People undergo so many financial transactions in their lives that it’s impossible to keep track of them all. Debt collectors do not only know this, but they count on it. They use it to try and collect on debts that someone never owed. These are known as phantom debts, and you are under no legal obligation to pay a debt that you never borrowed. Of course, no debt collector will ever tell you that, and they are actually hoping that you do not ask.
So, if a debt collector is contacting you and asking you to repay a debt you do not believe you ever borrowed, is there anything you can do about it? Fortunately, there is.
Your Rights Under the Fair Debt Collection Practices Act (FDCPA)
While some creditors and debt collection companies do not act fairly, you do have rights. Under the federal Fair Debt Collection Practices Act (FDCPA), you have the right to ask the debt collector to verify your debt. This process is known as the debt validation process; you must request the validation within 30 days from the date of the first collection attempt. Once you have requested that the collector or creditor verifies your debt, they must provide proof that it has either owned the debt since it was borrowed or that they have purchased it from an original creditor.
If a debt collector can provide the necessary proof, they have the legal right to continue trying to collect on the debt. If they have standing—that is, they have something to lose if you do not repay the debt—the collector can even take legal action against you, such as filing a lawsuit against you and securing a court order that allows them to garnish your wages. On the other hand, if the collector cannot provide proof that they own the debt and that you owe it, they no longer have the right to continue trying to collect on the debt.
You can also determine if the debt is valid by checking your credit report with TransUnion or Equifax. If you do actually owe the debt, the original creditor and account may appear on your credit report. You can then ask the debt collector for the name on the original account and compare it with the report. If the collector states the correct name, it is a good sign that the debt is valid and can be collected from you.
It is important to note that credit reports do not always display the original creditor and account. For example, if you did not pay a utility bill and it was sent to a debt collector, your credit report will not show the original account. Any debt that has had the statute of limitations run out on it will also not appear on your report. It is important in this case to know that while the debt is still valid, the debt collector cannot take legal action against you to recover the debt.
Although checking your credit report is a good way to determine whether a debt is valid, debt collectors will sometimes list a phantom debt on your credit report. If, after checking your credit report, you see a debt you do not think belongs to you, you can dispute the debt. To start the process, send a letter to the credit bureau telling them you dispute the debt and specifically state
the errors you believe were made. Also, contact the furnisher of the debt to tell them you are disputing the debt. From there, the credit bureau will give you specific instructions on how to dispute the debt according to their own procedures.
After you contact the debt collector and the credit bureau, you should also get in touch with the original creditor if you have determined which company that is. You should inform them that a debt collection company is trying to collect on a debt that you have no record of borrowing. The creditor may be able to tell you if the debt is valid and if it has been sold to a specific debt collection company.
How to Stop Phantom Debt Collection Efforts
Just like with other unfair debt collection practices, it is possible to stop debt collectors from contacting you and trying to collect on a phantom debt. It is important to work with a South Florida debt defense lawyer to do this because you will have to start by sending the debt collector a cease and desist letter. An attorney will know the most important elements to include within the letter, including the actions you will take against them if they do not comply.
Although a cease and desist letter can stop phantom debt collection efforts, the debt collection company does have the legal right to contact you one more time after they receive your letter. During this point of contact, the debt collector can inform you that it will stop trying to collect on the debt, that it may take legal action to collect on the debt, or the specific legal action that will be taken.
How to Report Phantom Debt Collectors
Again, under the FDCPA, it is against the law for debt collectors to try and collect on debts that do not exist. If you have been contacted by a debt collector in regards to a phantom debt, you should report them to the Consumer Financial Protection Bureau, the Better Business Bureau, or Florida’s Attorney General. A debt relief lawyer can advise on whether you can also file a lawsuit against the debt collection company for certain damages.
Call Our Debt Defense Lawyers in South Florida Today
If you have been contacted by a collector for a debt you believe does not exist, call our South Florida debt defense lawyers today. At Loan Lawyers, we know how to prove a debt is not yours and will advise you of your legal options. Call us today at 954-807-1361 or contact us online to schedule a free consultation.