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How to handle calls from debt collectors

Free Malaysia Today logo Free Malaysia Today 14/3/2019 Eric Kiang
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Creditors like banks for example, appoint debt collection agencies to chase after debtors for payment of debts. Losing money from a non-paying client is part of the risk of doing business.

To mitigate the losses, banks and other creditors do whatever it takes to get back the money owed them. Debt collectors are paid a fee, or a percentage of the total amount collected for their services.

To illustrate, let’s look at a conversation between a debt collector and a debtor.

(NOTE: This is an example to illustrate salient points. Not all debt collectors exhibit this behaviour. Any resemblance to actual persons, living or dead, or actual events is purely coincidental.)

You: “Hello, Doe speaking.”

Collector: “I’m from Tough Collections. You have an overdue balance on your MadamCard. This is urgent. We need to discuss the payment.”

Don’t panic. Keep calm. Never ignore a call from your creditor or debt collector. Never hang up abruptly once they identify themselves.

Being evasive doesn’t look good on you, and anyway they will keep trying to contact you. It’s better to find out why they are calling you.

Do you have the time to talk?

If you’re too busy, request a call back at an agreed date and time convenient to you.

This also gives you time to prepare for the next call (get ready with a pen or recorder to record what transpires during the conversation).

Collector: “We have to solve this today. Otherwise, I have no alternative but to forward your file to a higher level.”

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Remain calm even if it sounds like a threat. Stay in control and don’t lose your temper or composure. You can complain to the creditor and authorities if the debt collector is harassing you and being intimidating.

Ask how much debt is due. Do not admit that you owe anything.

You: “How much is owed on this card?”

Collector: “RM2,247. Can you tell me why this balance is overdue? I can help you with a payment scheme that would fit your budget?”

Give no excuse or reason to the collector why this debt is overdue. If you do give a reason, you are admitting you owe the debt. Admit nothing.

Furthermore, it’s none of their business why you didn’t pay it. Politely decline the offer of help.

Collector: “I have records showing you owe RM2,247. Can you at least give me a cheque for maybe RM100 over the phone today, so I can mark this account as current?”

Say no. Any payment now will restart the statute of limitations (there is a time limitation if you want to take legal action i.e. six years from the date of default or breach).

Ask the collector to mail you verification of the debt. If you demand proof of the debt, the debt collector must provide this verification.

Don’t give out any information

You: “I’m sorry. I can’t give you that information. Would you kindly send me verification of this debt, and also for my records, would you send me your name and the name of your agency?”

Nicely done. Write this information down.

Collector: “You’re refusing to pay me? I’d hope to resolve this a little nicer but I see I will need to turn it over to our lawyers. This is your last chance.”

Ask what is meant by that. Get he/she to state the threat that is being made for not playing ball.

You: “What do you mean by that? I don’t want to go to court.”

Collector: “It’s exactly what will happen. We will sue you and deduct money from your salary.”

Jot down what was said and cut the call. You were threatened with money being deducted from your salary (aka garnishment). This is an action that cannot be taken without a judgment against you.

You: “Goodbye.” (then hang up the phone)

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Stay calm and collected. Remember the key points when dealing with a debt collector’s call:

1. Answer the call

Dismissing calls from collection agencies will only worsen the situation and can encourage court action. Jot down their name and address so you can send a written cease and desist letter if you want them to stop contacting you

2. Make time to talk

It’s better to concentrate on the call rather than talking with them while busy with other things. Set a date and time to talk.

3. Record the conversation

If you ever face a collector in court, your handwritten notes or recording will prove useful. Keep a communication log.

4. Is the debt collector threatening you?

The law does not permit debt collectors in their collection activities and practices, to use any threatening or intimidating language and behaviour.

5. Do not admit you owe anything

You do not need to make any admissions as it is not to your benefit.

6. Ask the collector to mail you verification of the debt

Confirm the debt is yours before payment. The letter must detail the debt, amount owed as at a certain date, and other information. You don’t want to pay a sum you don’t owe, pay an old debt past the limitation statutes, or be a victim of a collection scam.

7. Don’t give out personal information

If they ask for personal information, firmly decline.

8. End the call

If you have said what you need to and requested information required, then proceed to end the call.

If the debt collector continues to cajole or threaten you with further consequences of non-payment or tries to gather further information, end the call.

The debt collector can use anything you say against you. Keep the conversation brief.

This article first appeared in

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