Here's the One Thing You Should Never Say to a Debt Collector

This is an excerpt from Dollar Scholar, the Money newsletter where managing editor Julia Glum teaches you the modern money lessons you NEED to know. Don't miss the next issue! Sign up at money.com/subscribe and join our community of 300,000+ Scholars.

Haters like to claim that too much screen time is unhealthy. They are wrong.

I absolutely love being on my phone. After existing all day long in the real world, there's nothing like spending my night reading Heated Rivalry fanfic on AO3, scrolling through /r/NYCinfluencersnark and sending my friends TikTok edits set to sad Noah Kahan songs.

See? My phone habits are extremely healthy. The only bad part is when a call interrupts my sacred screen time. But nothing will ever compare to when I used to get debt collector calls in college. They were the worst: intrusive and always left my stomach churning because I didn't know how to handle them.

Let's change that.

How should I deal with a debt collector call?

First, some quick context. Debt collectors are people or companies that try to get in touch with folks who owe specific debts and push them to pay those debts. And hearing from them is very common.

In 2017, the federal government found that about a third of Americans with credit files — or 70 million people — had been contacted by a third party attempting to collect a debt in the past year.

Usually, the debt collectors who call me are entities that have purchased my debt from the original lender "for pennies on the dollar," says April Lewis-Parks, director of financial education at Consolidated Credit. They'll make money if I agree to pay, and because they have skin in the game, debt collectors often get sneaky.

"A lot of them are aggressive in a way that is calculated to get you off-base or uncomfortable," says Martin Lynch, president of the Financial Counseling Association of America. "They'll say, 'Hey, Julia, you owe us $3,500. Can you go get your checkbook?'"

Here's the kicker: Depending on the origination of the debt, I might not actually be liable for it. Contradicting a debt collector may go against my people-pleasing nature, but I actually have a ton of rights here that I can — and should — exercise.

Debt collectors are required to follow the Fair Debt Collection Practices Act, which forbids them from relying upon "abusive, unfair or deceptive practices to collect debts," according to the Consumer Financial Protection Bureau's website. They cannot harass me.

What does this mean in practice? For one, they're allowed to contact me only between 8 a.m. and 9 p.m. local time (unless I agree otherwise). For another, they can't call me more than seven times in a week. And they're generally not allowed to discuss my debts with anyone who's not me, my spouse, my parents or my attorney.

They can't use profanity, threaten violence, misrepresent themselves or claim they're going to take action they legally can't. While they can call me at work, they can't keep calling me there if I tell them I can't answer while on the clock.

"Debts get sold so often from one debt collector to another," Lewis-Parks says. "If people get called or get letters, their job is not to go ahead and pay that debt. Their job is to investigate."

According to Lynch, if a debt collector calls me, I should politely but firmly reply, "I'm requesting that you provide validation that you own the debt. You pass that along to me, and I'll review it with my attorney. [Here's] the best time to reach me." Lewis-Parks suggests I take it one step further, saying that I would like to correspond by mail.

"It's so important to not engage over the phone because you don't want to get rattled and say the wrong thing or be pressured into anything," she adds.

What to do after a debt collector calls

Within five days of my request for validation, a debt collector must send a statement including the name of the creditor I allegedly owe, an itemization of the debt, an end date for when I can dispute the debt and more. Once I get this, I can pull my credit report to independently confirm I owe the debt and the amount is right. I should also look up my rights (and maybe get in touch with a lawyer).

When communicating with a debt collector, Lynch says, it's crucial to avoid acknowledging the debt is mine or — even worse — paying anything toward it upfront. By doing so, I may accidentally reset the statute of limitations and open myself up to legal action.

Lewis-Parks says most debts fall off my credit report after seven years, so if I'm near that point and don't have a major purchase coming up where a lender will check my credit, I might want to wait it out.

On the other hand, "if it's hurting your credit score terribly and it's only been a year or two, and you think, 'Gosh, if I could get this off my credit [report] and rebuild my credit so I can accomplish a life goal' — whether it's buying a car, a home, a boat, whatever — you have to weigh those options," she adds.

Finally, if I do decide to pay the debt collector, I'll want to negotiate in writing and have the company commit to reporting to all three credit bureaus once the debt is satisfied. Then I'll need to follow up to make sure this actually happens.

The bottom line

Not all debt collectors are shady, but many intentionally mislead people so they can make money. That means I need to be very careful if I receive a debt collector call — I should ask for validation, confirm it on my own, consider the statute of limitations and request to communicate on my own schedule.

"You don't make a payment, you don't acknowledge that the debt is even yours," Lynch says. "Stay cool. Stay calm."