Need Help With Debt?
If you've found yourself struggling with debt, debt collectors or debt collection agencies, Kiwis For Good are here to help. We have put together this simple easy-to-use guide to help you take back control.
With rising interest rates and the overall cost of living, many Kiwis are finding themselves struggling to pay the basic costs needed to get by, and the threatening letters and phone calls from debt collectors and debt buyers can wreak havoc on our mental health. This is why we feel sharing this information with you is so important.
I've just received a letter saying I owe money. What do I do?
Sometimes, we may receive phone calls, emails or knocks at the door from people claiming they are owed some money. Often, these are people we have never met, nor done any business with.
It can be very confusing and most of us engage with these people without any question. Unfortunately, this stress impacts our mental health we simply give in and many people end up paying money they do not legally owe.
The first thing you should do if you are contacted by a debt collector is ask for clarification or, in other words, proof that you owe them money.
The best way to do this is to simply ask politely.
Two types of people will contact you regarding the collection of debt: Debt Collectors and Debt Buyers
Debt Collectors
A Debt Collector is somebody who has been asked to collect a debt on behalf of a person or company. They often contact you by phone, email, text or by visiting you at your home or place of work. Debt collection companies make money by collecting on behalf of someone else. They are what is called a third party interloper and because they are a third party you are not legally required to engage with them whatsoever. Despite what they may say, because you have no contract with them. It is always best to ask who they are collecting on behalf of and make contact with that entity directly.
If you are contacted by a debt collector for a debt you don't think you owe simply respond using the letter template below:
Note: It is not always easy to tell if you are being contacted by a Debt Collector or a Debt Buyer. You should always ask them to confirm whether they are acting as a debt collection agent (Debt Collector) or the 'assignor' (Debt Buyer).
Debt Buyers
Simply put, a debt buyer is a person or company that has purchased a debt and attempts to collect on that debt.
They will contact you by phone, email text or visit your home or workplace just like a Debt Collector. Debt Buyers make money by purchasing bad debts from companies and paying between 1% and 12% of their original value. They will then contact you and attempt to recover the full amount.
You must always ask for clarification from a debt buyer
You can do this by using the 3 letter process our legal team have put together. A debt buyer will rarely have the correct paperwork to prove their claim. This is because they are buying old debts that have already been written off. This is why they can purchase them so cheaply, yes it is very dodgy indeed.
Be careful because they can be very persistent as want to be paid for the debts they have already purchased! So they will use many methods to trick you into paying them even if they don't have a valid claim.
This dodgy practice is not just happening in NZ but worldwide.
Visiting Assisting Professor Peter A Holland of Maryland University in the United States has written extensively on the subject. - You can read more on “Junk Debt Buying” here: https://digitalcommons.law.umaryland.edu/cgi/viewcontent.cgi?article=2206&context=fac_pubs
Do not fall prey to their tricks
You do not need to speak to them over the phone or in person. All communication with a debt buyer should be recorded and in writing. The 3 letters should be sent by recorded delivery which costs a little extra but it gives you the proof you have sent the letter. You must keep copies of the letters in a safe place.
The letters should be sent 14 days apart to give the other party a reasonable time to respond. Fill in the template letters below with the necessary details, and be sure you have filled it out correctly before sending it.
If you want more info or support, Join our Facebook Group Here.
You can also call us on 0508 FOR KIWIS or drop us an email to hello@kiwisforgood.co.nz
