'Cease and Desist'…..what is it and what is it for?

When legitimate credit card bills remain unpaid for a long time and when, according to the creditors, account holders do not seem to pay them back, the creditors generally sell these accounts to a third party to collect the unpaid money from debtors. These third parties engaged in collecting the money for the original creditors are called Collections agencies. Usually an account is sold to a Collection agency when it is charged-off i.e. delinquent for over 6 months.

These collection agencies, in order to collect the unpaid bills, apply unethical and unscrupulous methods forcing the customers to pay. They at times go to the extent of threatening people with dire consequences, if they disagree to pay the unpaid bills. They will call you day and day out, even on Sundays and holidays. They do not bother what plight you might be in. They always want a positive answer from you. If not, they will harass you back and continue to do so until you succumb to their harassment and threats. Sometimes, you may get a call for someone whom you personally do not know or you are no way responsible for that person’s finances. Your days will be horrible and your employment may also be at jeopardy, as they do not leave your place of employment as well. So unbearable the days become.

Is there any way to stop them?

Yes, the Federal Law protects you from such incessant harassment from Collections agencies. To deal with such collections agencies, you should first know the law about it. Do remember that legitimate collections agencies cannot sue you for non-payment. You are not indebted to them. They work on behalf of your creditors and get a percentage of the amount they are able to collect from you. It is a deal between your creditors and the concerned collections agencies; not between you and them. They might often come up with expressions like, ‘We will drag you to courts if you don’t pay; we will send cops to your house to collect money; your credit report will be screwed up for the rest of your life; you will never get a loan or credit cards in your life….. and the like. Do not bother to heed such threats. You can actually prevent them from such disturbances. The law is there.

What’s the law?

When you are getting repetitive harassment calls from collections agencies who claim to have authority to your debt, ask them first not to call you again regarding this matter in a polite manner. However, if they do not keep your request and continue to harass you, show them the laws. Tell them to cease and desist any contact with you whatsoever. They are not permitted to contact you or any of your relatives, friends regarding your accounts. Tell them that they will receive a formal cease and desist letter instructing them to stop any further communication with you. They, however, can contact you under the guidelines mentioned in the federal law. Send the cease and desist letter after that. Make sure to send the letter via certified mail (PS Form #3800) with a return receipt (PS Form #3811) to substantiate that the letter is sent and it is received. Keep a copy of the letter for your future reference. Remember, even an attorney who may also collect the same debt, will be bound to follow this rule. So don’t be intimidated if you hear anything from an attorney regarding the collections. Once they receive your letter, they may contact you to notify that all contacts with you regarding this debt will be stopped henceforth. Instruct them that failure to this notice will result in filing a complaint with the Federal Trade Commission and the States Attorney General's office. They will now stop calling you, as they too know the significance of the cease and desist notice. Now relax a little and take time to negotiate a settlement with your original creditors for your unpaid debt. This is for your safer future. All the best.