Debt Collector Scare Tatics

Common Myths and Scare Tactics Used By Debt Collectors

DISCLAIMER: We are not lawyers and are not giving legal advice. We strongly recommend speaking to a professional attorney.

If you’ve been contacted by a debt collector, you may hear all sorts of claims. If this is your first time, you may not understand your rights – and yes, debtors do have rights! Check out these myths and scare tactics used by debt collectors so you can handle these annoying contacts.


Know Your Debt Collector

Myth – Believe Everything You Are Told!

Debt collectors may be wrong – always double check your records make sure you owe the debt. Dishonest collectors may try to collect an old, canceled, or paid off debt. The debt collector is required by law to send you a letter within five days with the creditor’s name, the amount owed, and informing you that you can dispute the debt.

Insist that they send you a debt validation before you pay anything!

Once you receive the debt validation letter, you have thirty days to dispute the debt in writing. The debt collector cannot contact you within those thirty days.

Myth – You Can Pay the Original Creditor

Nope. In most cases, the original creditor and the debt collection company have an agreement preventing the original creditor from accepting payment. In some cases, your debt has been sold to a collections agency.

Myth – All Debt Collectors Work for Real Companies

The debt collector could be a scammer! Often, these people will go after debts that are past the statute of limitations or that are not valid. Get a name, address and phone number and check them out before doing anything.

Always ask for a debt validation before you do anything!

If you are being harassed by creditors and need debt relief, contact Pacific Debt immediately to receive your FREE CONSULTATION.

Find out more details about our Debt Relief Program.

Know Your Debt

Myth – Ignoring a Debt Makes It Go Away

Yes and no. If you can ignore the debt for your state’s statute of limitations, it will go away. However, the damage to you and your credit score will be longer lasting. The unpaid debt will affect your debt score for up to seven years. In addition, the record of your debt stays with the creditor and will keep you from getting another account with the creditor.

Myth – An Old Bill is Not Collectible

This is true…but a debt collector may “re-age” the debt or sue you anyway, hoping you don’t have your records proving the age of the debt, or you won’t bother to read your mail. Always keep debt records. Don’t depend on anyone to keep accurate records for you.

Myth – Small Debts Don’t Get Sent to Collections

Sure they do. It is up to the original creditor whether or not to send your debt to collections.

Myth – You are Responsible for Family Debt

If you are not a co-signer, you are not responsible for the debt.

Debt is not inheritable. When a loved one dies, any debt will be paid first out of the estate. The creditors must be notified about the death and have a limited time to request payment from the estate. If there is no money to pay debts, there is no money to pay them. As long as you are not a co-signer, you are not responsible for the debt.

Myth – Your Debt will Live Forever

States have statutes of limitation for how long your debt is active. These range from three to ten years, depending on the state and the type of debt. A debt collector cannot take you to court for a debt that is older than the statute of limitations.

Depending on your state, a creditor may file a lawsuit against you in
1) your state of residence
2) the state where the creditor is based
3) the state you lived in when you opened the account
4) the state where the outstanding charges were made.

Making a payment or agreeing to a payment plan will restart the statute of limitation deadlines.

Myth – Pay Now and Your Credit Won’t Be Affected

Your credit is damaged already. They can’t take your possessions (unless it is something like a car or your house). If you are in collections, your credit is already damaged.

Read real reviews from our customers and find out how Pacific Debt helped settle their debt.

Response to Debt Collectors

Myth – A Cease and Desist Letter Makes Debt Go Away

It is your right to send a cease and desist letter to the debt collection agency. By law, they must stop contacting you. HOWEVER, that doesn’t mean the debt has gone away. Your debt is still listed on your credit report, negatively affecting your credit score.

The debt collection agency may assign your debt to a new company, invalidating your cease and desist letter.

Myth – You Can Tell a Debt Collector to Stop Calling You

Sort of true – you can if they are calling you at work or at an inconvenient time. You must request in writing that they stop calling you.

A debt collector can only call you between 8 a.m. and 9 p.m. in your time zone. If they call outside this time, tell them they are violating the law and then write down the time and date (and caller’s name). This is a violation of the federal Fair Debt Collection Practices Act (FDCPA).

Myth – Debt Collectors Can Call Your Relatives or Workplace

True and false. If you don’t keep creditors updated with address changes, the debt collector can call your relatives to get your new address. However, they can’t give relatives information about your debt. Keep in mind that they may try to guilt your relatives into paying your debt. This is not legal either.

The debt collector can call you at work unless you tell them not to. They cannot discuss your case with your co-workers or boss. To stop calls at work, send a certified return receipt requested letter telling them not to call you at work. Keep the receipt and a copy of the letter as proof.

Myth – You Have to Give Them Personal Information

Do not give them your bank account number, references, Social Security Number, or work information. They tell you they want to set up a financial statement. What they are really doing is collecting information to find you. DO NOT give them that information.

Making Payments

Myth – Partial Payments Make Them Stop Calling

Sure, until you are delinquent again. If you set up and keep to a payment plan, the calls will stop.

Never ever admit that the debt is yours! That can affect the statute of limitations.

Myth – Paying the Debt Collector Improves Your Credit Score

When you pay off your debt, the debt collector must notify the credit reporting agency that you have paid it. However, it will show on your credit report (up to seven years) that you went to collections. Your credit score will improve but not immediately.

Myth – You Must Pay the Full Amount

Not necessarily. That is what the debt collector and original creditor want, but you may be able to “settle” or decrease the amount you owe. Discuss payment plans or other options with the debt collector and GET IT IN WRITING. Try negotiating at the end of the month as your collector has monthly goals and may be more amenable to negotiation.  Pacific Debt may be able to help you with debt settlement.

Myth – Settlement Will Help Your Credit Score Immediately

Not immediately. Paying off your debt will help your credit score in the long run.

Myth – Making Payments Restarts the Credit Report Time Limit

No. The credit report listing is based on your original delinquency date. It generally stays on your credit report for up to seven years.

A payment does restart the statute of limitations time limit.

Myth – You Must Make a Big Down Payment Immediately

Your debt collector is probably working on commission. Your large down payment is part of that commission. You do not have to make a large down payment!   

You may also be threatened with awful outcomes if not paid within a certain amount of time. It is a tactic to get you to pay quickly. Threats are not legal!

Know Your Rights

Myth – You Can Go to Jail for Having Debts

No. This is not legal and not true. If the debt collector makes a threat, you have grounds for extortion.

However, you can go to jail in some states for overdue child support or for failure to appear in court if summoned to a hearing about your debt (see summons letter)

Myth – Debt Collectors Can Garnish Your Wages

This is false. Your wages can only be garnished via a court order or if the debt is a federal student loan. Even then, the amount garnished is limited to 25% by law.

Myth – Business Debts are Protected by the Fair Debt Collection Practices Act

Both the FDCPA and your state’s FDCPA (if they have one) only cover consumer debts. States generally have statutes for commercial debt collection.

Myth: State Lines Don’t Matter

If you have a judgement against you and you move to another state, debt collection agencies can’t pursue you for non-payment of the judgement. It is expensive and time-consuming for them.


Always take what a debt collector is telling you with a grain of salt. Double check, verify, get it in writing, and don’t admit anything. Keep good records.

If you are being harassed, contact an attorney. If you need advice, contact an attorney.

We are not attorneys and are not giving legal advice.

If you are ready to deal with your debt, Pacific Debt may be able to help. Contact one of our friendly and knowledgeable staff members to discuss your situation. If we can’t help you specifically, we will refer you to a trusted partner suited to your unique situation.

Our Debt Specialists can help you explore your alternatives to bankruptcy, including debt consolidation and debt settlement options.


Free Consultation
close slider

See How Much You Can Save

Start saving today! Get a personalized plan from Pacific Debt, the leader in debt relief with an A+ Rating from the BBB.

How much debt do you have?

Click to estimate

See Savings

100% free savings estimate and will not affect your credit