Under the Fair Debt Collection Practices Act, collectors
are supposed to advise consumers that they have a right to
dispute the debt, but that if consumers don't do so promptly
-- and in writing -- the collector can assume after 30
days that the debt is valid.
Once collectors are notified that they've contacted the
wrong party or that the consumer denies owing the debt, the
companies are supposed to provide proof of the debts' validity.
If they can't supply the proof, collections are required
by law to cease.
Of course, some collectors simply ignore laws designed
to protect consumers. But debt experts say your chances of
getting
a collector to back off improve when you know your rights
and assert them forcefully.
If you're contacted about a debt you don't owe:
-
Know
your rights. The Privacy Rights Clearinghouse has
prepared a fact sheet for consumers dealing with third-party
debt
collectors.
-
Get
the name of the collector, its address and
a telephone number. You can tell the collector on the phone to
stop calling, but that won't preserve your rights under federal
law.
-
Send a
certified letter, return receipt requested. Make it clear the collector has contacted the wrong
party,
that you
don't owe the debt and that you don't want to be
called again.
-
Contact
regulators. If the collector continues to
call, seek help. Typically, your state's attorney
general's
office handles
complaints against collectors. You can also complain
to the Federal Trade Commission, which typically
doesn't intervene
in individual cases but may act if it sees a pattern
of abuses.
-
Monitor
your credit reports. If a collection agency
posts a bogus debt on your credit report, dispute
the item
immediately with the credit bureaus. Include
copies of the certified
letter you sent the collector and any complaints
you filed with regulators. Don't wait until you're
about
to apply
for a loan to check your credit report; you'll
want at least
a few months' head start to dispute any errors.
-
Consider
a lawsuit. Consumers
can bring lawsuits against collectors that violate the Fair
Debt
Collection Practices
Act, either on their own behalf or as part
of a class action. Contact the National Association
of Consumer
Advocates
for referrals to attorneys who handle such
cases.
Liz Pulliam Weston's column appears every Monday
and Thursday, exclusively on MSN Money. She
also answers
reader questions
in the Your Money message board.
To find out how AlanAssociates can help you,
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