Can you send a cease and desist letter to a collection agency?
Are you in the midst of conducting research about how to deal with debt collectors? If so, you have probably run into many sources that recommend that you send a cease and desist letter.
It is true that if you send a cease and desist letter that the collection agency can only contact you by phone one more time after receiving it to confirm its receipt and to educate you about any actions they intend to take.
So from an elimination of phone calls and harassment perspective, it serves its intended purpose. However, it also has a high probability of creating a negative reaction.
Cease and desist letters increase your chances of being sued
The reaction is quite simple: when you send a cease and desist letter to a collection agency, collection attorney, or to your original creditor, you leave them only one way to effectively collect from you: filing a lawsuit.
Sure, they could just send you letters, but that's not cost effective for them. Nor is it effective for generating collections and subsequent revenue. There is very little reason for a collection agency to continue to service the account if they don't have the option to call you.
So the reaction that may be created is that they may forward the account back to their client (either a junk debt buyer or the original creditor) and then the junk debt buyer or creditor will either forward it off to another collection agency or a local collection attorney for possible suit.
Please keep in mind, the account may be more likely to be forwarded to a local collection attorney since you have already sent a cease and desist letter in the past. Simply because to the owner of your debt - if you sent it once, you're more likely to send it again.
And when you consider their agenda of wanting to collect from you as quickly as possible, it just makes sense for them to pursue with an approach that a cease and desist letter cannot negate: a lawsuit.
It is important to note that if you possess any attachable assets (or if they're familiar with your place of employment), your chances of this occurring will be much greater than if you don't.
What if the accounts have exceeded statute of limitations?
I would send a cease and desist letter if you prefer to no longer receive phone calls. The reason: if the accounts have exceeded your state’s statute of limitations, the statute can protect you and these risks should no longer exist.
In some states you have to be careful about what you say in any written communication to debt collectors. It's important to become aware of your state's law regarding acknowledgement of debt and renewing the statute of limitations prior to mailing any correspondence. See my article about acknowledgement of debt and the statute of limitations for a list of links to the specific state laws regarding this.
So what should I do if I can't handle these collection calls?
Well first off, if debt collectors are calling you at work, a verbal request for them to stop calling you there "should" suffice.
Cease and desist letters are only necessary when you would like to stop the calls to your home or cell phone.
By law, collection agencies must honor a verbal request to stop calling you at your place of employment, but I say "should" because some debt collectors are more aggressive than what the law permits and they may ignore your request.
So the smartest thing to do when you make a verbal request for them to stop calling you at work is to write down the name of the collector you spoke with, the company they work for, their phone number and extension, and the date and time the call took place. Then keep this information in a safe place so you may reference it later.
If any representative from that company calls you at work again, after you have made this verbal request, you will want to again document the above information, advise them of your request not to receive calls to your place of employment, and then hang up and call an attorney to discuss your options for recourse.
When you call an attorney, make sure to locate an attorney that specializes in F.D.C.P.A. (Fair Debt Collection Practices Act) defense, and preferably one that is local to you. Also be sure that they offer free consultations.
What if I can't handle the calls to my cell or home phone?
Before I get into the specifics, I want you to have a better understanding of what percentage of collection accounts are typically collected.
This may be a shocker to you: cumulatively speaking, approximately 80% of delinquent accounts are never collected. You read that right: 80%! Think that sounds crazy? Read it for yourself from the Consumer Financial Protection Bureau.
On the bottom of page 42 it states: "a recent survey found liquidation rates ranging from 12.0 to 28.8 percent depending on the type of debt being collected. ACA International, 2012 Agency Benchmarking Survey, at 21%."
On the bottom of page 43 it states: "The five publicly traded debt buyers’ portfolios appear to yield, on average, 17% of their purchase price five years after purchase."
Here's something else you may find shocking: based off of my experience, approximately 40% of collection accounts are verbally communicated with. Meaning that approximately 6 out of 10 consumers that are in collections never answer their phone.
Back to what to do if you can't handle the calls to your home or cell phone: use technology.
Your number one priority is to achieve your goal of fewer calls without putting yourself in an adversarial situation with your creditors.
You want to mingle with the thousands to tens of thousands of other accounts that the collection agency is servicing.
If you send a cease and desist letter, you single yourself out and cause the collection agency or the creditor to segregate your account from the general population of collection accounts. And by doing so, you put yourself up against a much more sophisticated collection process.
You want to be a little fish in a big ocean rather than a whale in a fishbowl. It's important to not disconnect your number or block the calls. If the number the collector is dialing is either disconnected or blocked, you will cause them to start skip tracing (investigation to locate your home, cell, and work phone - this may involve phone calls to your relatives - although, it is unlawful for them to disclose the nature of their call) you for a new number. Whereas if they encounter a voicemail, they will generally just continue to call.
The technology you can use as an alternative to sending a cease and desist letter is as follows:
Alternative #1: Cell Phones
iPhone: Don't block calls, but silence them with a silent ringtone. This will still allow the calls to come through, but will silence the ring so you won't even notice. To set this up, download this iPhone silent ringtone (be sure to right-click or cmd-click and "Save As"), import it into iTunes, and sync it to your iPhone. On your iPhone, add the number you want to block/silence to your contacts and set the silent ringtone as that contact's custom ringtone. Source: iphonefaq.org
Android: If you want to send callers straight to voicemail on stock Android, the process is pretty simple. Go to the contact in question and hit Menu > Options and then check Incoming calls (send calls directly to voicemail). All Android smartphones should have some variation of this option to auto-reject calls from specific contacts. Unfortunately sometimes carriers mess around with it because they want to offer services of their own. You’ll generally find call blocking options in Parental Controls for all the major carriers, but they might charge you for the privilege. Source: Digital Trends
For all other cell phones: Call your service provider and ask them if you can forward specific phone numbers straight to voicemail.
Alternative #2: Landline Phones
Again, you don't want to block the calls so they don't start skip tracing for more information about you.
If the calls are relentless, your best bet is to turn the ringer off and screen your messages. You'll want to direct everyone that you want to hear from to your cell phone. Or, you could forward all of your landline calls to your cell phone and then the specific numbers you want to go straight to your cell phone's voicemail should do so.
Privacy Manager can also be very useful if the debt collector is calling your landline from a blocked or private number. Call your phone company to inquire on its cost, availability, and specific options.
If you don't get the greatest cell phone reception at home, you may want to look into a cell phone signal booster.
Please keep in mind that I am in no way encouraging you to not communicate with your creditors. I'm of the mind that you should do so. When you're employing the above-strategies you should still reach out to your creditors to find resolution.
If you ignore your creditors they may still sue you, but the chances of being sued are significantly less than if you send a cease and desist letter.
Debt collector harassment creates a lot of stress and negative emotion that can impact all areas of a consumer's life. So I understand your situation and how you may desire to minimize the calls in an effort to reduce some of the stress that you're experiencing. Which is why I took the time to write about this.
The entire premise of my perspective is that when you're behind on your bills, you're in a weak position. And because of that weak position, you are less likely to be financially prepared to properly react to any escalated collection events.
Can you afford to pay an attorney to defend yourself right now? Or would you fall into the category that 90% of all people who are sued on delinquent debt fall into? That being: doing nothing and losing by default.
And even if you could afford an attorney: what is the likelihood that they would successfully defend it? It puts you in a world of uncertainty.
It's a horrible situation to be in. And it's a situation that is potentially avoided if you don't choose to put yourself in an adversarial situation to begin with. Cease and desist letters unfortunately do that.
If you’re wondering about what information debt collectors may know about you, please see my article on how to talk to debt collectors.
If you are thinking about offering a settlement in writing, please see my article on debt settlement offer letters.
I hope this information about cease and desist letters helps you. Please feel free to contact me.