Debt Collectors Illegally Trying to Collect on Fake Debts

November 30, 2012 (Press-News.org) Some credit card companies have recently been accused of sending incorrect bills to consumers. The bills may be larger than what consumers actually owe. In some cases, consumers have actually received bills when they did not owe anything at all. The problem seems widespread, with consumers receiving incorrect bills from American Express, Citigroup and others.

Attempts to collect fake debt violate the Fair Debt Collection Practices Act.

Experts think this illegal collection process is occurring because banks sell bad loans to collection companies. These collection companies are required to obtain the documentation from the original loan. However, they do not always follow this rule. To make things worse, a loan may be sold several times, becoming more and more separated from the original source of the loan and the original paperwork. As result of this practice and the resulting poor record keeping, consumers are finding themselves hounded for debt they did not incur.

First steps

If you believe you are being asked to pay debt that you do not owe, your first step should be to gather information. Get the name and contact information of the debt collector. It is important to determine if the collector is calling from a collection company or the actual bank. You'll want contact information for anyone you speak with as well as the company itself. It may also be helpful to make notes of your conversations with the debt collector.

Fair Debt Collection Practices Act

The FDCPA gives collection agencies guidelines and provides protections for debtors. The FDCPA covers debts from auto loans, medical bills, retail financing, some mortgages and credit cards. However, it only applies to collection agencies outside the actual businesses that issued the loan or credit card.

Under the FDCPA, debt collectors must provide written proof for debt when the consumer requests it. So, if a debt collector is asking you for debt that you do not believe you owe, you should request written verification of the debt. Then, carefully examine this document. Be on the lookout for any fabricated information. For credit card debt, you can check to see if the debt is from a place you usually shop. You should check that all your personal information is correct. One of the common ways people are blamed for the debts of others is because of a mix up in the names or the Social Security numbers.

Take action

If the collectors are not able to realize the mistake, even after you present them with your evidence, you may contact the Consumer Financial Protection Bureau or your local attorney general's office. If they receive enough complaints about the collections company, they may take action.

However, you may still need individual assistance in dealing with fake debt collectors. In such a case, you may decide to get an attorney. An attorney can help fight for your rights, so that you only have to worry about making payments you actually owe.

Article provided by David F. Cannon
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