Money problems are inherently embarrassing. If your financial obligations have become enough of a burden that you find yourself fielding collection calls, the last thing you want is for your family and friends to discover that fact. Fortunately, with few exceptions, the law is on your side. Federal guidelines strictly regulate the circumstances under which debt collectors can reveal information about your debt to a third party.
People Debt Collectors Can Legally Contact
The Fair Debt Collection Practices Act, which regulates the behavior of collection agencies in the U.S., notes that debt collectors have the freedom to contact and disclose information to the following people without your permission:
- your spouse (in certain states)
- your attorney
- your parents (if you’re a minor)
- your co-debtors
In most cases, federal law denies collection agencies the right to contact third parties that are not connected to the debt, such as neighbors, friends and co-workers. There is, however, one notable exception: A debt collector may seek out and speak with those close to you if the collection agency cannot locate you.
Debt Collectors Can Contact Third Parties for Information
A debt collector has the freedom to contact those close to you, but only if the collection agency cannot track you down. If a collector discloses any information about your debt while searching for you or knows where to find you yet contacts your loved ones anyway, federal law gives you the right to file a lawsuit against the collection agency. Collection agencies aren’t fond of being sued, and contrary to popular belief, most train their collectors well in an effort to ensure that their employees do not accidentally step afoul of the law.
Debt collectors cannot give your loved ones specifics about your debt. In certain circumstances, however, they can disclose information that could subsequently lead a loved one to uncover the truth. For example, if a collection agency contacts one of your family members or friends and that individual asks for the name of the debt collector’s employer, the Fair Debt Collection Practices Act gives the collector the right to answer the question. This is true even if the collection agency’s name contains words which may reveal the true nature of the call, such as “Collections,” “Solutions” or “Recovery.”
The Cease and Desist Order
One way to force debt collectors to keep quiet about your debt is to send the collection agency a cease and desist order in writing. A cease and desist order is merely a formal demand that the company stop contacting you or any third party about the debt.
Although collection agencies are bound by law to respect a debtor’s cease and desist request, making such a demand could put you in a sticky situation. If your debt is still subject to the statute of limitations for debt collection in your state, forcing a collection agency to stop contacting you leaves the company with no way to collect the debt except through the court system. If the statute of limitations for debt collection has already expired, however, the collection agency can no longer legally sue you. Once a lawsuit is no longer a risk, a cease and desist request becomes a perfectly safe–and smart–request to make.
The simplest and most effective way to prevent your friends and family from ever finding out about your debt is to pay the debt off. Even if you can only pay in installments, a collection agency that receives regular payments from you is a lot less likely to go searching out your family. Because debt collectors can only contact a third party about your debt in an effort to locate you, you can also protect your loved ones from harassment by ensuring that the collection agency knows precisely where you live and how to contact you.