In high school I worked in the Credit Department of a major corporation and knew first-hand what debt collectors do. This company did not hire outside debt collectors, as they hired their own to work in-house. Perhaps witnessing their tactics made me determined never to get into debt and pay all my bills on time.
The Federal Trade Commission publishes infomation on debt collectors including all you need to know when dealing with them.
However, there are common mistakes people make when dealing with debt collectors which I found in an interesting article the other day by Denise Richardson. Here's the list of mistakes:
Talking to creditors over the telephone
If you only conduct business over the telephone you could be in trouble later on. In court, it would be a case of "he said, she said" and the judge wouldn't have much to go on. You should avoid talking to creditors over the phone.
Accepting a computer printout as debt validation
Make sure they have your signature. You should insist that the debt collector provides you with a copy of the contract you signed. In most cases, they cannot, and a computer printout most likely will not hold up in court. If the collection agency cannot provide you with proof, then it is required by law to remove that entry from your credit report.
Providing personal information
You already know not to give out too much personal information to anyone as that might lead to identity theft.
Making a payment on old debt
If the debt is so old, typically 6 years in most states, it is past the statute of limitations, you are safe from a lawsuit; however, I won't talk to you about morals.
Not getting agreements in writing
It really cannot be stressed enough about having everything in writing so you'll have proof in court.
I'd love to hear from you in the comments below if you've ever made mistakes in dealing with a debt collector.