| Fake Phantom Debt Collectors |
| By Credit Federal |
Published
10/25/2008
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Collection Agencies
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Fair Debt Collection Practices Act Protects Against Fake Phamtom Debt Collectors
Examples of fake, phantom debt include:
- Debts that were legitimate at one time, but were either paid off or legally settled (Zombie Debts)
- Debts that are completely made up and were never legitimate
- Debts that belong to someone else and the collector knows it doesn't belong to you
What makes a phantom debt is any debt which does not exist or doesn't belong to you.
Collectors who engage in phantom debt collection are in violation of the Fair Debt Collection Practices Act (FDCPA). Collectors are not allowed to mispresent the amount you owe, and claiming you owe a nonexistent debt violates the act.
Why would someone try to convince you that you owe a debt? The hope is that you will pay it without question, that you'll think you possibly owe the debt. The fake collector may say the debt is a low amount, so low you'd rather slip a check into the mail than to spend time and effort investigating.
So although a debt may; on the surface, appear legitimate to you and the debt collector may also sound sincere, don't automatically belive it. It's easy for us to believe we owe money which perhaps we had forgotten about or which we're not sure had lapsed the Debt Statute of Limitations.
You are not obligated to pay fake, phantom debt
How can you tell if the debt is legitimate of phantom debt?
The FDCPA gives you the right to make a debt collector verify your debt through a process known as debt validation. You have 30 days from the date the debt collector first contacted you to request validation of the debt. Then, the collector has 30 days to provide proof that it owns the debt or has been assigned to collect it by the original creditor. If the collector can't provide proof, it can't continue to collect from you.
Check your credit report. If the debt is legitimate, the original account may be listed on your credit report. Have the collector give yout the name of the original creditor and check your report for it. Not all original accounts appear on your credit report. For example, if the alleged collection is for a past utility bill, it won't be on your report.
Make sure the collection agency hasn't listed the phantom debt on your credit report. If necessary, you can submit a credit report dispute to have it removed.
Contact the original creditor. Let them know a collection agency has been trying to get you to pay a debt and you have no record of the account. The supposed creditor will be able to tell you if the account is legitimate and if it's been assigned to that collection agency.
Other Rights:
You can stop collectors from calling you about any debt; whether legitimate or phantom, by sending a written letter requesting them not to contact you. When the collector receives your letter, it can contact you one final time, in writing to let you know one of these things: that it won't collect the debt anymore, that it may take certain actions against you, or that it will definitely take certain actions against you.
Since it's illegal for debt collectors to make up debts, you can report the collector to the Federal Trade Commission, your state's Attorney General and the Better Business Bureau. You can also file a lawsuit against the agency for actual damages and punitive damages. You can also report the collector if it continues to list the debt on your credit report, ignores your validation request and continues to collect the debt, or ignores a cease and desist letter.
Need debt relief help? Consider credit counseling or negotiate debt settlement.
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