What collection agencies are legally allowed to do
A collection agency can contact you by phone, mail, or email to request payment of a debt you owe. They can call your workplace, send letters to your home, and report the debt to credit bureaus if you do not pay. They can also sue you in court and, if they win, ask a judge to garnish your wages or place a lien on your property. These actions are all legal under the Fair Debt Collection Practices Act (FDCPA), the federal law that governs how collection agencies operate.
Collection agencies must, however, follow strict rules about how they contact you. They cannot contact you before 8 a.m. or after 9 p.m. in your time zone. They cannot call you at work if your employer does not allow personal calls. They cannot contact you if you have a lawyer handling the debt — they must contact your lawyer instead. If you send them a written request to stop contacting you, they must stop, with limited exceptions for lawsuits or final payment offers.
A collector can also verify the debt by sending you written notice within five days of first contact. This notice must include the amount owed, the creditor's name, and your right to dispute the debt. If you dispute the debt in writing within 30 days, the collector must stop collection efforts until they send you proof that the debt is real.
Key Takeaways
- Collection agencies can contact you by phone, mail, or email, report to credit bureaus, sue you in court, and seek wage garnishment or property liens — all legal under federal law.
- Collectors cannot call before 8 a.m. or after 9 p.m., cannot contact you at work if your employer forbids it, and must stop calling if you send a written request to cease contact.
- If you dispute a debt in writing within 30 days of first contact, the collector must stop collection and send you written proof that the debt belongs to you.
- Collectors cannot threaten violence, use profanity, call repeatedly to harass you, impersonate law enforcement, or disclose your debt to your employer or family members.
- If a collector breaks these rules, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) or sue the collector for damages in small claims or civil court.
Actions that are illegal for collection agencies
Collection agencies cannot threaten you with violence, arrest, or legal action they do not intend to take. They cannot use profanity, call you repeatedly in a short time period to harass you, or call before 8 a.m. or after 9 p.m. They cannot pretend to be a police officer, attorney, or government official. They cannot tell your employer, family members, or friends about your debt — they can only contact those people to find your address or phone number, and they cannot mention the debt.
Collectors also cannot add interest, fees, or charges to your debt unless the original contract or state law allows it. They cannot deposit a post-dated check you give them before the date on the check. They cannot threaten to take your property unless they have a court order allowing it. They cannot contact you on your cell phone using an automated dialer or prerecorded message unless you have given written permission.
If a debt is too old, a collector may still contact you, but they cannot sue you to collect it. The time limit for suing — called the statute of limitations — varies by state and by the type of debt, usually between three and ten years. Even after the important date passes, the debt remains on your credit report for seven years from the date of first missed payment, and the collector can still ask you to pay it voluntarily.
How to stop collection calls and letters
Send the collection agency a written request to stop contacting you. Use certified mail with return receipt so you have proof they received it. The letter should state your name, account number, and a clear request that they stop all contact. Once they receive this letter, they must stop calling and writing, except to confirm they will stop or to notify you of a specific action like a lawsuit.
Keep a copy of the letter for your records. If the collector continues to contact you after receiving your written request, document each call or letter with the date, time, and what was said. This record will be important if you need to file a complaint or pursue legal action against the collector.
You can also request that the collector contact you only by mail, not by phone. This request must also be in writing. Some collectors will honor a phone request, but a written request creates a clear record and is legally safer for you.
Disputing a debt the collector claims you owe
Within 30 days of the collector's first contact, you can send a written letter disputing the debt. State that you do not believe you owe the debt and ask for proof. Once the collector receives your dispute, they must stop collection efforts and send you written verification that the debt is real and belongs to you. This verification must include a copy of the original contract, a statement of the amount owed, and the creditor's name.
A dispute does not erase the debt if it is real, but it does pause collection activity while the agency investigates. If the collector cannot provide proof, they must stop trying to collect. Keep copies of all letters you send and all responses you receive. If the collector resumes collection without sending you proof, they are breaking the law.
What happens if a collector breaks the law
If a collection agency violates the FDCPA, you can file a complaint with the Consumer Financial Protection Bureau (CFPB) at consumerfinance.gov. The CFPB investigates complaints and can take action against collectors who break the law repeatedly. Filing a complaint does not cost you money and does not require a lawyer.
You can also sue a collector in small claims court or civil court for damages. Under the FDCPA, you can recover up to $1,000 in damages for violations, plus any actual harm you suffered (such as lost wages if you had to take time off work). You can also recover attorney fees if you hire a lawyer. Many lawyers who handle FDCPA cases work on contingency, meaning they take payment only if you win.
Document every violation carefully. Write down the date, time, and content of each illegal call or letter. Keep the original letters and save voicemails if possible. This documentation will be crucial if you decide to pursue a complaint or lawsuit.
Debt validation and your right to proof
When a collector first contacts you, they must send you a written notice within five days that includes the debt amount, the creditor's name, and your right to dispute. This is called debt validation. You have the right to request that the collector prove the debt is real before they continue collection efforts.
To request validation, send a written letter within 30 days of first contact asking the collector to prove you owe the debt. The collector must then stop collection and send you written proof. If they cannot provide it, they must stop trying to collect. Many collectors ignore validation requests, which is itself a violation of the FDCPA.
Validation is different from disputing the debt. A dispute says "I do not think this debt is mine." Validation says "Prove this debt is real and that I owe it." Both give you protection, but validation puts the burden on the collector to show proof before continuing.
Collection lawsuits and wage garnishment
If you do not pay and the debt is not too old, a collector can sue you in court. They must file the lawsuit in the county where you live or where the contract was signed. You will receive a summons and complaint in the mail. You have a limited time — usually 20 to 30 days depending on your state — to respond. If you do not respond, the collector wins by default and can move forward with collecting.
If the collector wins the lawsuit, they can ask the court to garnish your wages. This means the court orders your employer to take a portion of your paycheck and send it to the collector. The amount varies by state but is usually 10 to 25 percent of your disposable income. Some income, like Social Security and unemployment benefits, cannot be garnished. A collector can also place a lien on your home or bank account, though this requires additional court action.
If you receive a summons, respond to it even if you cannot afford a lawyer. Many courts have free legal aid services, and some lawyers offer free consultations. Responding gives you a chance to dispute the debt, raise defenses, or negotiate a payment plan with the collector.
Frequently Asked Questions
Can a collection agency call me at work?
A collector can call your workplace to find your address or phone number, but cannot discuss your debt with coworkers or your employer. If your employer has a policy against personal calls, the collector cannot call you at work at all. If they do, tell them your employer does not allow personal calls, and they must stop.
What should I do if a collector is harassing me?
Document every call and letter with the date, time, and what was said. Send the collector a written request to stop contacting you by certified mail. File a complaint with the CFPB at consumerfinance.gov. If the harassment continues, consult a lawyer about suing the collector for damages under the FDCPA.
Can a collection agency report the debt to credit bureaus?
Yes, collectors can report debts to the three major credit bureaus — Equifax, Experian, and TransUnion. This will lower your credit score. The debt will remain on your report for seven years from the date of first missed payment, even if you pay it later. Paying the debt does not remove it from your report, but it will show as "paid" instead of "unpaid."
What if the debt is not mine?
Send a written dispute to the collector within 30 days of first contact stating the debt is not yours. Ask for proof that you owe it. The collector must stop collection and send you verification. If they cannot prove the debt is yours, they must stop. You can also file a complaint with the CFPB and dispute the debt with the credit bureaus.
Can a collector take money from my bank account without permission?
No, not without a court order. A collector must sue you, win the case, and get a judgment before they can place a lien on your bank account. Once they have a judgment, they can ask the court to freeze your account and take money to pay the debt. Some accounts, like those receiving Social Security, have limited protection.