1. Must the original creditor (the business or person to whom the original debt is owed) notify me before turning my account over to SCB, Inc.?
The creditor is not generally required to let you know it is referring your account to a collection agency. There are rare exceptions to this rule.
2. How can I find out what the bill is for?
Within five days of an account being placed with SCB, Inc., our office will mail a written demand notice to you which will include the following information: (a) the amount you owe, (b) the name of the creditor, (c) the process to follow if you dispute the bill and (d) contact information of SCB, Inc.
3. What should I do when SCB, Inc. contacts me?
It is important that you respond as soon as possible. If you don't, our agency may keep trying to reach you to collect. lf you legally owe the bill, you should arrange to pay it as soon as possible.
4. Why can't I just continue making payments to the original creditor to whom I owed the money?
In California, once the debt has been assigned to a collection agency, it is the collection agency that is entitled to receive all payments. The collection agency becomes the "owner" of the debt you owe. The collection agency is responsible for collecting the debt and is the only one who can agree to payment terms.
5. When can a collection agency call me?
An agency may only call at hours presumed to be convenient for the debtor—generally, between 8 a.m. and 9 p.m. If these hours are inconvenient for you, you may ask the agency to contact you at other times. There is no law that specifically limits the number of calls an agency may make to you, but repeated calls over a short period, which may be annoying or harassing, are prohibited.
6. Can a collection agency contact other people and discuss my bill?
Although a collector may call others to try to locate you, he or she may not discuss your account or debt status except for your spouse, attorney or person necessary to enforce a judgment.
7. Can a collection agency contact my employer?
An agency may contact an employer, but only for the following reasons:
- To communicate with you at your place of employment.
- To verify your location.
- To garnish your wages once you have been taken to court and a judgment was entered against you.
- To find out whether you have medical insurance to cover a medical bill.
8. Does an agency have to accept partial payments?
No. A collection agency has the choice of demanding the whole amount or taking payments on the bill. It will want to know your actual ability to pay the debt. The agency can set what it is willing to take for the amount of the payments and how often you will be required to make them.
9. As long as I am paying something every month, doesn't the collection agency have to take my payment?
No. The agency's responsibility is to collect the debts assigned to it. The agency will want to have payments made pursuant to an agreed plan, so it knows when to expect payment, and when the debt will be paid in full.
10. The collection agency has agreed to take payments. Should I get it in writing?
If the collection agency wants the payment agreement to be in writing, they have the right to require you to sign a contract as a condition of accepting payments. This can be a protection for both of you as long as you make the payments under the contract.
If you make your payments on time and pay the agreed amount, the agency cannot change the way they are collecting the bill or demand more money. But, if you fail to make the payments according to the contract, the collection agency could then demand payment of or sue you for the entire remaining balance, not just the defaulted payment.
11. What if I can't make the payments I agreed to make?
If possible, contact the agency before you miss a payment or send a partial payment. Explain the problem and what you plan to do to solve it and catch up on your payments. Many agencies will work with you, especially if you've already made several payments on time. In most cases the agency will add a late payment fee to your account, if you fail to make the payment on time.
12. What if the bill has been paid, I do not owe the bill, or I am not the person the collection agency is looking for?
If you do not owe the bill, or if the bill has already been paid, send the agency a written explanation along with copies of receipts, cancelled checks and any other information to back up your claim. It is important to send your letter within 30 days after your first contact from the collection agency. Once the agency receives your dispute letter, it must stop further attempts to collect the debt until it sends you written verification to show that you do owe the bill and that the amount of the bill is correct. If you are questioning only a part of the bill, the agency may not continue to collect on that part until it has provided verification, but you must make arrangements to pay the rest of the bill.
If you are not the person the agency is looking for, write and explain the mistake. You may be asked to provide a driver's license or social security number to prove that you are the wrong person. If you are unsure about your legal responsibility for a debt, check with an attorney.
If the collection agency is unable to obtain verification that you owe the debt, it may return your account to the creditor and stop collection efforts.
13. Can a collection agency sue me?
Yes. If a judgment is obtained by the agency you may be liable for additional expenses for court costs and/or attorney fees.
14. Can a collection agency report my account to a credit bureau (i.e., Experian, TransUnion or Equifax, etc.)?
Yes. Most collection agencies, though not required by law, provide a brief period after receiving your account before reporting it to the credit bureaus. Therefore, it is important that you make immediate contact with the agency to resolve the matter before any negative information is reported about your past due account.
15. If I pay a bill to the collection agency in full, are they required to delete their negative report on my credit?
No. They are required to show it as "paid collection." The credit reporting agencies prohibit deleting a reported debt merely because it was paid.