6 illegal (but common) debt collection tactics to watch for

CBS News

4 days ago

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There are a few common but illegal tactics that debt collectors use, and it's important to recognize what those are to protect yourself (and your finances).
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Debt collection is a legitimate business — when done legally. But too often, debt collectors choose to push the boundaries, especially when they assume the person on the other end of the line isn't fully aware of their rights. That can lead to harassment, threats and violations of the protections put in place for borrowers. The problem has gotten so bad, in fact, that the Consumer Financial Protection Bureau (CFPB) receives more complaints about debt collection than almost any other financial issue.
What makes this situation particularly frustrating is that many people don't realize when debt collectors are breaking the law. They assume that because they owe money, they have to put up with whatever treatment they receive, but that couldn't be further from the truth. The Fair Debt Collection Practices Act (FDCPA) sets clear boundaries on what collectors can and cannot do, and violations of these rules can result in serious penalties for the collection agency.
So, if you're behind on payments or have debt in collections, it's essential to know what debt collectors can't do. Understanding these illegal tactics isn't just about protecting yourself. It's about recognizing when you might have grounds to fight back.
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6 illegal (but common) debt collection tactics to watch for
Here are some common debt collection violations to watch for — and what to do if they happen to you.
Threatening arrest or jail time
You can't be thrown in jail for unpaid credit card bills or other consumer debt, but that doesn't stop some debt collectors from threatening it. They might claim that you'll be arrested if you don't pay right away or say there's already a warrant out for your arrest. These threats are not only false, they're also illegal under the FDCPA.
What to do: Stay calm and don't give in to the pressure. Ask for written verification of the debt and report the collector to the CFPB or your state attorney general's office.
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Calling before 8 a.m. or after 9 p.m.
Debt collectors are only allowed to contact you between 8 a.m. and 9 p.m. in your local time zone. However, some debt collectors ignore that rule, especially those operating from out-of-state or overseas. Remember, though, that these off-hours calls aren't just annoying. They're illegal. The FDCPA was designed to prevent harassment and repeated calls at odd hours can easily cross that line.
What to do: Keep a call log with timestamps and file a complaint with the CFPB. You can also send the debt collector a written notice asking them to stop contacting you.
Contacting your employer or family
While debt collectors are allowed to call your workplace once to verify your employment, they cannot discuss your debt with your boss, coworkers or the human resources department. Similarly, they're not allowed to talk about your debt with friends or family members, except in very limited cases, like a spouse or legal guardian.
Unfortunately, this is still a common intimidation tactic that many use. For example, debt collectors might claim they're investigating you or tell others that you're in legal trouble, all to pressure you into paying.
What to do: Document any third-party communications by debt collectors and report it immediately. This type of communication is a clear violation of federal law.
Misrepresenting the amount owed
Debt collectors sometimes inflate what you owe by adding bogus fees, penalties or interest that wasn't part of the original debt agreement. Others may try to collect on debts that are already paid off or on accounts that were never yours to begin with. This practice is especially common with older debts that have been sold and resold multiple times, often with limited documentation.
What to do: Always ask for a debt validation letter, which the debt collector is legally required to send within five days of first contact. If they can't prove the debt is real or that you owe the amount they say, you may not have to pay.
Pretending to be law enforcement or an attorney
Some debt collectors pose as police officers, court officials or lawyers to scare you into quick payment. They might send fake legal documents or call from numbers that appear official on caller ID. This is both deceptive and criminal. Impersonating a government or legal official to collect a debt can carry serious penalties for the debt collector, including fines and loss of licensure.
What to do: Don't respond to threats. Instead, ask for identification and written proof of the debt. If they refuse or act aggressively, report them.
Refusing to provide information about the debt
If a debt collector calls and won't give you details like who they are, what company they represent or how much you supposedly owe, that's a major red flag. Under federal law, you have the right to know this information, and debt collectors must provide it. Vague or evasive answers often signal that the debt is illegitimate or that the collector knows their practices won't hold up under scrutiny.
What to do: Never agree to make payments or share personal info until you receive written proof of the debt. You're entitled to it by law.
The bottom line
Not all debt collectors break the law — but many rely on fear, confusion or ignorance of your rights to get results. That's why it's so important to understand what collectors legally can and can't do. If you believe you're being harassed or misled, don't just put up with it. Take action. Keep records of all communication, file complaints with the right agencies and consider talking to a consumer protection attorney if the behavior doesn't stop. You have more power than you think — and the law is on your side.