Many elderly Americans scammed with Hundreds of thousands of Americans have received phone calls from people purporting to be either debt collectors or police pursuing delinquent debt. The callers contact people at work and at home. Many calls come in the middle of the night. The victims are threatened with harassment or imprisonment. The scammers have collected at least $5 million from people who did not owe them money.

These scams are persuasive because the callers usually have a great deal of personal information about the victims. They often know when a loan was made, the loan amount and other details. Because of the amount of information they have and in an effort to avoid trouble, many people pay up.

Phantom debt is debt that is old, defaulted, paid or otherwise not owed by the debtor. While phantom debt can sometimes appear on credit reports as an error, the current case involves individuals deliberately trying to collect money that is no longer owed.

The Federal Trade Commission has frozen the bank accounts of Kirit Patel, a front man who set up the California company behind the scam. The FTC and the state of Illinois are suing six companies and three people who have used a number of business names in the scam, including Stark Recovery, Stark Law and Capital Harris Miller and Associates. While the calls originate in India, the scam is supported by the participation of people in the U.S. American corporations are set up to collect the information that is used when calling the alleged debtors.

This is not the first case of widespread phantom debt fraud. In November 2015, the FTC reported on a company called Delaware Solutions or Clear Credit Solutions that allegedly purchased payday loan debts. The debts were not valid, but, the company proceeded to call and harass people to intimidate them into paying.

What should you do if you are contacted about phantom debt?

There are a number of laws that protect people from unfair pursuit of debts. Knowing your legal rights can help protect you against scammers. If someone contacts you about a debt that you do not think you owe:

  • Ask for a validation notice. This is a document that confirms, in writing, how much you owe and what the debt is for. By law, it must be sent to you within five days of contacting you.
  • Remember that it is illegal for a debt collector to threaten or harass you.
  • Know that a debt collector cannot put you in jail.
  • Know that you can tell a debt collector must, if you ask, only contact you in writing.
  • If a debt collector does not validate a debt or threatens or harasses you, report them to the FTC and your state’s Attorney General’s office.

Knowledge of your rights can help protect you and preserve your good credit. Do you need help improving your credit score and erasing phantom debt? Contact Key Credit Repair today.

FDCPA - Fair Debt Collections Practices Act

Fair Debt Collection Practices Act (FDCPA) – Fighting Bad Debts?

The Fair Debt Collection Practices Act (FDCPA) has protected debtors from their creditors since 1977. It establishes certain rights that you have to protect against aggressive debt collection practices. The FDCPA is quite complex, but understanding it is extremely important for those that want to fight their bad debts.

What is covered under the FDCPA?

  • Debt collectors cannot contact you before 8 a.m. or after 9 p.m., and they must stop contacting you by phone if you ask them to.
  • Debt collectors are not allowed to call you at work if they are told not to, and they cannot contact you if you have told them you have legal representation.
  • Debt collectors cannot call you within 30 days after you’ve requested written proof of the debt.
  • Debt collectors cannot speak with third parties regarding your debt or put false information on your credit report.

There are other rights that consumers have under the FDCPA as well; these are simply the major ones.

What should you do when you’re confronted by a debt collector?

When you’re confronted by a debt collector, you can ask them to send written proof of your debt. You should also direct them not to call you any longer, and to send all future correspondence by mail. If they do contact you after this, you may file a lawsuit against them and take legal action. The FDCPA is enforced in the federal court, and companies that violate FDCPA may be subject to significant fines and penalties. Document any instances of FDCPA violations.

Once you have told the debt collection agency to stop calling you, you will want to contact a credit repair company and check your credit report. You will want to ensure that your credit score is not reflecting anything that is not correct, such as an incorrect payment history, as this would also be in violation of the Fair Debt Collection Practices Act. The credit repair company will be able to direct you as to your next move and begin working with you to repair your credit.

Finding out more about your debt.

Once you have stopped debt collectors from contacting you, you will need to review your debts. Another part of the FDCPA is that the debt collection agency cannot charge you unreasonable amounts over your initial debt. You should study your debt carefully to ensure that it is actually owed. If it is not, your credit repair agency can help you dispute the debt. Remember that some credit collectors have actually purchased your debt from someone else. If this is the case, your credit agency may be able to help you negotiate down from the actual cost of the debt. It’s very important to work closely with a credit agency at this time, as they are the experts in dealing with debt collectors and are well-versed with regard to the FDCPA.

Your credit agency has a variety of tools that it can use to help you fight your debt once you have already dealt with your debt collectors through the FDCPA. Your credit agency may be able to help you in settling your debt for a lower amount than what is owed, and it may be able to get unfair fines, penalties or interest removed entirely. Each person’s debt situation is different, and so it will depend on a case-by-case basis. If the debt is entirely incorrect, the credit agency will work with you to help you prove that the debt either was never taken out by you or that the debt has already been paid by you. A credit agency will do everything it can to ensure that you are not unfairly taken advantage of by a debt collection company.

Can you sue your debt collector?

If your debt collector has violated any element of the FDCPA, you may want to seek counsel as soon as possible. As mentioned, it’s important to document any contact with the debt collector that you have, including the initial communications during which you requested that they stop calling you. When you sue a debt collector, you can sue for damages. Often, the reward may be upward of $1,000, and you can also pursue the cost of your legal fees. However, keep in mind that suing the debt collector will not dissolve your debt; you will still need to work with your credit repair agency.

You may also be wondering if your debt collector can sue you; this is highly dependent on the state that you are in. According to the FDCPA, once a debt is 10 years old, a lawsuit cannot be raised, but this time period is much shorter in many states. If you feel that you may be the target of a lawsuit, you will want to contact a legal professional immediately. There are ways that you can defend yourself against a debt collection suit.

Your credit score is incredibly important, and every action possible should be taken to ensure that it is not adversely affected by the debt collection process or that it is rebuilt as soon as possible. Credit repair agencies not only specialize in helping you build your FICO score back up, but they also work with you to protect you against debt collection agencies and bad debt collection practices. It’s important that you know your rights and that you defend your rights.

FDCPA – Before Settling Your Debt

Great article discussing FDCPA and what to do before settling your debt from one of our affiliates, Golden Financial. Golden financial has been our affiliate for more than 5 years and assists many of our clients in the settling of their collection debt. They are located in San Diego California and can service the entire United States.This article discuses how FDCPA can help you settle your own debts. You can also download the article as a pdf document to read later.

Collection Agencies And also Your RightsThe federal Exhibition Debt Collections Practices Act (15 USC 1692) applies to businesses which accumulate debts for other companies. They do not put on a firm which is collecting its own past-due accounts.When a collection agency calls youThe initial time a collection agency calls you; it must offer its name and address, and the name of the initial lender (business or person you owe cash to). It has to additionally tell you in writing the amount of the debt and also any kind of charges which have actually been included, such as, passion or collection costs. You should additionally be informed of your right to question the information.Under the FDCPA a collection agency could not create or call to you more than three times a week. Just one of those calls could be at the office. You could not be called between 9 pm and also 8 am.A collection agency could not bug, daunt, intimidate, or embarrass you. It can not threaten brutality, prosecution, or use offending language.If you send a created declaration requesting a collection agency to stop, it could not continue to compose or call to you to request repayment.When speaking to other peopleIf you have an attorney, the legislation bans a collection firm from contacting anybody various other compared to your attorney. The collection agency can contact one more individual only when.Alerting a credit agency

A collection agency can get in touch with a credit-reporting agency regarding the financial obligation, but if you have challenged the debt in writing that additionally have to be consisted of in the guide.

Including additional charges

To identify if the debt collection agency could include service charges into your debt, consult your original agreement. If you consented to pay “collection costs,” the company could add affordable fees such as attorney fees, court costs, or credit rating guides. It could include collection as well as legal charges as enabled by state law if the company is accumulating on a bad check.

Partial settlements

A collector can require full payment of the debt. It can, however does not have to, accept a partial settlement strategy.

Post-dated checks

An enthusiast could ask that you write a post-dated check, but you could not be called for to do so. If you offer a collector a post-dated check, under federal legislation the check could not be placed just before the date composed on it. And if you offer the agency a contact the day greater than 5 days in the future, the enthusiast must offer you timely written notification before the check is deposited.

A collection agency could not:

– publish listings of folks which owe money; utilize a badge or attire of a law enforcement agency or case to be from a federal government agency;
– use documents which look like court or government documents, telegrams, or emergency messages;
– make accumulate phone calls or send gather telegrams;
– go against postal policies;
– endanger to add fees that aren’t legal, for instance, a rates of interest higher than the rate in the original agreement;
– garnish your salaries or take your couch or possessions without a court judgment, or; intimidate to have actually a debtor put in prison for uncollectable bill.

The first time a collection firm calls you; it should give its name as well as address, and also the name of the initial financial institution (the company or individual you owe cash to). Under the FDCPA a collection company could not call or create to you more compared to three times a week. If you have a lawyer, the regulation bans a collection firm from calling anyone various other than your attorney. If the company is gathering on a bad check, it could add collection and lawful fees as allowed by state legislation.

If you give a collection agency a post-dated check, under federal legislation the check could not be transferred prior to the day composed on it.

FDCPA is the single biggest thing that protects the consumer from illegal collection of “zombie debt”. Read up and protect yourself. For more information contact any of our team members for a free consultation.