that protect consumers from debt collectors, Fair Debt Collection Practices Act (FDCPA) are not independently enforced (as for instance traffic laws are) so for these protection laws to work for the consumer, affirmative steps must be taken by the consumer to enforce them;
- The Fair Debt Collection Practice Act limits recovery for violations and, because there is not "big money" involved, few attorneys accept the cases on a contingency basis (fees based on recovery like personal injury accidents). The fact recovery is limited to individual consumers makes hiring a lawyer on an hourly basis unfeasible because the attorney bill will likely be higher than any recover from the offending collection agency.
From what we found, the debt collection industry routinely violates the Fair Debt Collection Practices Act. We discovered that the industry as a whole operates at relatively thin profit margins that make adhering to the FDCPA uneconomical. A consumer that demands the collector stick to guidelines, and is willing to take action when a collector violates the FDCPA or, fails to meet the standards required to collect the debt, represents a problem waiting to happen for the typical collection agency.
Collectors, for the most part, with an informed aggressive consumer on their hands seem willing to resolve the account under very reasonable terms. In instances where violations were identified and proof of the violation was available, a claim by the consumer for damages due to them from the collector for violations of the FDCPA eliminated the debt for little or no money from the consumer.
The use of the Fair Debt Collection Practices Act should be used by any consumer attempting to resolve past due accounts for less than the full balance, in exchange for a credit bureau deletion letter, or to dispute debts not owed.
