Everything You Need to Know About Debt Collectors and Your Rights
Debt collection is a whopping $11.5 billion industry, and around 28% of Americans currently owe money and are being sought out by a third party debt collection agency, according to the Bureau of Consumer Financial Protection (BCFP).
Debt collectors often prey on creditors' ignorance. In 2018 alone, the Federal Trade Commission (FTC) banned 32 companies and individuals from ever working in debt collection again for malpractice. The best course of action when you first become late on a payment is to make sure you know the laws and your rights when it comes to handling debt collection.
A debt collection agency is a separate third party from the original creditor to whom you owe money. At some point of time (usually no sooner than 90 days), creditors often turn over unpaid loans to the debt collector to pursue the customer in an attempt to receive payments. Debt collection agencies often buy out a portion of the unpaid loan from the creditor, or they may receive a percentage of the money if and when it is paid.
Debt collection is a civil, not criminal matter. This means the police will not get involved, and you will not go to jail for failure to pay on loans.
What to Do First When Contacted by a Debt Collector?
First, get the information validated with the collector in writing and make sure it is something you truly owe. Also verify that it is for the correct amount (take note that sometimes debt collectors offer a discounted payment if you pay in full).
The majority of debt collection agencies have an agent reach out by phone for the first contact, even before mail. No matter what, make sure not to say anything that can be considered an admission to owning the debt during this call.
Do not give out any personal info—they will ask for it, but you don't have to answer their questions.
Get as much information from the caller as you can, including their name, the agency they work for, their address, and phone numbers they can be reached at.
Always ask the caller to send you a written statement regarding what they say you owe. If they ask for your address, do not give it out. A genuine debt collector would already have that info. By law, the debt collector is required to send this written notice within 5 days of contacting the debtor.
Keep a log of every call you receive along with any documentation from debt collectors, and be sure to include the date, time, and any pertinent information from the call for your protection.
Know Your Rights
Consumer debt collection agencies have been known to be aggressive to get their "sale," but laws protect the rights of consumers in regards to debt collection.
The Fair Debt Collection Practices Act (FDCPA) governs the behaviors and actions of third-party debt collectors attempting to collect payments on behalf of a creditor. Under this law, debt collectors are in violation of law if they do any of the following:
- Debt collectors are limited in the hours they can reach out to the debtor. They cannot call you before 8 a.m or after 9 p.m unless an arrangement has been made with the debtor.
- Initially, debt collectors can attempt to make contact with a debtor through their place of employment. However, either a verbal or written statement telling the collector to stop contacting you at work barres the debt collector from reaching out to you through your place of employment again.
- You can also request the collector stop calling your personal phone. This must be submitted in a written request to be upheld. (Tip: send this request by certified mail).
- Debt collectors are allowed to reach out to known contacts of the debtor to try and obtain their contact information. However, it's wise to note that legally they cannot discuss what they need the information for or even the fact that they are a debt collector. Additionally, debt collectors are only allowed to reach out to third-parties as such one time each.
- Debt collectors are prohibited from using any means of harassment to collect on a bill. They can not make any threats such as arrest or bodily harm, and they also are barred from using obscene language.
- Debt collectors cannot threaten to garnish wages without the presence of an active judgement (court order) against you. Likewise, they cannot threaten to sue you without the intent and therefore proof to go through with it.
Statute of Limitations
Under state laws governing statute of limitations, creditors and debt collectors have a limited amount of time to file a lawsuit to recover a debt.
In most states, debt collectors can still attempt to collect on a debt after the statute of limitations; however, they have no legal recourse to sue you.
It is important to note that the court doesn't keep track of statute of limitations. This means that a debt collector may still attempt to sue you after the statute of limitations expires. If a debt collector attempts to sue after the statue of limitations expires, it is your responsibility to know and provide this information to the court.
The time period for statue of limitations varies by state. Typically most states range from three to five years, but some go as high as ten or fifteen. This differs entirely from the timeline that a collections bill stays on your credit report, which is typically seven years.
The Consumer Financial Protection Bureau (CFPB) has sample letters for use when corresponding with debt collectors, which you can find here.
For specific laws in your state, contract your Attorney General's office. If you believe a debt collector has either violated laws or made false claims against you, you can file a complaint with the CFPB, FTC, and the Better Business Bureau.
Looking for a job? In addition to encountering those annoying never-ending job interviews you may find yourself face-to-face with an artificial intelligence bot.
Companies worldwide increasingly use artificial intelligence tools and analytics in employment decision-making – from parsing through resumes and screening candidates to automated assessments and digital interviews. But recent studies claim that AI does more harm than good.
While AI screening tools were developed to save companies time and money, they’ve been criticized for placing women and people of color at a disadvantage. The problem is that many companies lack appreciable diversity in their data set, making it impossible for an algorithm to know how people from underrepresented groups have performed in the past. As a result, the algorithm will be biased toward the data available and compare future candidates to that archetype.
The City’s Automated Employment Decision Tools (AEDT) law is designed to offset the potential misuse of AI and protect job candidates against discrimination. It was enforced on July 5th, 2023 in New York City - with other cities and states expected to gradually follow suit. Employers must now inform applicants when and how they encounter AI. Furthermore, companies have to commission a third-party audit of the AI software used, and publish a summary of the results to prove that their systems aren’t racist or sexist. Job applicants are able to request information regarding what data is collected and analyzed by the AI. Violations of the law can result in fines of up to $1,500.
Replacing Human Hiring Decisions
However, should a job applicant want to opt-out of such impersonal judgement by a bot, the new law's scope is quite limited.
While the law specifies that instructions for requesting an alternative selection process must be included in the AI screening disclosure, companies aren't actually required to use other screening methods. Not to mention that the law only applies to AI in hiring and not any other employment decisions. It also wouldn't apply if the AI, for example, flags candidates with relevant experience, but a human then reviews all applications, making the ultimate hiring decision.
Some civil rights advocates and public interest groups argue that the law isn’t extensive enough and that it’s even unenforceable. On the other hand, businesses say that it’s impractical, costly, and burdensome, and that independent audits aren’t feasible.
Responsible use of AI in hiring
Although this law may be a good first attempt to assign more regulatory guardrails around AI, it remains to be seen if it ensures the responsible use of AI in hiring processes. At the end of the day, perhaps recruiting talent should remain a human-made decision.
The good news is that AI can help companies without harming potential job candidates in many ways – such as connecting new employees with internal organizational information and company benefits during onboarding. Or helping employees to do their jobs more effectively rather than replacing them.
There’s all this talk about solo travel. And for good reason — no wasting precious time waiting for others to get their act together, take the plans out of the group chat and actually buy the tickets. Going solo, you can be spontaneous. You can plan your trips according to your precise tastes. You can hop on any flight and fly awayyyyyy.
But what if each time you flew you’d get a free ticket? That’s what you get with the Southwest Companion Pass.
Award status, upgrades, lounge access — there are many perks in the frequent flier game. But one of the coveted holy grails is the Southwest Companion Pass.
What is the Southwest Companion Pass?
The Companion Pass is part of Southwest’s Rapid Rewards program. You get to choose one person to be your “companion,” and they fly with you for free (plus some taxes and fees) on every flight. That’s right. Two for the price of one. That’s half off each ticket if you split it! Whether you’re flying with a partner, family member, friend, or anyone else, they can tag along for free.
And it gets better: once you earn the pass, you can reap the rewards for that full calendar year … AND the next. That’s why people go mad trying to earn a companion pass during the early months of the year. The sooner you qualify, the longer you can use it.
There are also no blackout dates. There are no limits. And if you didn’t purchase the ticket (think: work travel, your companion, or a generous benefactor), there are no restrictions! As long as you’re the one on the plane, your companion can also … be on the plane.
You can also switch out your designated companion 3x a year. So, no need to stay in a relationship simply to get the most out of your companion pass! Ghost and fly away — with a whole new companion!
If this sounds too good to be true — it’s not. But there is one small catch. It’s kinda tough to earn this mega reward.
How to qualify for the Southwest Companion Pass?
You can qualify for the pass in one of two ways:
- Fly 100 qualifying one-way flights
- Earn 135,000 qualifying points in a calendar year.
Clearly, this is no small feat — especially if you’re trying to qualify ASAP.
So how do you actually earn the Southwest Companion Pass?
Don’t worry, there’s a path to earning this amazing reward without climbing on 100 flights or spending an exorbitant amount of money.
Earning 135K reward points may seem completely impossible, but it’s easier than it sounds. Simply sign up for a Southwest Credit Card and turn those spending habits into a rapid rewards account. Through the Rewards Priority Credit Card, earn points when using local transit and commuting, plus score major points and miles whenever you spend.
Stay with me here. This is not some scheme to get you into credit card debt. Many airline cards come with potential savings, giantic rewards, awarding you points, and cashback with every purchase you make that can be redeemed for travel. And often they can come with passive sign-up bonuses. If you spend a specific amount of money within a certain timeframe of opening the card, you can be in for a windfall of points.
Now that’s where the companion pass comes in:
- Southwest Rapid Rewards Premier
- Southwest Rapid Rewards Plus Credit Card
- Southwest Priority Credit Card
- Southwest Rapid Rewards Premier Business Credit Card
- Southwest Performance Business Credit Card
Southwest has three personal cards and a business card. Each of these cards offers rewards between 30K-80K points. In the past, people could open two cards and get a bonus that granted enough points to almost meet the minimum. However, with new restrictions on personal cards, you can only get one bonus every 24 months. Boo!
However, this doesn’t apply to business cards. If you’re eligible, have good credit, and not likely to spiral into insane credit card debt, you can open a business card and a personal card, and accrue 100K+ points. The Rapid Rewards Priority Credit Card will get you points after you spend money in no time.
Now to earn the rest of them.
The secret to gaining these credit card points is to plan your card sign-ups around big purchases. Just before a recent move, I opened a card . . . and the rewards came rolling in — a small balm to ease the pain of how exorbitant moving can be.
Put everyday spend — especially big purchases or bulk items — on your Southwest credit card and watch your award points quickly add up. Typically, you earn 1 point per $1 spent on your Southwest card and 2 points per $1 on actual Southwest purchases.
But there are other ways to earn points, including:
- Flying Southwest: Booking travel on Southwest earns more points. The cost of this travel will be worth it with your companion pass
- Shopping from Rapid Rewards Partners: Purchases with Southwest’s “Home & Lifestyle” and “Shop and Dine” Partners also earn Companion Pass qualifying points. While you shouldn’t make gratuitous purchases, browse Southwest’s partners to see if you could earn extra points for items you'd be purchasing anyway. All this, simply from enrolling in their Dining Program and shopping with their partners.
So there you have it! And since it’s almost Spring, get to earning and soon you’ll be flying two for the price of one!