What to do when debt collectors cross the line

Magnifying glass enlarging the word debt

If a debt collector has done something debt collectors can never do -- and it happens far more frequently than it should -- here's how to fight back.

Contact your state attorney general. Many states have debt collection laws that are even stricter than the federal laws. These laws apply to any collection agency that calls residents of that state, regardless of where their offices are located. The attorney general can investigate a complaint, seek to impose fines, order damages to be paid or restrict the operations of any agency found to be in violation of the state's laws.

Report the collection agency to the Federal Trade Commission. While the FTC won't do anything for you directly, it will log your complaint into a database of problem companies. Odds are you're not the only person complaining about a bad actor, right? Once there's a large number of complaints about one agency, the FTC can investigate and impose fines, order damages to be paid or restrict its operations. The FTC actually shut down a collection agency for the first time in December 2006 and fined it $1 million for repeatedly violating the Fair Debt Collection Practices Act.

Consider legal action. You can sue a collector in a state or federal court within one year from the date the law was violated. If you win, you can seek repayment for the damages you suffered plus an additional amount up to $1,000. Court costs and attorney's fees also can be recovered. To find an attorney that specializes in state and federal debt collection laws, contact the National Association of Consumer Advocates.