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Collection agencies usually work on a contingency basis.  They are paid a percentage of what they actually collect.  The original creditor often gives minimal information to the collection agency.  Name, address, identifying information, the amount of the debt and the date of default.  If part of the debt is disputed, beware.  If you pay the undisputed portion of the claim, will the original creditor report the account as paid in full, or as a partially paid collection?


No one goes to school to prepare for a career as a debt collector.  Debt collection is not a respected major at any respected university.  No one becomes a debt collector out of altruism.  There are no formal ethical standards for debt collectors.  A person gets a job as a debt collector because he/she has failed at more honorable other careers, such used car sales.  The person who calls you from a debt collection agency is not your friend, is not trying to be fair, is not trying to help you, and may not be honest.  The debt collector is paid out of what he/she gets you to pay today.  Debt collectors will often say anything to get your bank account information.


The debt collector will try to use your emotions to manipulate you.  The debt collector may annoy you, badger you and harass you.  Or, the debt collector may try to appear to be your friend and appear to be sympathetic.  The debt collector will tell you that he/she can damage your credit if you do not pay today, or that payment today will improve your credit rating.  Do not believe such promises.  Do not believe any promises, statements or threats unless the debt collector puts them in writing.  Do not allow the debt collector to use shame, anger, fear and embarrassment to cause you pay money.  For the debt collector, it is just business.  You should treat it as business.  Is it wrong for a debt collector to tell you to sell your wedding ring in order to pay a credit card bill?


The Federal Trade Commission allows individuals who work for collection agencies to use aliases.  See, also, California Civil Code section 1788.11(b).


If, in spite of not receiving satisfactory information and verification from the debt collector, you feel that you want to settle the matter and pay money, be very careful.  Never feel that you are required to reach an agreement with a debt collector.  If you are at an impass, or just do not want to talk any longer, you can just hang up the phone.  The debt collector may turn his/her attention to someone else.  Never feel that you must reach an agreement with a debt collector.


If you decide to negotiate a full resolution, you should get the agreement in writing, signed by the debt collector.  And get it in writing before you send any money.  The debt collector has a fax machine.  Also ask for the signature of an authorized representative of the original creditor.  If the debt collector cannot or will not get the original creditor to confirm the terms agreed upon, at least get the debt collector to state (in writing) that he has full authority from the original creditor to sign the agreement on behalf of the original creditor.  The debt collector should sign with his/her real name, not an alias, not even a “registered alias.”  Their address must be a real street address, not a post office box.


Do not give a debt collector your bank account information.  Do not authorize an electronic debit from your bank account.  Pay the old fashioned way, by a physical check that it processed manually.  In the event of a problem later, you want the canceled check as proof that this payment was payment in full of a disputed claim, not a partial payment and not an admission of liability.


If you pay less than the full amount claimed, it may be reported to the credit bureaus as a debt settlement.  This may negatively affect your credit rating.  Demand that all negative credit information be removed from your credit files. If the collection agency reported the negative information; the collection agency can cause all negative information to be removed.  If the negative information was reported by the original creditor, only the original creditor, not the collection agency, can cause the reported information to be removed.  Any promise to remove the negative credit information on the subject account must be in writing.