Credit & Collections

Collection agencies will generally call you first to inform you of debt. They must send you something in writing regarding the debt within five days of calling you.

Some tips for talking to collection agents:

• 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 during 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 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. Scroll to our 3) Illegal Actions by a Collection Agency section below for more information on your rights. Knowing your rights and documenting your communications are the best ways to protect yourself against abuse and harassment by collection agencies.
• Keep your cool when speaking with collection agents. Don’t argue with them, and don’t admit anything to them. Be firm 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 accept abuse.

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 collection agency’s written notice must:

• Explicitly state that the purpose of the communication is to collect a debt, and that 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.
• State the name of the creditor to whom the money is owed.
• Give you the right to dispute that you owe the debt within 30 days, and let you know that if you do not dispute the debt within 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).

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.

Some tips for responding to a collection agency:

• Do all your communications with the collection agency in writing – by certified mail, return receipt and regular postal mail – and keep copies of all correspondence. It is also a good idea to send copies of your communication to the landlord of the property who initiated the collection action against you.
• In all of 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 also a good idea to 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, collection agencies cannot contact tenants once they have received a written request to stop all contact. After receiving written notice to stop contact, they may only contact tenants to inform them they are stopping collection on the debt, or to tell tenants they’re filing a lawsuit against them for the collection amount. Agencies can continue to collect the debt, but they can only contact tenants for those specific reasons. If they contact you for any reason other than the two stated above after receiving your letter, you have the right to bring legal action against them.
• Be very careful about what information you provide to collection agencies. All of the information you provide can be used to collect the debt, so only offer the most essential information explicitly related to the debt.

In general, there are two ways to stop any collection action against you: 1) You can dispute that you owe the entire debt or part of it, or 2) 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 LawHelp 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 including but 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 they are going to pay the debt “under protest” in order to avoid negative impacts on their credit record and pursue the return of their money in Small Claims Court after the fact. If you decide to pay under protest, be sure to 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. Even if you owe the debt, you still have rights and protections under the law.

Some ideas on how to proceed if you do owe the collections debt against you:

• Do not make any payments on the debt or arrangements to pay 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.
• 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 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 to 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 that negative remarks be deleted from your credit report once you’ve agreed to an arrangement with a debt collector and you’ve paid off the old debt. If you have satisfied the debt, they may approve your request. Removing negative items increases your credit score. Settle the account with “paid in full” on the receipt.

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

The following collection agency actions are illegal:

• They may not call you or communicate in writing more than three times per week, and 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.
• According to state law, they cannot call you numerous times a day, or call after 9pm and before 7:30am.
• They cannot threaten, harass or intimidate you.
• If you have a lawyer, the collection agency may only contact your attorney.
• 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.
• Collection agencies cannot pretend to be law enforcement or send any documents that look like court paperwork unless the documents 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 collections debts. For more information, see Washington LawHelp’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 to 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 taking any legal action. Navigate to our Legal Assistance Guide webpage 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.

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

If there are errors on your credit report due to identity theft or other reasons, you may be able to petition the credit reporting agencies to have the information corrected or removed. You can put a request in writing regarding the error to both the credit reporting agency and the entity that provided them the information. Include copies of any documentation you can gather to support your claim, and send your correspondence certified mail, return receipt. Be sure to keep copies of all your letters.

The credit reporting agency usually has 30 days to investigate your complaint. Even if your complaint is not resolved following the investigation, you can request that a copy of your dispute be included in your file and accompany all future copies of your report when they are requested. See more information and a sample dispute letter at the FTC’s Disputing Errors on Credit Reports.

If the landlord denied your tenancy in part or entirely because of your credit report, they must notify you in writing and provide the name, address and phone number of the credit reporting agency that gave them your information. In turn, the credit reporting agency must provide you with a free copy of your credit report. To obtain the free report, you must request it within 30 days in most cases. For more information, see the Consumer Financial Protection Bureau’s (CFPB) A Summary of Your Rights Under the Fair Credit Reporting Act. The Federal Trade Commission (FTC) also has a guide to cleaning up credit called Credit Repair: How to Help Yourself.

If you do not believe that you owe the debt or some part of it, send the collection agency a letter disputing the debt within 30 days. Communicate in writing 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. They must send proof to you in writing before they proceed with collection. The Washington LawHelp document Debtors’ Rights: Dealing with Collection Agencies contains a sample letter you can use.

It depends. Consult the original written rental agreement to see if you agreed to pay for collections costs. If so, you can be held responsible for paying any reasonable charges that result from the collections action against you, including attorneys’ fees and court costs. Almost all collection agencies will charge you interest, typically 12% per year, on debts they are attempting to collect. Interest can be charged regardless of whether you agreed to it in your lease or other contract.

You may be able to pursue a lawsuit against the collection agency for unfair debt collection practices. The success of your suit depends on the strength of your documentation. You have one year following the dates of the illegal actions to file in court against them. You can also file a complaint against the collection agency with the Federal Trade Commission or the Washington State Attorney General.

This is up to the discretion of each collection agency. You can try to negotiate a partial payment or payment plan with a collection agency, but it is within their rights to demand full payment of the debt you owe. If an agreement or payment plan is negotiated, be sure to get it in writing and keep it as documentation.

Collections debts will be reflected on your credit report for seven years from the last activity on the original account, regardless of whether or not you pay off the entire debt. Typically the last activity will be the last time a payment was made or when the original debt incurred. If the debt is a judgment (i.e., has gone through a court proceeding), then it can be reported for longer.

Collection agencies can collect 12% interest annually on debts.