In our continued goal to educate and improve the collection industry, we are highlighting the consequences of cease-and-desist letters have on debtors. The following information comes from a recent article found on insideARM, submitted by Phillips and Cohen Associates. While C&D orders are the right of a consumer, many of them do not fully grasp the breadth of their actions and are focused solely on stopping communications from collectors. The fallout can commonly manifest itself in a few ways that do more harm to the consumer than help. Here are some examples:

1. With the lines of communications cut, creditors can still enlist legal action to try and collect upon the consumer’s debts. The relief that a consumer had thought they would gain from the cease-and-desist letter is short-lived; a lawsuit can create a whole new set of problems for the consumer.

2. In cases where a lawsuit might not make sense, collectors can still report the account to the credit bureaus as an unpaid account. The unpaid bill will appear on the debtor’s credit records; it is one of the worst possible marks to have on these reports. Such debt will appear for seven years after being reported.

3. The Cease-and-Desist letter is only applicable to the agency that receives the message. If the creditor places the account with another agency or sells the account to a debt buyer, the phone calls that the debtor was so eager to avoid can start all over again.

Although C&Ds are meant to help consumers, none of these scenarios favor them in the long run. When the communications stop, the headache begins. What consumers should take away from the list is that no matter what radio or television commercials might tell them about debt communications, just because the calls stop doesn’t mean the debt goes away with them. Collectors are still their best ally in fully resolving debt issues.