Your Rights and Responsibilities
(The following is a DFI Your Money Matters program brochure reproduction)
Being contacted by someone who wants to collect a debt can be upsetting. This brochure explains some of your rights and responsibilities under the law and answers some frequently asked questions about debt collection.
What should I do if a collector calls me?
The most important thing to do is to remain calm; arguments do not solve anything. If you get angry you may forget important information. In responding to complaints that bill collectors were abusive, it is often discovered it was actually the consumer who was abusive.
If you are contacted
- Find out the name, address and phone number of the company calling you.
- Find out the name of the business you owe money to, if different from the caller.
- Get the exact amount they claim you owe.
How do I dispute a debt?
If a collection agency is involved, write them within 30 days of receiving the initial notice and inform them you are disputing the debt. The collection agency must then halt collection activity until a copy of the verification is sent to you. It can then resume collection efforts. If the debt cannot be verified, the collection agency must cease activity on your account. During this time you are disputing the debt, the collector may not disclose any information about the debt, without also stating that it is being disputed.
The creditor called yesterday and threatened to sue me if I didnt pay my debt. Is that legal?
Yes. A creditor can threaten legal action against you. This includes threats to garnishee your wages or seize collateral. However, such action can only be threatened if it is taken in the regular course of business or is intended with respect to your particular debt. Only the creditor has the authority to decide whether legal action should be taken. A collection agency cannot initiate legal action on its own but can recommend legal action to the creditor.
What is considered harassment?
Harassment is difficult to describe in exact terms, but it usually means that a collector used obscene or threatening language with you. This includes calling you names, demeaning your occupation, or questioning the decisions that lead to your account being placed with a collection agency. It is also considered harassment to contact you at unusual hours (usually defined as before 8:00 a.m. or after 9:00 p.m.), or to call so often that it becomes harassing. Remember it is not against the law to be rude, and there is a distinction between rudeness and harassment.
Is a collection agency allowed to contact my employer?
The collector can contact your employer only for the following reasons to verify employment or the amount of your earnings, or to communicate with an employer who has an established debt counseling service or procedure.
Collectors can also contact an employer after a final court judgment has been made on the debt.
What do I do if I simply cant afford to pay off the debt?
Try to propose to pay off the full debt in regular but specific payments. Be prepared to provide evidence concerning your current financial condition. Make sure that the payments are in an amount you can afford. Write both the creditor and collection with your proposal, and you might want to consider including a payment with that letter in the amount of the proposed payment. The payments should be in an amount that would pay off the debt in a reasonable amount of time. Offering to pay $5 a month on a $1,000 debt probably would not be accepted by a creditor or collection agency. If the collector approves these new payments, it is extremely important that you do not miss any payments.
Ive had problems paying my bills and Im trying to set up payment plans but the collectors are demanding full payment. Can they do that?
Yes. Once your account goes into default, a creditor or collector can demand any amount they wish, up to full payment of the debt. Although many collectors might accept smaller payments on a regular basis, they are not obligated to accept any offer you make them.
The collector threatened to tell my neighbor about my debt. Can he do that?
No. A collector cannot disclose, or threaten to disclose, information about your personal or credit reputation to anyone, without a legitimate business need to know it. Remember, however, that collectors can report accurate information to the credit bureau and that information could end up on your credit report.
The collector called my neighbor and asked if I live here. I thought collectors couldnt call anyone except me.
A collector can contact a third party only to determine if you reside at the location listed on the account. If youve moved, they can also ask for the new address, phone number, and where you are employed. Any further discussion between a third party and a collector is prohibited in Wisconsin.
What should I do if I have questions or concerns about a collection agencys activities?
Call or write us at:
Office of Consumer Affairs
Department of Financial Institutions
P. O. Box 8041
Madison WI 53708-8041
(800) 452-3328 (Wisconsin residents only) or
Fax: (608) 264-7968
Please keep in mind that we can only act on complaints filed in writing or submitted through our Website.
About the State of Wisconsin Department of Financial Institutions
DFI provides financial education through our Your Money Matters program including:
- Speakers for meetings and seminars, conventions, professional and civic groups, high school and college classes, and other audiences of 30 or more.
- Presentations for the public on current financial topics.
- Education Centers featuring on-line access.
Informational brochures on Investing, Credit, Financing and Entrepreneurship.
DFI regulates the following:
Division of Banking regulatory responsibility for state-chartered banks, mortgage bankers and licensed financial service providers.
Division of Corporate and Consumer Services responsible for the Uniform Commercial Code (UCC) filings, and maintaining the state wide data base of UCC lien filings for secured transactions, and for organizing or licensing domestic and foreign corporations, limited partnerships, limited liability companies, and limited liability partnerships.
Office of Credit Unions supervision of state- chartered credit unions.
Division of Savings Institutions supervision of savings and loans, and savings banks.
Division of Securities regulates offerings of securities including mutual funds; franchise offerings; broker-dealers and securities agents; investment advisers and investment adviser representatives.
Office of Consumer Affairs Counsels consumers and merchants regarding their rights and responsibilities under the Wisconsin Consumer Act, which governs consumer credit transactions and the collection of consumer debt.
More About DFI
DFI is a self-supporting agency funded by fees charged to those it regulates.
DFI is here to serve you! Visit us at:
201 W Washington Ave
Office hours are Monday through Friday, 7:45 a.m. to 4:30 p.m.
DFI To learn more about us visit our Website at:
DFI Department of Financial Institutions
201 W Washington Ave
Madison, WI 53703
Office of the Secretary 608-264-7800
Banking/Savings Institutions 608-261-7578
Mortgage Banking 608-261-7578
Credit Unions 608-261-9543
Licensed Financial Services 608-261-7578
Uniform Commercial Code 608-261-9548
Consumer Affairs (Wisconsin Consumer Act) 608-261-9555
Your Money Matters
Financial Education 608-267-1713
You can file a complaint by contacting:
Department of Financial Institutions
Wisconsin Consumer Act Section
PO BOX 8041
Madison, WI 53708-8041