With the growing popularity of collection agencies purchasing packages of old debts in recent years, there has been a dramatic increase in errors associated with collecting those debts. One of the fastest growing complaints about debt collectors is that they are demanding payment for debts that never existed or have previously been settled.
When a consumer is surprised by a collection letter or phone call about a debt that never belonged to them, they can be left feeling helpless or victimized. However, the law is on their side in these cases and the burden of proof is on the collection company. Many times, simply pointing out the error to the collection company is enough to get them to stop. In other situations, the debtor might need to be more formal or more assertive.
How Do Debt Collection Errors Happen?
The most common debt collection errors happen when two different people share similar names. The most basic example of this would be confusing someone named John T. Smith with someone in a nearby neighborhood named John L. Smith.
Another reason for debt collection errors is that bad information is often passed on to debt collection agencies when they purchase large packages of old debts. Whether the original creditor knew that the information was inaccurate or not, the purchasing collection agency likely has no idea whether or not their data is correct.
Debt collection errors can also exist as a result of identity theft. Many times, victims of identity theft are not even aware that they are victims until the debt collectors start calling them or send an account past due notice.
How Should Debtors Handle Debt Collection Errors?
If someone has contacted you attempting to collect a debt that you do not owe, your first step should be to point out to them that there is a mistake somewhere. One of the easiest ways to do this is to ask them to provide proof of the debt.
If they persist in attempting to collect the debt after you have told them that there is a mistake, you will want to demand proof and then demand that they stop contacting you. You should also keep a detailed record of all contact and interaction with the collection agency.
If the agency continues to harass you without providing proof of the debt, your next course of action will be to file harassment charges against them. You will likely have legal grounds for a civil lawsuit, but simply threatening legal action may be enough to stop them.
How Should Debt Collectors Handle Debt Collection Errors?
One common problem for debt collectors is developing a tunnel vision outlook where they believe everyone they contact is simply trying to avoid paying off old debts. This causes many debt collectors to overlook obvious signs that there is an error in their information.
Ethical debt collectors must make sure that they are always open to the possibility that their information is incorrect. They must be prepared to accept that they could be contacting the wrong person, or that the person may be the victim of identity theft.
Whether you are the mistaken debtor or the errant collector, respectful communication is the key in situations where there might be a debt collection error. Mistakes do happen. Making sure that you treat the other party the way you would want to be treated is the best way to discover the truth about a debt error.
