This is the
story of how a debt can become a nightmare: a credit nightmare, a payment nightmare, and one of those
recurring nightmares, the ones that you think are gone but come back to haunt
you in the middle of the night.
Let me say up front: I do
not owe any money to the people attempting to collect this alleged debt; I do
not believe I even owe any money to the people who originally sold this
debt. And I know for a fact that I
paid all or some of this debt to the debt collectors in the middle of the
story: a shady bunch of folks, it
seems.
It all started back in 1998 when something happened, it’s so long ago, I really cannot remember what: but, whatever happened led me an emergency room where I was examined, I assume, by some doctors. In any event, I had two types of insurance at that time – both my own employer’s family plan and my husband’s. Apparently, the Emergency Room docs either failed to submit my claim to my insurances, submitted them and were rejected or, in a more nefarious scenario, submitted them and were paid. As far as I was concerned, that was that. I do not recall receiving bills from them except perhaps one in which, at the time, you filled out the back if you had insurance – something I am sure I did. But in true emergency room fashion, somewhere along the way, someone did not get paid or thought they did not get paid or whatever, because they sold the “debt” to a debt collection agency. Of course, I did not know about the sale of the debt. In fact, I did not know that I still owed them money according to them.
Sometime in 2002, we attempted to obtain a loan to refinance our house, and my credit was low; in part, because I had a debt in collection. I had never heard of the company that claimed I owed them money, but, surprise, surprise, I got a call from a debt collection agency, NCO, around the same time (summer 2002), telling me that they had bought the debt from another agency: Med Clr. It was Med Clr that had notified the credit reporting agencies of my alleged debt, but Med Clr never attempted to collect it. (As it turns out, in my recent investigations, Med Clr and NCO are one and the same, I believe).
Anyway, because it was lowering my credit by so much, even though I did not think I owed any money, I agreed to “settle” the debt with NCO for $158.00. I actually thought it was a good deal: the alleged debt was over $400.00, they were taking $158.00, they would remove the debt from my credit report and I would gain 60 points on my credit score which would be good all around. I did the whole thing over the phone giving them my debit card. BIG MISTAKE. In any event, life moved on, we refinanced in my husband’s name, and, I forgot all about the whole thing.
The following year, I ordered my credit report, and, no surprise, the debt was still listed under someone’s name (I think Med Clr but it may have been NCO). I wrote a fairly fancy letter to all three credit reporting agencies; or, at least I guess it was fancy because the credit reporting agencies had the nerve to tell me that they did not choose to investigate my dispute because they believe that people who use “credit repair” services often set off phony investigations. In their opinion, my letter was from a "credit repair" service; therefore, they were not going to bother with it. Make note here: I wrote the letter and signed it myself – my mistake was that I actually TYPED it. Who knew typing a letter meant that you were reporting a frivolous claim?
I was fairly indignant: just because I wrote an excellent letter, they assumed it was from a credit repair service and, shirked their responsibilities to clean it up. Indignant, however, is not the same as proactive: but eventually, I followed up, by getting all the forms on line and handwriting all the errors in my credit reports to the agencies. Honestly, I have no idea why, but it worked: I believe that the alleged debt was removed by whatever agencies were reporting it. It was the strangest thing: a nice, typed letter did not work; a handwritten, sloppy off the top of my head report ON THEIR FORMS did the trick. Go figure.
Although the debt was removed by the credit reporting agencies, it was not erased from my life: in 2005, some other debt collection agency called me about the mystery debt – I went nuts. I hate working hard on a problem only to have it come out again and again in some different form: how many hours of our lives do we spend on clearing up other peoples’ decisions to attempt to rip us off? Because by now it should be clear that the debt collection companies were attempting to rip me off: it was a 1998 debt; I had insurance that did or would have paid for the debt; if the insurance did not, I might have had the doctor contacted me directly; it went to a debt collection company who I did not hear from until 2002; I “settled” it; and 3 years later, someone else is calling me telling me they bought the debt. COME ON!
Anyway, the new company whose name I do not recall, again offered to “settle” the debt with me over the phone: the offer would be good for that moment only. I told the person that I needed to have all the information in writing: the original debt, where it had been, and from whom they bought it. They could also put their offer in writing, and, if I wanted to pay it, I would do so in writing. They said that they could not do business that way: I said, what way, the correct way?
On to a “supervisor.” I explained that I did not believe I ever owed the money, but, I settled it even so because, at the time, it seemed to be the easiest way to handle the debt. She insisted that I could not have settled this particular debt because her company had bought it. I insisted that they should not have bought a debt that was too old to be collected (at that point, more than seven years) and, had, in fact, been settled.
The supervisor huffed and puffed (and I mean that quite literally) and said that if I wasn’t going to pay, why was I wasting her time? I reminded her that one of the people working for her had called me, and that I thought that I was speaking to her to fix a problem: her company’s attempt to collect money from me. Her response was to offer me almost the “deal” NCO had given me three years before: I could pay ½ the debt as settlement in full. I explained that such a deal had not worked the first time I took it and was, therefore, understandably reluctant to make the same “deal” again. I suggested she put it all in writing and she screamed at me that her company would (a) sue and (b) place a report in my credit files about my refusal to pay a debt owed to her company because her company had bought the debt. I told her to go for it and hung up the phone.
That was before I decided to take control over my money and, if you have been reading this web site, you will see that I am not about to waste my money or allow my credit to be reduced just because an issue might be inconvenient to take care of this moment. I got my credit reports this summer, and the debt did not appear on either my Experian or Equifax reports and, frankly, I was thrilled. (I did not get my Trans Union report).
So, the upshot is: I just got a letter from a new collection agency. Guess what? They bought my “debt” from NCO and other creditors and, if I am so inclined, I can either settle it at once for 40%, pay it in three installments totaling 70% or send them whatever I can afford right now and keep doing so until the debt is fully paid off. I was livid: they are clever little buggers: they never mention the original debt at all, because, I assume, they are well aware that it is out of date for both credit reporting purposes as well as for their ability to collect it under state law. While a part of me wanted to call them right away and freak out, I waited until calmness prevailed and I began to do what I have learned to do: I did some research.
I looked up the law and I looked for my payment to NCO. I found my payment to NCO although I do not even need it. First of all, The Fair Debt Collection Practices Act prohibits a range of behaviors on the part of debt collectors: they cannot harass you by using threats of violence or harm, publish lists of consumers that do not pay their debt, or lie to you about your debt; they cannot repeatedly contact third-parties (like your employer) about your debt, and, if they do so once, they cannot mention that they are calling to collect a debt.
For my purposes, the most important aspect of the law is part of the Fair Credit Reporting Act that prohibits debt collectors from reporting time-barred debts to credit reporting agencies. A time-barred debt is one that is no longer able to be collected because of state statutes of limitations (generally three to seven years from the time of the debt).
The FTC has an information sheet about time-barred debts: a debt collector can contact you about such a debt; it cannot sue you for it. If you are sued, you can have the case dismissed by a court. You can find out the statute of limitations within your state by contacting your state attorney general’s office. If you discharged the debt in bankruptcy, they cannot attempt to collect the debt at all. They cannot report the debt to credit reporting agencies after seven years.
What should you do if you are contacted about a debt that you believe is inaccurate or time-barred? According to the FTC: write to the collection agency and tell them that you do not owe the debt. Do so within 30 days of their contact with you. They then must provide you with written verification of the debt. If you believe it is time-barred, you can tell them to stop contacting you about the debt. Then, they can only contact you to tell you what specific action they plan to take. Do that within 30 days. If they continue to contact you, you can file a complaint with your local attorney general’s office and/or the Federal Trade Commission.
Interestingly, my research also revealed that NCO settled an FTC claim against them with respect to illegal actions related to time-barred debts, and, if I am not mistaken, my attorney general’s office is suing NCO right now for its acts in harassing alleged debtors. That is why I am going to deal with this issue right away: I am infuriated by the fact that certain debt collection companies take advantage of individuals. I was reading some of the complaints to my state attorney general’s office and an elderly woman was complaining that a debt collection agency was calling her in the middle of the night: an absolutely prohibited action. If you read some of the complaints, you see that some debt collection agencies really prey on peoples’ ignorance and make it so difficult to get rid of a debt once it is in their hands.
So, I am
writing a letter to this new debt collection agency. I am telling them that I do not acknowledge the debt and
that they need to verify it. Then,
since it is time-barred, I will tell them to stop contacting me. I will check my credit reports to see if they have reported the debt again. If so, I will file a complaint with my
attorney general’s office and the FTC.
Hopefully, I will end this once and for all; somehow – at least until
they sell the debt to the next collection agency.