Getting a call from a debt collector is always worrying. But it’s even more unsettling when the collector is calling about a bill you don’t remember owing.
Is it a loan that you forgot exists? Did the collector mix you up with someone else? Is it a scam? Here’s how to clear up the confusion.
1. Ask for more information. A legit debt collector will be able to provide you with information about who they are, the company they represent and the debt they’re collecting.
If you can’t get clarity over the phone, you have a right to hold off on discussing the debt until the collector sends a written notice, within five days, which verifies who and how much you owe.
“They can’t continue collecting unless they provide original information for you,” says Cara O’Neill, bankruptcy, credit and debt editor for Nolo, a publisher of do-it-yourself legal books and other legal information.
Need more info? Ask the caller for his name, company, address, phone number and professional license number, recommends the Consumer Financial Protection Bureau, or CFPB.
2. Watch out for red flags. The Federal Trade Commission has tracked shady debt-collection posers doing everything from targeting Spanish speakers with bogus bills to collecting on phony payday loans.
Avoid becoming the next victim of a debt-collection scam by keeping an eye out for fishy behavior from a debt collector.
If the caller refuses to comply with your requests for more information, keeps calling when you ask them to stop and doesn’t provide required written notices, you may be dealing with a scammer, says Margot Saunders, attorney for the National Consumer Law Center.
According to the CFPB, suspicious behavior includes threatening to arrest you, refusing to provide information about the debt and requesting your personal financial information.
3. Keep your lips sealed. “If they’re calling you, they should know who you are,” says O’Neill. When a collector doesn’t know your name and can’t provide other basic information about you, take it as a warning sign.
Stay mum on your credit card info, bank account numbers, Social Security number and other sensitive personal data. Scammers can use this to apply for credit or write checks in your name.
Within 30 days of initially being contacted about the debt, send a letter requesting information and documentation about the debt, the original creditor and proof that this company is permitted to collect on the debt. The CFPB offers a sample letter that you can modify to meet your situation.
The collector should respond with the requested information. “If the debtor doesn’t receive that, it’s one indication that debt collector doesn’t really have the authority to collect the debt,” Saunders says.
And keep in mind that the consumer doesn’t have to prove that she doesn’t owe a debt, Saunders says. It’s on the debt collector to prove that she does. “That’s a critical difference,” Saunders says.
Word to the wise: Keep records of any snail mail correspondence, including copies of any letters you send, and send notes through a tracked mailing service to confirm receipt.
Be wary about this before beginning to repay a debt. In some states, initiating repayment will restart the statute of limitations, the CFPB says.
“If it’s an old debt, a consumer should be very cautious about sending in money or even admitting the debt is hers,” Saunders says.
6. Complain. If the company refuses to provide documentation, threatens to arrest you or violates other rules, you can file a complaint with the CFPB, the FTC or the state attorney general, experts say.
The complaint form from the CFPB, available here, requests information about the type of debt, your complaints and desired resolution.
“It puts a little bit of teeth behind the dispute-resolution process,” O’Neill says.
If the collection process is getting out of hand, think about bringing on an attorney.
Source: US News
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