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Missouri Division of Finance     
301 W. High Street
Room 630,
P.O. Box 716
Jefferson City, MO  65102
Phone: 573 751-3242
Fax: 573 751-9192
E-Mail: finance@dof.mo.gov

Debt Collection Problems?

Even in good times there is always a percentage of people who, because of personal emergencies such as loss of a job, are unable to pay bills as they come due. The Missouri Division of Finance offers the following advice concerning various courses of action available to someone in this fix, along with a summary of rights provided by state and federal law.

A delinquent debtor should avoid the almost universal instinct to hide from their creditors. Generally speaking, creditors will work with a debtor so long as further efforts are not ridiculous. The debtor should stay in contact by mail or by phone to keep both prospects and intentions well known.

At least two fallacies commonly circulate about debts and collection agencies. First, it is suggested that some creditors are unable to or are forbidden by law from turning accounts over to a collection agency. This is simply not true. With the exception of some activities that violate the public interest, i.e., inherently illegal activities, debts arising out of virtually all transactions can and will be turned over to collection agencies for collection efforts.

Second, it is widely believed that if a person is making any effort at paying a debt, it cannot be turned over to a collection agency nor can a lawsuit be filed. Again, this is not true. A creditor is entitled to be paid according to the terms of the contract and has every right to resort to collection agencies or lawsuits in order to collect, if necessary.

The Federal Fair Debt Collection Practices Act, linked with state law, provides considerable protection for the debtor from abusive or outrageous collection tactics by a collection agency. To summarize:

• What debts are covered: Debts which are for personal, family or household needs are covered by the Act; business debts are not.
• Whose collection activities are covered: The Act generally covers the activities of collection agencies, i.e., third party debt collectors and attorneys. The Act does not cover creditors or employees of creditors collecting their own debts in their own names. For example, a doctor or the doctor's employees collecting her own accounts would not be covered by the Act, but if she turned the accounts over to a collection agency, the collection agency would be covered in collecting the same accounts.
• What the Act is designed to do: The Act is designed to curtail unfair, abusive or outrageous practices and tactics by collection agencies. It does not forbid collection contacts or collection efforts nor is it designed to curtail legitimate collection agencies' activities.
• How a debt collector may contact a debtor: Contact may be face-to-face, by mail, by telephone, by telegram, or even by fax. The collector may not, however, contact a debtor at an unreasonable time or place, for example; before 8:00 in the morning or after 9:00 at night unless the debtor has an unusual schedule which warrants this. A collector is forbidden to contact a debtor at the place of employment once the collector knows that the employer would disapprove, but until this information is delivered to the collector, in writing, the collection activities may continue.
• Modifying or ceasing contact by the collector: A debtor may stop collection efforts by a collector by writing and indicating that no further contact should be made. Similarly, the debtor could stop contact except by, for example, mail. Once this information has been received there should be no further contact, although the collector may make contact to indicate there will be no further communication or to indicate that a certain specific action is about to take place. NOTE: Ceasing contacts does not preclude a lawsuit. The Act permits collecting debts, but merely curtails abuses, and filing a lawsuit is not regarded as an abuse.
• Contact with third parties: If the debtor has an attorney, the collector is forbidden to contact anyone other than that attorney, unless there is no response from the attorney within a reasonable time. If there is no attorney, a contact may be made with other third parties only for location information. The contact should be no more than one time with a given person. Generally, the collection agency may not tell any third party, other than an attorney, that there is a debt involved.
• The debtor is entitled to information: Within five days of the initial contact, the collector must provide a written notice concerning the amount of money owed, the name of the creditor, and what action the debtor may take if he disputes the debt. If the debtor disputes the debt in writing within thirty days of the initial contact, collection activities must cease until the debt is verified.

Prohibited activities and practices by debt collectors include:

• Threats of violence
• Publishing a "deadbeat list"
• Obscene or profane language
• Repeated use of the telephone intending to annoy
• Failure to identify themselves by telephone
• Advertising a debt
• Falsely stating or implying that they are attorneys or government representatives
• Stating or implying the debtor has committed a crime
• Falsely representing employment by a credit bureau
• Misrepresenting the amount of the debt
• Misrepresenting the involvement of an attorney
• Indicating that forms sent are legal forms when they are not
• Indicating that papers are not legal forms when they are
• Stating that failure to pay the debt may result in arrest
• Threatening to garnish or attach property or wages unless the collector or creditor has the right and intention to do this
• Giving or threatening to give false credit information about the debtor
• Sending the debtor a document that appears to be from a court or government agency if it is not
• Using a false name
• Collecting an amount greater than the debt if not allowed by law
• Depositing or threatening to deposit a postdated check before its date
• Making collect calls or sending collect telegrams
• Contacting a debtor by postcard
• Using any device, word or symbol on the outside of an envelope which indicates that the communication involves a collection effort

The Fair Debt Collection Practices Act is "self-enforcing", meaning there is no agency to enforce the Act for you. The Act provides for recovery of attorneys fees plus actual and punitive damages and court costs in the event that the consumer prevails. Class actions are also possible under the Act.

Persons with collection problems might seek the assistance of the not-for-profit consumer credit counseling service in the area. These services are available at no cost to the debtor and may provide an alternative to bankruptcy. The address and telephone number of the local consumer credit counseling service should be available through the yellow pages under "credit".

Missouri Consumer Credit Debt Counseling Services:

Springfield (800) 346-4932
Kansas City (816) 753-0535
Joplin (800) 346-4930

Consumer Debt Counseling:

Jefferson City (573) 556-5578
Columbia (573) 234-1851
St. Louis (877) 786-3328
(32 offices)

Published by the NATIONAL
ASSOCIATION OF CONSUMER
CREDIT ADMINISTRATORS

May be reproduced with appropriate credit.