Junk debt buyers are increasingly hounding consumers, trying to convince them that they need to pay debts that they never incurred. Typically, junk debt buyers purchase old debt that’s been written off by the original creditor; often, they purchase debt that’s already been repurchased by another buyer. They might purchase $1 million worth of debt for $50,000 or less. What they receive for their money is usually a database that contains consumer names, amounts allegedly owed, and perhaps an old address or phone number.
Debt buyers then put technology to work for them, using data mining techniques to get a bead on the consumer. All too often, though, the results are anything but reliable. They might have a record on John Rowe from Greensville, but go after Jack Rowe from Greenstown.
In other words, debt collectors call the wrong people, tell them that they owe money, and try and coerce them into a “deal” whereby the amount will be reduced if they pay immediately. It’s easy to see why this method is effective. If a debt buyer cons just a few dozen people into paying up, he’s made a profit.
In the process, a debt collector may try to extract additional information from the consumer, such as his or her Social Security number, place of employment, or other data that will support the debt collection agency’s efforts to track the consumer down. It’s within your rights – and in your best interest – to refuse to supply a debt collector with additional information. He’s basically on a fishing expedition.
It’s also important to demand a validation of the debt. Because debt buyers often have scant information about the original debt, they’re often unable to validate the debt. Once you ask for debt validation, they’re not allowed to contact you until they provide it in writing. If they do provide validation, carefully go through your records and credit reports to see if you might have incurred the debt. If the debt is not yours, dispute the debt. If the debt is yours, see if it’s beyond your state’s statute of limitations. If so, the debt is uncollectible.
When you want the debt to be validation or when you want to dispute a debt, it’s important to do so in writing. Send the letter via certified mail, with a return receipt requested. In the meantime, keep a log of all the communication you receive from the debt collection agency. Note the days and times you receive calls, who called, and what was said. Similarly, keep all written communication (including the outer envelopes) and note the dates you received the letters.
When debt buyers go after the wrong consumer, it’s known as zombie debt collection. If you’re the victim of zombie debt collection tactics, know that you’re protected under the Fair Debt Collection Practices Act. The FDCPA doesn’t only apply to those who owe money; it applies to everyone.