MoneyStuffed

Recently, we’ve been getting voicemail messages at our house asking for people who obviously aren’t us.  The name of the intended recipient doesn’t in any way resemble our names or the names of anyone that has ever owned our home in the past.  We have caller ID and when we research the phone number on Google, it usually traces back to some collection agency. 

This all makes me a little nervous, especially when I see articles like this Liz Pulliam Weston one about debt collectors aggressively and purposefully targeting the wrong people because, hey, anyone they can bully into paying a bad debt is a coup for them, right?

It’s simply amazing, but people who don’t owe these debts pay up.  Why?  To clear up their credit, to get the collection agencies to stop harassing them and their families and, the most terrible excuse yet, because their finances are so disorganized, people don’t even know if they owe these debts or not.  Examples from Ms. Weston’s article include:

• The FTC charged that as much as 80% of the money collected by Capital Acquisitions and Management (CAMCO), a large debt-collection firm, came “from consumers who never owed the original debt in the first place.” CAMCO agreed to a $300,000 civil penalty in March 2004, but in the ensuing eight months the problems continued. The FTC received more than 2,000 additional consumer complaints about the company — three times more than the agency received in the two years prior to the settlement. The FTC eventually succeeded in shutting CAMCO down.
• In July 2005, the FTC won a record $10.2 million court judgment against National Check Control after accusing the debt collector of illegally threatening consumers with arrest and wage garnishment. Again, many of the consumers targeted by National Check Control didn’t owe the original debt, the FTC said.
• Allied Interstate was sued by the Minnesota attorney general for repeatedly calling innocent consumers despite requests to stop.

It may seem like an impossible feat, but you do have options.  The FTC lists out the Fair Debt Collections Act and what you can and should expect during a debt collection process.  There are specific rules that must be followed and rights that you have in disputing a debt.  As long as everyone plays by the rules, you should be fine and you should be able to clear your name.

Reviewing the FDCA will help you identify debt collectors who violate the law and don’t play by these rules. 

These are some commonly reported unlawful activities reported to the FTC.  This list is from Fair-Debt-Collection.com and lists the subsection of the FDCA that’s applicable.

The tactics listed here are not an inclusive but they are the tactics reported to the FTC.

1. False, deceptive, or misleading representation - 807
2. Implying affiliation with the United States Government - 807(1)
3. False representing the legal status of your debt - 807(2)
4. Implying that individual is an attorney - 807(3)
5. Implying or threatening nonpayment will result in your arrest - 807(4)
6. Threat to take legal action not intended to be taken - 807(5)
7. Falsely implying the loss of any claim or defense - 807(6)
8. Falsely implying you committed a crime by not paying a debt - 807(7)
9. Communicating false credit information - 807(8)
10. Use of false documents that imply a state or federal source - 807(9)
11. Falsely obtaining information about you - 807(10)
12. Collectors must clearly explain how information will be used - 807(11)
13. Implying your account(s) have been turned over to purchasers 807(12)
14. Implying documents are a legal process when they are not - 807(13)
15. Prohibits collectors from using false names - 807(14)
16. Implying documents do not require action when they do - 807(15)
17. Implying debt collector is employed by a CRA - 807(16)
18. Non-profit debt consolidation help

For those collectors violating the FDCA, your options are to report the unlawful collection practices to:

• The Federal Trade Commission
• State Attorney General or State Office of Consumer Protection
• Debt Collectors Association

It’s bad enough having a debt collector after you for a debt that is legitimately yours.  If the debt is not yours, it really is in your best interest to fight these people and clear your name so that you are not perpetuating the unlawful collection practice of bullying to extort money from people who never owed it in the first place.

Related Posts:

• Collection Agencies Earn Their Reputation
• Calling in Debts
• (Not So) New Threats to Your Credit
• Capital One’s Over The Limit Policy Choices
• Piggybacking on Good Credit Going Away?

This entry was posted on Wednesday, August 9th, 2006 at 1:00 am by Liz and is filed under Credit, Personal Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.