Things You Should Avoid When Paying a Debt Collector

Debt collectors have their own preferences when it comes to collecting debts. When you are making payment to the debt collector, there are certain things that you must not do. Sometimes, despite all the precautions that you take, things can still not be in your favor. Some methods of payments are much more riskier but the collector may insist on that method as it is more convenient for him. Take care and read below to know what you MUST NOT DO when paying a debt collector:

Making Payment Without Debt Verification

Ask the debt collector to provide proof that he owns the debt. Paying even a portion of the debt without verifying if you actually owe it, is as good as accepting that you owe the debt. If it falls outside the statute of limitations, your repayment will restart it. Therefore, do not make the mistake of paying without verifying the debt.

Granting the Permission for Auto-Debit

Your collector may want to know the details of your checking account or auto debit permission. It gives them the freedom to access your account any time they want. Mike Arman, a retired mortgage broker, advises never to give permission for auto debit. The problem occurs when your debt is to be repaid in installments and your account has insufficient balance at the time of auto debit. Your trouble then doubles because you not only have not paid your debt installment but you also have to pay overdraft fees to the bank.

The auto debit facility gives the collector the freedom to withdraw more from your account “by mistake”.

Give Post-dated Checks

Making payments by post-dated checks may seem like an easy way to repay your debt, as the collector cannot deposit it before the due date on the check. If he intends to deposit it before the date on the check, he should inform the consumer well in advance but debt collectors rarely do so. This is a big risk for the consumer. Therefore, avoid paying the debt collector by post-dated checks.

Give Your Debit/Credit Card Details

The debt collector can ask you for your debit or credit card number and details to collect the payment. This can again cause problems for you like if there is insufficient balance in your account, the bank will charge you overdraft fees. In another scenario, if the collector draws more money using your debit card details, you cannot prove that it was done without your permission. As it was you who had given the collector your details, you cannot press charges either. This will leave you totally in his clutches.

Use Credit Card to Pay

Paying by credit card will leave you with enough proof of having paid the debt collector but you will incur a new debt in the process. This is an unwise step to take. If you are short of money, consult a debt counselor who will help you to pay off your debts by negotiating on your behalf. But put away your credit card for the time being.

Make Payments via Money Transfer

Money transfer can be done using three major companies i.e. Western Union, Bank of America and MoneyGram. But there is no process of tracking your payments. Also the fee charged by these companies is not known clearly. It is also believed that this method of payment is unsafe and is used by scammers. FTC warns consumers against these methods and recommends that consumers should avoid making debt payments via Money Transfer.

The debt collector may prefer these methods of payment but be sure to hold your ground and insist on making the payments in the way that is convenient for you. If you have any doubts, consult a credit attorney. Keep records of all correspondence and ask the debt collector to acknowledge payments in writing. When you are careful about your finances, you cannot go wrong.