If you are like most people, you have dealt with or are currently dealing with debt collectors. I’ve been preaching about the dangers of debt collectors for years and get countless emails from readers who end up in trouble by answering the phone when a debt collector calls. So, how should you deal with debt collectors? Here are some specific things you should keep in mind if you end up on the phone with a debt collector.
How To Deal With Debt Collectors In 5 Steps
Remember, debt collectors, care about one thing getting you to pay them so they can earn a commission check. Nonetheless, it’s been my experience that when you equip yourself with the correct tools, dealing with debt collectors can be very easy. Here are 5 ways to deal with debt collectors, even when you can’t pay:
Tell Them You Know Your Rights Under Federal Law!
Regardless of what a debt collector might tell you, you have a lot of rights when it comes to how debt can be collected. In fact, merely mentioning that you understand your rights will, many times, stop debt collectors in their tracks. Your rights come from the Fair Debt Collection Practices Act (FDCPA). This act lays out the rules debt collectors must follow when they attempt to collect a debt from you. Unfortunately, because so many people are unaware of their rights, collectors many times ignore these rules. They certainly wont inform you of your rights.
Therefore, youre in a good position when you tell the debt collector you are aware of The FDCPA and that any violation will be documented and forwarded to the Federal Trade Commission (FTC) as well as the Consumer Financial Protection Bureau (CFPB) and your State Attorney Generals office.
If this sounds overwhelming, you can reach out to a credit expert.
The team at creditsaint.com is very professional and they do this all the time.
It costs some money but is less expensive than you might think
considering you are getting your own professional to fight on your behalf.
Talk to Credit Saint
Don’t Allow Them To Provoke You
Debt collectors often dont need to resort to tactics that break the law. They play with your emotions, tapping into your existing fears and stigmas about debt collection. Agents can simply imply threats, and thats often enough to prompt payment, such as threatening to call your employer and set up wage garnishment arrangements. But, under federal law, a legitimate debt collector must first successfully sue you in civil court to be able to garnish your wages. This is why its so important to know your rights.
Most commonly, a debt collector will try to make you feel guilty, implying youre stealing or not doing your part as a responsible citizen by not being able to pay your medical bills or credit card debt. Don’t fall for this nonsense. It’s all an act.
When this doesn’t work, an agent may switch strategies and try to make you so angry youd rather just pay up than continue dealing with the agency. So, just stay calm and cool. You can be professional even if the agent on the phone seems to be running a scam.
Knowing how to spot a scam debt collector can help keep you safe. The FTC covers this on their website.
Some of the warnings signs include if they:
Request Debt Validation
There are several things you should be looking at before agreeing to make any payment. Regardless of whether you receive a debt collection notice via a letter or a phone call, you need to make sure the debt and its full amount are accurate. So before you do anything else, send the collector a debt validation letter.
This letter is allowed by the Fair Debt Collection Practices Act. In the letter you request the collector prove you owe the money. You have to send the letter within 30 days of your first contact with the collector. If the creditor cant prove you owe the money by providing accurate information, including account numbers, you have a strong case for getting it off your credit report and your credit score could improve significantly. Not everything that you see on your credit report is guaranteed to be correct. In fact, a FTC Study found that Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans, so making sure that your debt is validated is a good step to take.
Another thing to look for: outlandish late fees or additional interest added to the original debt amount from the original lender or credit card issuer. Remember that in most cases you can negotiate to significantly reduce, or even eliminate these fees.
Try To Negotiate On Older Debts
The next time a collector contacts you regarding a year-old debt, don’t be afraid to offer them a debt settlement of pennies on the dollar. For example, if you owe $, try offering a $ payment to settle. Many collection agencies purchase old debts from various companies after the company has written off the debt. Therefore, even if the settlement amount may seem small, keep in mind that as long as the collection agency makes a return on their investment, they will be happy. This normally requires a lump sum but an agency may agree to a payment plan.
If the debt is still on your report, you should ask the creditor to remove the negative item from your credit report in exchange for your payment.
All Agreements Should Be Made In Writing
Debt collectors are notorious for making false promises, reneging on agreements, and even clearing out people’s bank accounts which can ruin your personal finances. All of these things can happen when you make verbal-only agreements with debt collectors over the phone. Protect yourself by never making agreements with debt collectors over the phone. Simply tell them to send you everything in writing or via email and then hang up. Unless you have agreements in writing you cant prove you ever had an agreement, to begin with.
3 Things You Should NEVER Say To A Debt Collector
In your process of dealing with debt collectors, its also very important to keep a note of what you should not share with them. Here are 3 things you should never reveal to a debt collector:
1. Never Give Them Your Personal Information
A call from a debt collection agency will include a series of questions.
The agent will ask for personal information to confirm your identity and your ownership of the debt.
You dont have to answer these questions. Instead, ask the agent to communicate with you only in writing.
Here are a few more personal things you shouldn’t provide to debt collectors:
- Additional Phone Numbers (other than what they already have)
- Email Addresses
- Mailing Address (unless you intend on coming to a payment agreement)
- Employer or Past Employers
- Family Information (ex. spouse’s employer or phone number)
- Bank Account Information
- Credit Card Number
- Social Security Number
2. Never Admit That The Debt Is Yours
Even if the debt is yours, don’t admit that to the debt collector.
There is no reason to do this, and it could get you in trouble later on if you try to dispute the debt on your credit report as inaccurate.
Many times old debts have fraudulent interest charges that you aren’t obliged to pay, but debt collectors will attempt to collect anyway.
Again, it’s best to tell the collection agent to send you the information in writing and then hang up. You have the right to do this, and we’ll talk about that in a minute.
Get a Free Copy of Your Credit Report
3. Never Provide Bank Account Information
A debt collector will try to convince you to make a payment, even a small payment, while youre on the phone. The agent will need your bank account or credit card number to make the transaction. It might seem like a quick and easy way to end the conversation and get off the phone. But this can cause a few big problems:
- You Lose Leverage: Your payment is your leverage for dealing with debt collectors later. So dont make a payment prematurely and give away your best bargaining chip. Save it for later when you can get something in return such as asking the creditor to remove negative items from your credit report in exchange for a payment.
- You Share Account Details: The agent may say he or she will not store your bank account or credit card number. But you have no way of knowing whether this is true. Debt collectors have also charged more than you agreed to pay.
- You Reset the Statute of Limitations: By making a payment you reset the statute of limitations on the debt. This gives the creditor more time to sue you for losses later.
If you want to pay off the debt or enter a payment plan, thats OK, especially if payment is part of your broader debt management plan. But get an agreement in writing first.
What Debt Collectors cant do
Weve covered some of the tactics that debt collectors might use to pressure you in to paying debt. Its important to know how to handle these pressure tactics but its also important to understand that a lot of these are actually prohibited under the FDCPA. You can feel secure about pushing back because as the FTC states:
- Debt collectors may contact you only between 8 a.m. and 9 p.m.
- Debt collectors may not contact you at work if they know your employer disapproves.
- Debt collectors may not harass, oppress, or abuse you.
- Debt collectors may not lie when collecting debts, such as falsely implying that you have committed a crime.
- Debt collectors must identify themselves to you on the phone.
- Debt collectors must stop contacting you if you ask them to do so in writing.
Knowing this might provide some peace of mind while navigating such an unpleasant and stressful situation. The Fair Debt Collection Practices Act can protect you, so it pays to know your rights. Its thanks to pieces of legislation such as the FDCPA that abusive debt collection agencies such as The Regional Adjustment Bureau have had to face the legal consequences of their federal law violations.
When Dealing with Debt Collectors, Your Basic Needs Come First
As a general rule, you should never pay a debt collector if it puts your ability to pay for necessities in jeopardy. Always make sure your rent/mortgage, groceries, utilities, and other necessities are paid before you pay off an old debt.
It’s simply not as important, regardless of what a debt collector might have you believe.
Read about the pros and cons of ignoring debt collection calls and letters.
If you're one of the many struggling with debt due to COVID and need a financial plan, try What to Do If You Can't Pay Bills Due to the Coronavirus. If you're a small business owner, start with Overview of Bankruptcy Options for Your Struggling Business During the Coronavirus.
I'm behind on a lot of my bills and debt collectors are starting to call me. I'm also receiving collection letters in the mail. I don't have enough money saved up to pay off the debts. Should I ignore the collection calls and letters?
If debt collectors are hounding you and you don't have money available to pay off your debts, you may be tempted to simply ignore the collectors and hope they go away. However, putting your head in the sand usually isn't the best strategy for dealing with debt. In fact, there are a lot more "cons" than "pros" when it comes to ignoring a debt collector's calls and letters.
Upside to Ignoring the Collector's Calls and Letters
There's really only one upside to ignoring the collection attempts -- the collector may give up and stop trying to get money from you. However, what are the chances of this actually happening? Not good.
The collection agency typically gets a cut from the creditor based on how much it collects (or it purchases the delinquent debt and gets to keep what it collects). In addition, the collection agency's employees usually get bonuses based on the amount they collect from you. This means that the collectors are very motivated to keep hounding you for payment.
If, however, you are judgment proof (meaning you don't have any income or assets the collector can take if it gets a judgment against you) and believe you will be for many years to come, then ignoring or putting an end to the calls and letters might make sense. (See below for information on how to stop collector calls and letters.) To determine if you are judgment proof, see What Does Judgment Proof Mean? or talk to a local debt lawyer.
Downsides to Ignoring the Collector's Calls and Letters
On the flip side, there are a lot of cons to evading a debt collector's attempts to communicate with you. For example:
- Ignoring debt collectors probably won't make them stop calling or writing you. Again, debt collectors only make money when you pay up. This means they're likely to keep trying to get in touch with you even if you ignore them. (On the other hand, under the Fair Debt Collection Practices Act, a collector must cease all communication with you, subject to a few exceptions, if you send it a written request. Learn more about the FDCPA in our article What to Do If a Bill Collector Crosses the Line.)
- You'll hurt your credit. If you ignore a debt collector and don't deal with the underlying debt, the creditor will continue to report the delinquency to the credit bureaus, which will hurt your credit. (Learn more in Nolo's Credit Reports & Credit Scores area.)
- You won't find out if the debt is legitimate. If you receive a collection call or letter, at minimum, you should find out what debt you purportedly owe and, if you don't recognize the debt (or aren't sure the amount is correct), write to the collection agency immediately and dispute the debt. (Under the FDCPA you have the right to request validation of the debt. Learn more in Nolo's Debt Validation article.)
- Your debt will probably get bigger. If you ignore the debt, interest and collection costs will probably be added to your debt. This means that your debt will continue to grow.
- You're missing an opportunity to settle the debt. If the debt is yours and you can't afford to pay it, you may be able to make arrangements with the debt collector to settle the debt for a lesser amount. You'll only be able to do this if you communicate with the collector. The amount that the collector says is due is just a starting point for negotiation. You can often settle the debt for far less than you owe. (To learn more about negotiating with debt collectors, see our Debt Settlement & Negotiating With Creditors area.)
- You might get sued. The debt collector may file a lawsuit against you if you ignore the calls and letters. If you then ignore the lawsuit, this could lead to a judgment and the collection agency may be able to garnish your wages or go after the funds in your bank account. (Learn more about Creditor Lawsuits.)
In the end, it's almost always better to focus on settling the debt or disputing its validity (depending on your situation) rather than ignoring the debt collector's calls and letters.
If you're not able to reach an agreement with the debt collector (or the debt collector tries to collect a debt you don't owe), you should consider contacting an attorney who can provide you with legal advice about your particular situation.
The Truth: Should You Never Pay a Debt Collection Agency?
Summary: When a collector contacts you, respond with a debt validation letter. You may not want to pay a collector if you will never have any income or assets, if you don't owe the debt, if you want to settle for less, if the statute of limitations has expired, or if the collector doesn't own the debt.
You've heard that you should never pay a debt collection agency, and now you want the truth. What happens if you never pay collections? Should you pay the debt collector or the original creditor?
Debt collection agencies can employ a variety of shifty tactics. They may start with harassing phone calls and escalate from there. But depending on your situation, you may never need to pay a debt collector. Not sure where to begin? SoloSuit can help.
Respond to debt collection lawsuits fast with SoloSuit.
Debt Collection Agencies Buy Your Debt From Lenders
Debt seems like a fact of life for many Americans. Four out of five Americans (80 percent) owe some debt. Collectively, Americans owe $ trillion to banks, credit card companies, and other lenders.
There are usually two parties in debt collection cases. First, there's the party who allegedly owes money, called the “debtor.” Then, there's the party to whom the money is allegedly owed. This party is known as the “creditor.”
Often, a lender finds they can't collect a debt from a borrower. Interest keeps piling up on the borrower's loan, and there's no money coming in to pay it. A lender now has two options:
- Collect the debt themselves. However, tracking down an alleged debtor can become more of a hassle for the lender than it's worth.
- Sell it to a debt collection agency. Lenders give up their right to collect the debt but still receive some money. This helps lenders to recoup some of their losses.
A debt collection agency is a company that buys unpaid debt from a creditor. Debt collection agencies usually buy these debts for pennies on the dollar. Then, they attempt to track down a debtor and force them to pay.
Because these companies specialize in tracking down alleged debtors, they're better suited to collecting unpaid debt than lenders themselves. They employ a small army of sleuths equipped with the world's best search tool: the internet. Against these odds, an alleged debtor is hopeless. Debt collection agents can track their prey using anything from bank records to voting data - even internet providers!
Don't hide from debt collectors. Respond in 15 minutes with SoloSuit.
Old Debts Can Cause Problems Whether You Pay or Not
At first glance, it might make sense to just pay off a debt collection agency. After all, that's the easiest way to make them leave you alone, right?
Not exactly. Sure, paying a debt collection agency may get them off your back. But that's all it'll do. Evidence of the unpaid debt will remain on your credit report for another seven years. The actual amount of the debt doesn't matter. Collections raise the same red flag on your credit report, regardless of whether the debt is for $ or $, This can affect your ability to secure loans in the future.
What's worse, intent doesn't matter in debt collection cases. Many debtors aren't trying to dodge their creditors. They just don't know they owe money. This happens all the time. A creditor may send an unpaid debt notice to a borrower's old address. The borrower never receives it and goes on with their lives, unaware of the debt following them.
This lingering debt can have some surprising effects. It'll make getting new loans more difficult. Securing financing for a car, mortgage, student loans, or home improvement is significantly more difficult with bad credit. But that's not all. Bad credit can also make it difficult to rent a home or even open an online streaming account.
On the other hand, paying an outstanding loan to a debt collection agency can hurt your credit score. Yup, you heard that right. Any action on your credit report can negatively impact your credit score - even paying back loans. If you have an outstanding loan that's a year or two old, it's better for your credit report to avoid paying it.
Protect your credit score by filing a response with SoloSuit.
How to Decide If You Should Pay a Debt Collection Agency
There's no “silver bullet” in a debt collection case. While ignoring a debt collector may be an option in some cases, it's not available to some debtors.
Here are some general considerations.
If you refuse to pay a debt collection agency, they may file a lawsuit against you. Debt collection lawsuits are no joke. You can't just ignore them in the hopes that they'll go away. If you receive a Complaint from a debt collector, you must respond within a time frame determined by your jurisdiction. For most areas in the US, that time frame is days.
If a debt collection agency wins their lawsuit, they have several options available. For example, debt collectors may garnish earnings to collect a debt. A garnishment is a court order that takes money directly from a debtor's earnings. This money goes towards repaying the debt they owe. Consider this possible outcome before ignoring a debt collector's payment demands.
Here's one more thing to keep in mind. Interest on your unpaid debt will continue to pile up as time passes. If you don't pay a debt collection company, the amount of money you allegedly owe will keep increasing.
Sometimes, paying a debt collection agency makes sense. Remember, these agencies buy debt for pennies on the dollar. As a result, you may be able to negotiate paying off your debt for a much lower amount than you owe. Debt collectors may also send you a letter stating that your debt is paid. You can use this letter to remove evidence of the debt collection from your credit report.
A piece of advice: pay the right person. If you receive a letter from a debt collector demanding money, do your research. Often, debt collection agencies sell debt to one another. Don't just assume you're paying the right debt collector. Make sure your debt hasn't changed hands.
Consider these factors and situations
Here are some more specific factors to consider
It may be a good idea to not pay a collection agency
- If you have no income or property and plan to never have income or property at any point in the future. In this case, you may be “judgment proof.” If you plan to ever own anything or have income again in the future, you are not judgment proof.
- If you don’t owe the debt. Rule #1 of life: don’t pay people money you don’t owe them. If an agency is hounding you for a debt you don’t owe, send them a Debt Validation letter to get them off your tail.
- If it is part of your strategy to settle the debt for less. A proven strategy for paying less on a debt is to send the collector a Debt Validation Letter. This may force the collector to sue you for the debt or to give up. When they sue you for the debt, respond with an Answer to a Summons and Complaint. This may force them to give up or to settle the debt for less.
- If the statute of limitations has expired. If the statute of limitations has expired then the collector can no longer legally sue you for the debt. Making a payment on the debt will likely reset the statute of limitations — which is disastrous.
- If the collection agency can’t show ownership of the debt. Frequently, the sale of a debt from a creditor to a collector is sloppy. A collection agency hounding you may not be able to show they actually own your debt. If they can’t, then you aren’t obligated to pay them.
- If you are morally opposed to paying someone other than the original creditor. As explained earlier, if a collection agency is coming after you, the original creditor may have sold your debt. Many people think it is unethical for creditors to sell debts. Also, some people argue, you don’t have an ethical obligation to pay someone other than the original creditor.
The argument goes like this. You owed $ to the original creditor. The creditor sold your debt for $ to a debt collector. If you pay $ to the debt collector, that doesn’t restore the creditor. Besides, the creditor already got their remedy for the debt in the $ from the collector. Also, you don’t owe the collector $, because they only paid $ for your debt. That said and the ethical argument aside, if a collector legitimately bought the debt from your creditor, you do have a legal obligation to pay, if the debt was legally assigned to the collector.
You may want to pay a collection agency
- If you owe the full amount of the debt and the agency owns the debt.
- If you want to resolve the matter as quickly as possible and have the money to do so.
- If you believe you have a moral responsibility to pay off debts regardless of whether they are actually owed.
For most people, it makes sense to angle for a settlement. If a collector is hounding you for a debt they are probably adding on hundreds or thousands of dollars in fees to the debt. They also probably bought the debt for only around 10 percent of the face-value of the debt. These factors suggest that if you paid the full amount they are asking for, you would be overpaying.
On the other hand, if you don’t pay off the debt at some point, they may keep hounding you forever. Even if the statute of limitations has expired and they don’t get a judgment against you, they can still keep asking you for payment or selling your debt to the next guy till the end of time — or it ends up on the spreadsheet of some street-thug collector who threatens your life.
Using the Debt Validation Letter and Answer defense is the best way to angle for a low settlement. Once you pay the settlement, you’ll have documents showing the case is dismissed with prejudice and there was a full and final settlement. At that point, the debt is resolved.
Use SoloSuit to make your Debt Validation Letter
SoloSuit can take care of all of this for you. Our Debt Validation Letter is the best way to respond to a collection letter. Many debt collectors will simply give up after receiving it. Just answer a few questions online, and we’ll create your letter for you.
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>>Read the FastCompany article: Debt Lawsuits Are Complicated: This Website Makes Them Simpler To Navigate
>>Read the NPR story on SoloSuit: A Student Solution To Give Utah Debtors A Fighting Chance
What If the Collection Agency Sues Me?
If the collection agency sues you, stick to your guns: you can win. This flowchart shows you the path to victory in a debt collection lawsuit. Pre-lawsuit, make sure to send the collector a Debt Validation Letter telling them you dispute the debt and requesting validation of the debt.
If they sue you, be sure to file an Answer in court. This will make it more likely they give up and the case gets dismissed. If not, you can angle for a settlement with a Debt Lawsuit Settlement Offer Letter.
How Does Collections Affect My Credit Score?
Having debt in collections definitely negatively impacts your credit score. Paying off the debt will likely improve your score with credit bureaus that use FICO 9 or Vantage Score or — the newest versions of credit scoring.
Debt in collections is considered under payment history — the biggest factor in the most common credit score, FICO. Payment history drives 35 percent of your score.
Some lenders have special policies that prohibit them from lending to people with unpaid debts in collection.
How to Answer a Summons for Debt Collection in your State
Here's a list of guides for most of the 50 states.
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WallStreetBets posters are buzzing about these eight Reddit stocks.
Reddit has become an unlikely hub for stock trading in Groups of online retail traders have successfully orchestrated targeted buying campaigns in some of the market's most shorted stocks, generating massive short squeezes in so-called "meme" stocks. Some of Reddit's favorite meme stocks have skyrocketed in price, but the extreme volatility and risk associated with these stocks is not for the faint of heart. Congress has even held a hearing to better understand the Reddit trading phenomenon. Here are eight Reddit stocks generating the most buzz in Reddit's WallStreetBets community in October, according to Swaggy Stocks.
Tesla Inc. (ticker: TSLA)
Electric vehicle maker Tesla and its controversial CEO Elon Musk are two of the most divisive subjects on Wall Street, so it's no surprise that Tesla has been among the top trending Reddit stocks all year. Musk's most recent controversial decision was the announcement that he is moving Tesla's headquarters from California to Austin, Texas. Tesla shares hit new all-time highs above $ earlier this year, but the stock is now trading at times forward earnings and 18 times sales. Reddit traders may agree with Tesla bulls who believe the company will eventually grow into its $ billion market cap.
Alibaba Group Holding Ltd. (BABA)
Chinese e-commerce and cloud computing giant Alibaba has been at the mercy of regulators throughout Despite reporting % revenue growth in the most recent quarter, Alibaba shares were down % year to date at market close on Oct. 8. The problems started in late when Chinese regulators halted the initial public offering of digital payment giant Ant Financial, in which Alibaba holds a 33% ownership stake. Chinese regulators have subsequently hit Alibaba with multiple antitrust fines as part of a broader tech crackdown. Reddit traders may see the sell-off as a long-term buying opportunity in one of China's largest and fastest-growing tech companies.
Tilray Inc. (TLRY)
Tilray has been one of the most volatile stocks in the cannabis space in The Canadian cannabis producer recently completed a merger with Aphria, making it the world's largest cannabis company. Tilray shares soared as high as $67 back in February, driven in large part by a cannabis stock short squeeze triggered by social media traders. However, optimism about near-term U.S. federal cannabis legalization has since faded and so has Tilray's early-year rally. Tilray's stock price is now back down below $11, but Reddit traders may see another cannabis short squeeze coming at some point.
Smiledirectclub Inc. (SDC)
Smiledirectclub has been one of the most heavily shorted stocks in the market since the company completed its initial public offering in Smiledirectclub priced its IPO at $23 per share. The stock has been a disaster for investors up to this point and now trades under $7. Ortex Analytics recently named Smiledirectclub one of its top potential short squeeze candidates for the month of October. In fact, around 50% of the stock's float, or fee-trading shares, is held in short positions. Reddit traders must agree that the company has all the ingredients for a major short squeeze at some point.
ContextLogic Inc. (WISH)
E-commerce company ContextLogic is another example of an IPO flop that Reddit traders see as a potential buying opportunity. ContextLogic went public in December at an IPO price of $ Less than a year later, the stock is barely trading above $5. In the most recent quarter, ContextLogic reported a % drop in revenue and a $ million net loss, which are discouraging trends in the high-growth e-commerce space. Monthly active users also dropped 22% in the quarter. Despite the lackluster quarter, Reddit traders must see the potential for a ContextLogic turnaround given all the recent buzz surrounding the stock.
Facebook Inc. (FB)
Social media giant Facebook has navigated a whirlwind of negative headlines in recent weeks. On Oct. 4, Facebook and subsidiary platforms Instagram and WhatsApp suffered major outages lasting more than six hours. That same week, former Facebook employee Frances Haugen testified before Congress after leaking a trove of internal Facebook documents to the Wall Street Journal and said that Facebook knew that its platforms harmed its users. Facebook shares are down more than 12% in the past month, but Reddit traders may believe the company's latest issues are merely another bump in its road of long-term growth.
Apple Inc. (AAPL)
Reddit users have a reputation for betting on unprofitable, high-risk "stonks." But Apple is one of the highest-quality blue-chip stocks in the market. The iPhone maker generated $ billion in net income and invested $ billion in dividends and buybacks in fiscal Apple rolled out the new iPhone 13 product family in September, and analysts are optimistic about another big upgrade cycle. Reddit traders don't seem to be concerned about potential supply chain disruptions in Asia or recent changes to Apple's App Store rules lowering commissions and allowing third-party apps to direct customers outside the Apple ecosystem.
Advanced Micro Devices Inc. (AMD)
Shares of chipmaker Advanced Micro Devices have skyrocketed 1,% in the past five years. AMD has exposure to some of the fastest-growing markets within the tech sector, including PC gaming, data centers and autonomous vehicles. Amid a global semiconductor shortage, AMD reported 99% revenue growth in the second quarter and guided for full-year sales growth of 60%. Like many other high-growth stocks, AMD investors are paying a steep price for their shares, which are currently trading at about times sales. However, Reddit traders seem undeterred and are betting on even more upside ahead for AMD stock.
Reddit stocks trending in October:
-- Tesla Inc. (TSLA)
-- Alibaba Group Holding Ltd. (BABA)
-- Tilray Inc. (TLRY)
-- Smiledirectclub Inc. (SDC)
-- ContextLogic Inc. (WISH)
-- Facebook Inc. (FB)
-- Apple Inc. (AAPL)
-- Advanced Micro Devices Inc. (AMD)
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Gamestop and AMC put Reddit on the investor radar, now it may be planning a stock market float in New York
Reddit has hired bankers and lawyers for the potential stock market float
Stocks like Gamestop Corp and AMC Entertainment Holdings (NYSE:AMC) brought the Reddit website onto the radar of many investors earlier this year, now the tech company is reportedly preparing plans for a US$15bn stock market IPO.
Reddit has hired investment bankers and lawyers for a float in New York, according to a Reuters report.
The IPO could potentially occur early in the first quarter, according to Reuters’ sources, though they cautioned that the size and timing of the public fundraise could be subject to market conditions.
It comes after speculation that listing plans were under consideration.
Reddit has some 52mln daily users split across more than , community groups, though only a small number of those communities were set up to discuss stocks and/or retail day trading in so-called ‘meme-stocks’ like Gamestop and AMC.
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The mail came today, and you found an unpleasant surprise in it: a collection letter.
They come for all kinds of reasons—and a lot of people get them. More than 35 percent of Americans have collections on their credit report, and more than 70 percent of the professional athletes I work with in my practice have them.
One of the biggest drivers of these collections isn’t the person who is trying to flake out on a credit card balance or avoid paying a car loan—although you’ll certainly get letters for doing either of those things.
Collection rates are skyrocketing due to medical collections—which often come from regular, hard-working people with insurance who simply didn’t know they had an outstanding bill. Let’s say you break your arm. When you go to the hospital, the x-ray, the doctor, the cast and the pain medication are all separately billed to the insurance company. If the insurance company decides not to pay one of those bills—or, more commonly, decides to pay just a portion of one—you’re on the hook for the rest.
Sometimes, that bill doesn’t show up where it’s supposed to. Maybe it goes to an old address or to a work address on file for your insurance. Or perhaps it doesn’t get mailed at all.
A collection letter that is often for some silly, small amount, like $
You’re probably thinking that isn’t a big deal, but that attitude can cause you a big problem on your credit report. Collections show up like a giant red flag—and they cause the same damage if they’re for $80 or $,
You read that right. It doesn’t matter how much the collection is for. The fact that you got a letter does damage. And the damage is painful. If you don’t have any collections on your report, the first one you get will impact your score by 70 to points. That means if you have a score in the “good” range, say , you’re going to get knocked down all the way to sub-prime territory in the s.
Some other ways consumers get dinged for collections without realizing what’s happening are through car leases and utility bills. Many times, people will turn in a leased car and then get hit with “adjustments”—where the leasing company claims the car was returned with more wear than allowed. You may or may not get a statement to that effect. If you don’t, the lease company will hit your credit report with a delinquency and send you a collection letter. Moving is another way to mess up the system. If you cancel your cable because of a move and you have a balance, that remainder will probably get sent as a last bill—to your old address. If you don’t pay it, you’ll get a collection letter.
If you’re waiting for the government to do something about it, you’ll be waiting a long time. The New York state attorney general announced to great fanfare a “landmark settlement” with the credit bureaus that was supposed to provide consumers more a more fair reporting standard for medical collections, but all it did was increase the minimum timeframe they could report them from 90 to days—and gave the bureaus three years to implement the plan.
No, you’re going to have to handle this problem yourself—and knowing how will help you heal your credit score as quickly as possible. I’ll give you some tips, and you can learn even more through this video.
The first step is to figure out who’s sending the letter and if you really owe the money.
The vast majority of collection letters come from companies who buy uncollected debts for pennies on the dollar. Instead of chasing you for that $80, the medical testing company will sell the debt to a collection agency for a few bucks, and the agency can then do whatever it can to get you to pay the full stroke. The debt collection industry is a giant, multi-billion-dollar one—and it’s more than a little shady. John Oliver did an amazing takedown of it on Last Week Tonight, showing how he was able to buy $15 million in delinquent medical debt for just $60, using a shell corporation he put together for $
No matter who owns your debt, the collection has to prove the debt belongs to you through a process of verification. They need to show they have the right name, Social Security number, and address on file for you and that you signed for the debt in question. Read the letter carefully to see if it indicates that the debt has been reported to the credit bureaus, and check your credit report to verify that. If it hasn’t, you can consider paying, as long as you get a letter in writing from the creditor that they won’t report it if you pay in full.
If the creditor reported you to the credit bureaus, your strategy has to be different. Ignoring the collection will make it hurt your score less over the years, but it will take seven years for it to fully fall off your report. Even paying it will do some damage—especially if the collection is from a year or two ago. The act of paying it makes the debt activity more recent, which further hurts your score.
At that point, your goal should be to exchange payment with the creditor for a letter stating they will remove the collection from your credit report. It will probably take some hard negotiation to get them to agree—and you can learn some tactics about how to do that in my upcoming book.
But a day or two of effort will pay big dividends. One NBA client came to me with a score of —mostly the result of two small medical collections from college. Since he was a young guy, he didn’t have much else in his credit history, so those collections really smashed his score. We got those collections negotiated and removed, and within a year his score was up to
One other trick to remember? You’re not obligated to give your Social Security number to a medical office. They can’t require it—and they’re only taking it down so it’s easier to chase you for payment later on. And if that isn’t enough of a reason to keep it to yourself, consider how safe many doctor’s offices keep their data. Medical offices are one of the most common targets for identity thieves because of the quality of information available and relative lack of security.
Don’t be a statistic.
Knowing the ins and outs of the credit industry is not only Anthony Davenport’s job; it’s his passion. His firm helps manage and protect the credit and identities of some of the highest profile entertainers, professional athletes and ultra wealthy individuals in America. All that he has learned will be compiled in YOUR SCORE: An Insider’s Secrets to Understanding, Controlling, and Protecting Your Credit Score, to be published in January by Houghton Mifflin Harcourt.
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How to know if a debt collector is a scam
You receive a call or text from an unknown number. Its from a company claiming that you owe money for something youve never heard of.
While debt collectors are indeed very real, there are scammers who pretend to be them to get money out of you. How can you tell the difference between the real ones and the would-be fraudsters? Here are six ways to recognize a debt collector scam.
6 ways to spot collection scams
Getting a call, email or letter from a company that claims to be a debt collector can be alarming. Here are six telltale signs that youre dealing with a credit collection services scam:
1. They pressure you
A credit collection scam might use scare tactics and threats. The scammer might also pull the emotional card, making you feel like a bad person. And they might try to create a sense of urgency so you move quickly and do what they want.
Legitimate debt collectors may sometimes be aggressive, but scammers often use fear to get you to act quickly and not ask any questions, says Thomas Nitzsche, a financial educator at Money Management International, a nonprofit credit counseling organization. If theyre threatening you with jail time or worse thats a violation of your rights, and a major red flag.
2. They wont give you their contact information
Real debt collectors are from reputable companies with websites and reviews, and you can contact them if necessary. Ask the caller for the debt collectors address and phone number. If they refuse, thats a telltale sign that its not a legit collection agency.
3. The debt isnt yours
If the supposed debt collector is trying to strong-arm you into paying a debt you dont recognize, you might have a scammer on your hands.
Check your credit report for accounts in your name, and to see if it shows which debt collection agencies your defaulted accounts have gone to. You can also reach out to the original lender or creditor to see if your debt has been sold off, and if so, where your debt has been sold to.
4. You didnt receive a letter in the mail
If a debt has gone to a debt collector, you should receive a formal, written notification in the mail. When you do receive such letters, hold on to them. You can refer to them should a scammer contact you.
5. Youre asked to pay by prepaid card or money transfer
Scammers almost always prefer nonreversible payment think a prepaid card, money order or money transfer, Nitzsche says. Thats because these forms of payment cant be traced, and scammers take off with your money with very slim chances of getting caught. Be on the alert if they ask for payment methods that seem out of the norm.
6. They threaten to tell your co-workers, friends and employers about your debt
By law, debt collection agencies typically arent allowed to share details about your debt with most people. Should they call your home or workplace, they can only call between 8 a.m. and 9 p.m. in your time zone and ask about your whereabouts. If you tell them not to call you at work anymore, they must stop.
4 ways to protect yourself from debt collection scams
If youre worried about becoming a victim of debt collector scams, heres how you can protect yourself, your bank account and your personal information:
1. Contact your creditor
Track the source of the debt by reaching out to your creditor to see if it has any information about the debt in question. If the company that contacted you matches what your creditor has on file, then youll know its a legit debt collector. Always ask for a validation letter or confirmation about the debt. That way, if you do receive fake debt collection letters, youll be able to check them against the legit one from the actual collection agency.
2. Check your credit report
Look at your credit reports to see if the debt the collector is referring to is actually on your report. You can order free credit reports from all three major credit bureaus Experian, Equifax and TransUnion at AnnualCreditReport.com.
Note that while most debt is reported, not all debt collectors relay information to the credit bureaus. Yes, its confusing. This means that the debt could still be yours but not show up on your credit report.
3. Dont disclose any financial information
When someone asks for both personal and financial information, dont share anything the potential scammer doesnt already know. Instead, turn the tables on them, and ask for the name of the caller, the collection company, contact information such as a phone number or email address and its physical address.
If the collector is willing to provide information, thats a good sign. Next, try to call the company or send it an email. If you get a dead line or the email bounces back, thats a red flag.
4. Stay calm and know your rights
Dealing with a debt in collections can be stressful and embarrassing, but dont be hasty, Nitzsche says.
A legitimate debt collector should be able to provide you with documentation that shows where the debt came from, when they acquired it and how they arrived at your current balance, he says. Always ask for this verification as soon as collection attempts begin.
Under the Fair Debt Collection Practices Act, a legit collector needs to identify themselves and cant try to contact you at any unusual time or place.
They also cant communicate with anyone about your debt except for your attorney, the attorney for your creditor or the collection agency and, in some cases, a consumer reporting agency.
Its also helpful to know your states statute of limitations on debt, Nitzsche says. This can be anywhere from three to 10 years.
If the debt they claim you owe legitimate or not is beyond the statute of limitations, the collector can attempt to collect but cannot sue you, he says.
How to report fake debt collectors
If you think youve been scammed or theres been an attempt to scam you, there are ways you can fight back.
1. Keep a paper trail
Nitzsche recommends keeping records of all communication with the collectors. Jot down every phone call, save emails and texts and gather letters and any other correspondence you receive from the company. The more information at your disposal, the stronger your complaint will be if you file a report.
2. Reach out to your states attorney general
Your attorney generals office is on the alert for scammers and aims to put a halt to fraud such as debt collector scams.
3. Submit a complaint
You can report a fake debt collection agency to the Federal Trade Commission (FTC) and the Consumer Financial Protection Bureau (CFPB).
With major debt collection rule changes slated for November 30, , one of the biggest changes is that debt collectors will be allowed to contact you through email, text message and social media direct messages, Nitzsche says.
Theres a really good chance that scams will increase with all of these new methods of communication, so be vigilant and remember your rights, he says.
Featured image by Drazen Zigic of Shutterstock.