When you stop making full payments on your bills, a creditor may turn your account over to a collection agency, a business that specializes in collecting unpaid bills. It is legal for a creditor to turn your bill over to a collection agency even if you've offered to make small payments on your bill and even if you've told the creditor that you would make full payments as soon as you could.

Collection agencies can send you letters and call you at home and ask you to pay the bill. But they must stop contacting you if you send a letter that either asks them to stop, or tells them that you will not pay the debt. If you send this type of letter, the collection agency can contact you only one more time, and only to tell you either that they will stop contacting you or that they may take some kinds of legal actions. Always keep a copy of the letter that you send, and make a note as to the date, time, and location from which you send it.

Collection agencies can collect interest and late charges on the debt that is owed if there is a written agreement (contract) that allows this. If there is no contract, they can collect interest of up to 9 percent each year on the amount of the unpaid bill. They cannot charge you for their own collection costs, such as long distance phone bills.

There are several things that collection agencies must do when trying to collect a bill. There are also federal and state laws that say that there are certain things collection agencies cannot do to collect a bill. See the charts below.

What you can do if a collection agency is harassing you?

Write a letter to the collection agency and tell them to stop contacting you. Always keep a copy of the letter, and make a note as to the date, time, and location from which you sent it. If possible, it is a good idea to send your letter by certified mail. If the collection agency continues to call and write you or does other things they legally cannot do, keep a record of what happened, who you spoke with and what was said. Try to have someone listen in on phone conversations you have with the agency so you have a witness. Keep any collection notices you receive in the envelopes in which they were mailed. Do not write on them.

You can sue the collector if they do anything illegal when trying to collect a bill. If you win your case, the collection agency will have to pay you money damages plus your lawyer's fees. Contact a lawyer if you think the creditor did anything unlawful when trying to collect the debt.

Original creditors are subject to Oregon law that, on a more limited basis, prohibits certain types of abusive conduct by creditors. Contact a lawyer for more information.

• Identify themselves and say why they are calling within the first 30 seconds of the call.
  
• Stop letters and phone calls if you send a letter that demands they stop contacting you or that says you will not pay the bill. (Send by certified mail and keep a copy.)
  
• Within five days after they first contact you, send you written notice that says how much money you owe, to whom it is owed, and what rights you have if you don't think you owe on the bill.
  
• Register with the state.
  
• Contact your lawyer, not you, if you told the agency you have a lawyer.
  
• Stop collection attempts until they give you a written verification of your debt if you dispute the debt in writing within 30 days of receiving the first notice.

What Collection Agencies
Legally CANNOT Do

• Threaten you with arrest for nonpayment. It is not a crime to have unpaid bills.
  
• Threaten to use force or violence against you or your family.
  
• Talk or even threaten to talk to your employer about your debts.
  
• Tell other people about your debt.
  
• Use vulgar language when talking to you or your family.
  
• See or call you at work (unless unable to contact you at home or reach you by mail or some other way).
  
• Try to collect money when they know or should know that the person they are contacting does not owe them money.
  
• Send notices that look like court papers or other official papers but really are not.
  
• Send collection notices by postcard or have "collection" appear on the envelope.
  
• Call you at a time they know is inconvenient for you.  Usually, this means they can't call you before 8:00 a.m. or after 9:00 p.m. 
  

• Call you at a place they know is inconvenient for you. For example, when you're at work.

• Threaten to take your property to pay off a debt without telling you a court hearing is first required (when a hearing is required).

• Fail to do any of the things listed on the chart titled "What Collection Agencies MUST Do."