Hello, all! This is the first part of several that I will be putting together in the coming weeks. My goal is to take you through the basic steps as I follow them so that you can be better prepared to take on debt collectors. But this information is here to help you when you come across a debt collector that cannot prove their claims.
So, you've been contacted by a debt collector.....they are demanding that you pay them for some outstanding balance or other. What do you do? Where do you start? I decided to write up some basic information to help you. This information is, again, BASIC. It does not take into account the various differences in the laws of different states, etc etc. This should be used as a starting point. Please feel free to message me on this forum if you have more specific questions or concerns.
IF YOU RECEIVED A LETTER....you need to know what that letter is required to include. Federal law requires that within 5 days of their initial communication to you, that they provide you with written notice of your rights. This includes the right to dispute the debt, or any part of the debt. It includes your right to ask them to provide contact information for the original creditor. We will discuss disputing in more detail in a bit.
BEFORE YOU CONTACT THE DEBT COLLECTOR.....you need to know what to say....and what not to say.
1--as a rule, even if I recognize the debt, I NEVER admit to the debt when I speak with them for the first time. EVER. The debt collector needs to prove to me that they have the legal right to collect on any debt, and so the goal here is to make them prove their claim. There have been lots of cases where a fraudulent debt collector scammed someone out of money like this.
2--DO NOT get into an argument with them. It only will frustrate you more. If the person on the phone acts like a fool, let them, but don't join them there. This is a lot easier said than done.
3--Ask for their mailing address, company name, etc etc. You will need their address to send a dispute letter.
4--DO NOT tell them over the phone, "I dispute this debt". you're wasting your breath. Disputes need to be done in writing--again, more on that in a bit.
When I am on the phone with a debt collector for the first time, I have two objectives. First, I want to know who they are, what they claim I owe, who they claim I owe it to, etc etc. Second, I want to know their mailing address so that I can send them any correspondence as needed. Then I thank them for their time, tell them that I will wait for the dunning letter that the law requires them to send, and end the call. Thats it.
DISPUTING.....there is a federal law called the FDCPA. This law requires that you dispute IN WRITING. There are two ways that I recommend doing this. The first is to send them a certified letter, return receipt requested. That way, you can prove that you sent it--and that they received it. The second way is by fax, and I only recommend that under one condition, which I will elaborate on in a moment. Now, this dispute letter, also known as a DV letter or validation request....there are a ton of templates floating around the internet. My advice? Don't use ANY of those. The collection agencies will likely just throw that in the garbage because they have seen it too many times--it shows that the sender does not understand the law. All you need to say is something simple, like this:
Debt collector name
Debt collector address
RE:the debt they told you about, include any account numbers they gave you here
To Whom it May Concern:
I have been contacted by you with regard to the above identified account. This letter shall serve as notice that I hereby dispute your claim of indebtedness in the amount shown. I request proper validation in accordance with applicable federal and/or state law. Please provide validation to me at the address below. Thank you for your assistance.
Thats it. Don't send them a three page long list of demanded documents--most of what is in those templates is stuff that they are not required to produce at this stage of the game, and they know it. As a general rule, I ALWAYS dispute and ask for validation unless I know the debt is mine--if the original creditor notifies you that they are turning the debt over to ABC collection agency, and ABC calls you, you have good info at that point that the call is legitimate. A validation letter is NOT just a stall tactic....it is a legitimate way to force the debt collector to prove their claim to you.
Ok, remember when I mentioned sending this in a fax a minute ago? Here's the one condition--you need to be in a state that allows you to record the phone call without telling all parties. These are known as "one-party" states. The law in those states says that one party to the call must give consent--that one party is you since you will be making the call yourself. I use this method because I can provide proof that the dispute letter was sent and received. I use a standard microcassette recorder and have a fax machine at home. What I do is, I fax the letter, then I call the debt collector. I record the call. I identify myself....I identify the debt they are trying to collect....I then say that I have just faxed over a validation request/letter of dispute, and say that I just wanted to verify that they received this letter. This will not work with all debt collectors, I'm sure, but I have not had any problems with this method yet. If it doesnt work, then you can always revert to sending the certified letter.
This brings me to the next item--
RECORDING THE CALL......as I said, in most states, you can do this without having to tell them about it. Here is a link that will show you what the law is in your state regarding this:
I like that link because it points to the actual statutes in each state's laws, so you can do the research yourself to make sure you are acting within the law.
DO NOT RECORD A CALL if you live in an "all-party" state without getting consent from all parties. Of the 50 states, 49 of them have criminal penalties if you do this.
OK.....so, you've been contacted....you learned what they were trying to collect...and you requested validation in writing. Now what? The next step is to check your credit reports. Check all three. You are looking for any reference to this debt on your reports....original creditor, any other debt collectors, any reference at all. You won't always find one, but if you do, you need to know what to do about it. Because so many things in credit reporting relate to your specific situation, I will simply ask that anyone here with questions can send me a PM about their specifics. There are all kinds of ways that a creditor can violate the FCRA, which is the federal law that governs credit reporting. Here's one that I recently found....
A creditor used to report on my credit reports an account that was not mine. It was originated in a state outside of where I live. I disputed this debt five years ago, and finally got it removed from my reports. However, a new company came along and reported it back onto my reports within the last year. They report that the account is roughly $12,000 past due. They even admit in their credit reporting that the account became delinquent in 2004. For those of you that are not aware, the FCRA states that a consumer debt can only be reported for 7.5 years from the date it first becomes past due. So, as of now, this report is 9 years old and should be removed immediately. But it gets worse---the debt collector is also reporting that it will be removed in May of 2020. Every month, they add another month onto that time, so that next month, it would read June 2020. I pulled my reports and found that they are doing this, on all three of my reports, since January of this year. I filed my dispute with the credit bureaus....the debt collector confirmed on all three that they are reporting correctly.
here's the fun part....I am now speaking with my attorney and we plan to file against these folks in federal district court. The FCRA allows for a statutory penalty of up to $1000 per violation--and they are making the same errors on all three of my reports each month. As of right now, they have made two errors on each report, every single month, from January to now. That is 8 months of reporting....two violations per report....three reports.....statutory violations alone amount to $48,000 as of now. Not bad for a $12000 debt that I do not actually even owe....
OK, so you get the idea for now. Feel free to drop me a PM with any questions you have. The next installment will discuss more details about what you can expect from some debt collectors--some of these things can get frustrating, just plain ridiculous, and downright illegal. Your best weapon is to be prepared by knowing what they can and cannot get away with. Until next time!!
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