Collections accounts are quite common. According to the Consumer Financial Protection Bureau, in 2020, nearly 1 in 3 Americans had a collection account on their credit reports. Around half of these collections are for medical debts. Other common causes of collections include unpaid cell phone and cable television bills, as well as credit card charge offs.
If you’re dealing with one of these collections accounts, you might have heard of a variety of advice. Perhaps you should send a debt validation letter to the debt collector? Maybe you should offer to pay the debt, in exchange for having it deleted? These are just a few tactics, each of which can make sense in various circumstances.
We’d like to share an alternative approach with you. Below, we’ve shared a letter, which if used property, can help you protect your rights, and cause debt collectors to violate the law. As a result of this violation, you may have the right to sue the collector, under the Fair Debt Collection Practices Act (known as the FDCPA).
So, what is this mystery letter, and how does it work? Let’s dive in.
Some Background On The FDCPA
The FDCPA is a federal law, which regulates the conduct of debt collectors. Amongst other things, the FDCPA places restrictions on when a collection agency can contact you, how they report debts to credit agencies, and even what can and cannot appear on debt collection envelopes.
Thousands of lawsuits are filed under the FDCPA each year. Debt collectors pay out tens of millions of dollars in attorney fees and settlements each year.
Suing a collector typically costs you nothing, since collectors pay attorney’s fees under the FDCPA. This means if you work with a lawyer, they’ll usually file and take your case forward without charging you. Additionally, you’re entitled to money damages of up to $1,000 per violation.
FDCPA cases, like most lawsuits, tend to settle outside of trial. In many cases, your attorney will be able to negotiate a deletion of the collection account, as part of a legal settlement. As a result, your credit score will probably improve.
Keep in mind that the FDCPA isn’t the only law which regulates debt collectors. Many states have their own debt collection laws. The Rosenthal Fair Debt Collection Practices Act in California, is a strong state law which protects consumers.
Section c(c) of the FDCPA
Section c(c) of the FDCPA is the basis for the letter we’ll be discussing here. In a nutshell, c(c) says that if a consumer informs a collector (in writing) that they refuse to pay a debt, or that the consumer wants the collector to cease further communication, the debt collector must restrict how they communicate with the consumer.
After receiving this notice, how may the collector now communicate with the consumer? There are 3 specific sorts of contacts which are permitted:
a. First, the collector can inform the consumer that their collections efforts are being terminated. This typically means that the collector is planning to cease all collections efforts on the account, and likely return the account to the original creditor (the party to whom the debt was originally owed).
b. Second, the collector can tell the consumer that they “may invoke specified remedies which are ordinarily invoked by such debt collector….” What does this mean?
Basically, the collector can write to a consumer, and tell them that they might decide to sue the customer, report the account to credit agencies, or engage in other standard collections practices. They’re not saying that they will for sure, but rather, are reminding the consumer that they might do so.
It’s essentially a reminder of the collector’s rights. It implies that the consumer might want to consider resolving the debt.
c. Lastly, the collector can tell the consumer that they “intend” to invoke a specified remedy. This means the collector is telling the consumer that they plan to sue the consumer, report to credit agencies, or do something else which is normally within their rights.
It is also worth keeping in mind that collectors cannot threaten to take an action which they legally cannot take against you, or have no intention of taking. Let’s say that a collector responds to your refusal to pay, with a threat to sue you. Let’s also assume that this debt collector (like many collectors) never files lawsuits against consumers.
In this situation, the collector has engaged in a false representation, by threatening to do something which they don’t actually plan to carry out. Thus, even though this communication might appear permissible at first glance, a deeper investigation tells us that it’s in fact a violation of the law.
Preparing A c(c) Letter
If you send the collector a c(c) letter, you’re taking an important step towards protecting your rights. After all, you have the right to refuse to pay a debt – and that right should be respected.
Every good c(c) collector letter starts with the debt collector’s address listed on the top of the letter. You can obtain this information from your credit reports, from any collections notices you recieved, or by looking up the debt collector online.
After that you should get right into the meat of your letter. Your goal is to be cordial yet clear. You should start by stating your name, date of birth, Social Security Number and mailing address.
Some people prefer to include only the last four digits of their Social Security Number. In our experience, however, most debt collectors already have your full Social Security Number, so you might as well give it to them.
Your letter should now indicate your refusal to pay the debt. You can simply state that you won’t pay the debt, and provide no further reasons. This letter will be brief and to the point. Below is such a letter.
Debt Collection Company
123 Smith Street
Anytown, CA, 90505
Hello,
I am writing to you about a debt which you’re collecting on. So that you may identify me, my name is John Jones. I was born on June 12, 1975. My Social Security Number is 123-45-6789. My mailing address is 4561 Main Street, New York, NY 10024.
I refuse to pay this debt. I just wanted to inform you of that. Thanks for taking the time to read this.
Sincerely,
John Jones
The good thing about this letter is that it’s very clear what you’re asking for. Since you refuse to pay the debt, the collector cannot contact you further, outside of the exceptions we discussed earlier.
Here’s what often happens: The collector recieves this letter, and assumes that you’re disputing the debt, or suggesting that it is innacurate. In response, they send you proof that you owe the debt.
The thing is, proof that you owe the debt isn’t what you were asking for. You never said a single thing about the debt being disputed or incorrect.
What’s more, providing proof that you owe a debt is not an exception under section c(c), and thus does not allow the collector to communicate with you. Thus, the collector has violated the law.
Another common response to this letter is a collector sending you a letter offering to settle the debt. Quite often, employees at a collection agency assume that you don’t have enough money to settle a debt, and that is why you’re refusing to pay the debt.
“Why not allow this person to pay less, and see if they agree?” This seems to be their mindset. Given that debt collection employees are paid on commission, this makes sense.
Of course, sending you a settlement offer is also a violation of c(c). You already told the collector you would not pay.
You might be wondering why debt collectors mess this up so often. After all, don’t they stand to lose money in a lawsuit?
Here’s the thing – employees of debt collection firms don’t get much training. They aren’t paid well, and don’t tend to stick around in collections jobs for very long. As a result, the typical collection employee may not be aware of the legal requirements around respond to a c(c) letter.
A More Advanced & Effective c(c) Letter
You can also prepare a c(c) letter with more factual details. This increases the chances that the letter sounds authentic, and thus draws a response from a debt collector. More often than not, that response involves a violation of the law.
Please remember that in writing this sort of letter, it is very important that you be truthful. There’s two reasons for this. First, telling the truth is the right thing to do. You learned this when you were a kid.
Secondly, it’s important in the event of any potential legal action. If you end up filling a c(c) lawsuit, legal counsel for the debt collector will have the right to depose you. In a deposition, opposing counsel gets to ask you questions, under oath, prior to trial. If you lie or misrepresent facts in your letter, that can result in losing your case, and even facing legal penalties.
Here’s a sample letter you might use, if you went through a divorce. Let’s say the divorce left you with debts you were unable to pay.
Note the specificity of this letter. You did not say anything about disagreeing with or disputing the debt. Rather, you simply outlined your personal situation.
Dear Debt Collector,
My name is (insert name). My date of birth is (insert DOB). My Social Security Number is (insert SSN). My address is (insert address).
I went through a divorce in 2017. One of the issues which lead to our divorce was disagreements over money. My spouse (spouse’s name) purchased a new boat and went on shopping sprees regularly. We have two kids, and earned a middle class income.
This wasn’t sustainable, and it was clear that we had very different values around spending. That wasn’t the only issue we had, but it was a big one. As a result of the divorce, some of our joint accounts had to be let go.
Right now, I am dealing with more than $20,000 in charged off debts, most of which was due to spending from (spouse’s name). I don’t like to place blame, but this is the truth. It’s become very tough for me to pay these debts, while paying a greater share of income towards rent, since I am single now.
Because of these issues, I have to prioritize. I am going to be able to meet some obligations and not others. For that reason, I will not and simply cannot pay this debt. I’m sorry to have to tell you that.
I do appreciate that you have taken the time to read this. Take care.
Sincerely,
(Client’s full name)
Sending A c(c) Letter And Tracking Responses
Once you have prepared a c(c) letter, you should send it by certified mail. After all, it’s important that you can prove that any unlawful communications by a debt collector were after your letter was recieved. Without that, you don’t have a case.
To locate the proper mailing address for a debt collector, Google the collector’s name, and check their website. You can also check the contact address they’ve listed on your credit reports.
You don’t have to visit the post office to send letters by certified mail labels. Instead, you can use a website like Certified Mail Labels to mail and track letters online.
Each time you recieve a response from a collector, you should read the response carefully, and set it aside. In many cases, a collectors’ response will acknowledge your refusal to pay, and indicate that the collector will not be contacting you further.
In other instances, as mentioned, you’ll recieve settlement offers, or documents which provide proof that you owe the debt. In either of these instances, the debt collector has likely violated the law.
Whatever comes your way, you should scan it, and save it to your computer. You’ll need these documents later.
Bringing An FDCPA Lawsuit
Until you have an attorney review your case, you won’t know whether you in fact have an FDCPA case. You can find an attorney who operates in your state, by visiting the website of the National Association of Consumer Advocates. Another place to locate an attorney is through Avvo.
A simpler option, however, might be to schedule a free consultation with our firm. We work with attorneys around the country, and will be happy to place your case, free of charge.
Recall that working with an attorney on your case will not cost you anything. Your attorneys fees are payable through a settlement or succesful verdict at trial. Also, you’re entitled to compensation of up to $1,000, per violation.
FDCPA cases aren’t resolved overnight. Most cases take 5 to 10 months to reach a resolution.
Typically, your attorney will have to file the case in court, correspond with opposing counsel, and perhaps make discovery requests. It is possible that you’ll have to go through a deposition, where the debt collector’s attorney asks you about your dispute of the collection account etc. This is why it’s so important to write a truthful c(c) letter.
In most instances, the case will be settled out of court. While debt collectors often disagree with consumers asserting their rights, they understand that their chances of winning in these cases are mixed at best. Also, the amount they’ll spend on paying their attorneys often makes it not worthwhile for the debt collector to pursue the case further.
As part of the settlement, the debt collector will typically agree to cease collection efforts on the account, and return the debt to it’s original creditor. This means that the debt will no longer appear on your credit reports, under the name of this debt collector.
Do You Still Owe The Debt To The Original Creditor?
One important thing to understand about c(c) lawsuits: Violations by the debt collector do not mean that the debt isn’t owed to the original creditor. As an example, let’s say that you owe a medical bill of $350, to a doctor’s office.
Suppose the collector commits a c(c) violation. As a result, you’re able to sue the collector, and have them delete the debt, and cease collections efforts. They return the debt to the doctor’s office.
This does not mean that you no longer owe the doctor $350. If that debt is proper and owed, it is still your responsibility. The doctor could choose to hire a new debt collector to collect on the debt, and it can once again appear on your credit reports. Or, they could contact you about the debt on their own.
Thus, having a c(c) violation does not in itself extinguish the debt. Even if you have a c(c) case, you may want to look at settling the debt with the original creditor, if the debt is indeed yours.
How Often Do Debt Collectors Violate A c(c) Notice?
You might be wondering how likely it is that you end up with a c(c) violation? The simple answer is, it depends.
Our experience is that of all the c(c) letters sent, about 20% result in an FDCPA violation. With some debt collectors, the rate is higher, while with others, it is considerably lower. Overall, you should assume that most c(c) letters won’t result in a violation, but a fair number do.
The Final Word
The c(c) letter is a powerful tactic to deal with debt collectors. If you’re dealing with collections accounts that you don’t wish to pay, you may want to give it a try. You’ve got nothing to lose.
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