Dave Says: Protect Yourself From Creditors

Dear Dave,

I’ve heard you say to never give collectors access to your checking account. Does that include payments with a debit card too?

Susan

Dear Susan,

Absolutely! If you’re doing something like scheduling utility payments to come through your debit card or out of your personal checking account, that’s perfectly fine. But collectors are looking to get as much as they can on a bad, late debt. Never, under any circumstances, give them electronic access to your account.

I’ve been doing financial counseling for a long time now, and I’ve seen numerous situations where collectors have taken more than the agreed-upon amount from someone’s account once they gained access. This sleazy move left people without the money to pay their rent, the electric bill or even groceries. In fairness, the collection business does have a few good people in it, but it also has a high percentage of people who are scum—especially on the credit card side of collections. Some of them will lie and even make threats. It’s a huge problem.

There are other, much safer ways to handle these kinds of situations. Send a money order overnight or wire the cash to them. You can also send a cashier’s check. Some folks have even used a pre-paid debit card that isn’t attached to any of your accounts. This isn’t my favorite way to handle things, but it’s better than giving them the opportunity to clean you out and mess you over!

—Dave