Debt collectors make more than a billion contacts with consumers each year, according to ACA International, the debt collection trade group. Unfortunately, in some of those contacts, rogue debt collectors step way over the legal line. Take Diana Mey of West Virginia, whose story I told online and on "Nightline" Wednesday. According to the lawsuit Mey filed, debt collectors implied they were going to seize her home and followed up with sexually menacing calls. And here's the kicker: It wasn't even her debt! Diana Mey is debt-free.
The debt collection industry is an important part of our economy. But people shouldn't have to pay other people's debts! This kind of mistaken debtor identity is increasingly common. Adam Levin of Credit.com coined the term "debt tagging" to describe it. Debt collectors sometimes pursue a person just because his or her name or home town matches the debt they're trying to collect. Tag, you're it. In a growing number of cases, the debt doesn't belong to the person being hounded.
The problem's on the rise partly because of a new breed of debt collectors, called debt buyers, who purchase old, outdated debts when the original creditors have given up on them. They pay pennies for these lists of unpaid accounts and then try to turn many times that in profit. Critics say debt buyers may be relying on inaccurate information, because it's so old, and sometimes use outrageous tactics to get the money where others have failed, including going after the wrong people. Some victims have become so frightened that they have actually paid debts that are not their own.
Of course, even if a debt does legitimately belong to you, debt collectors should not break the law when pursuing you for it. In the past, I've written about how to get legitimate debt collectors to stop calling you. Those should be your first steps. But now I want to share some entirely different advice.
Here are 10 guerilla tactics you can deploy against rogue debt collectors who don't follow the rules.
Debt collectors are less likely to keep pursuing you if they know that you know the rules. So, early in the conversation be sure to say the following: "I know my rights under the Fair Debt Collection Practices Act." Just knowing the title of this law that governs debt collectors should help. Then follow up by exercising those rights. Immediately ask the name and address of the debt collection company. Then ask who the credit card or other loan was originally with, the amount of the original debt and the date of the original debt. Next, demand that the collector send you a letter that proves the debt exists and belongs to you. Whether it belongs to you or not, if you do not wish to receive any more collection calls, write the debt collector a cease and desist letter telling it to stop. Send it certified. By law, the debt collector must stop. Sometimes making these requests is enough to get it to go away. If not, read on.
|Pretend You're Going to Pay.|
You need the debt collection company's name and address so you can send it that cease and desist letter, telling it not to contact you anymore. The easiest way to get it is to pretend you are going to send in a payment. One caution: If the debt does not belong to you, make sure you do not say you're going to pay it. They record those calls and could use it against you. Instead, say, "I don't believe this debt belongs to me, but if I research it and find that it does, where would I send a payment?"
|Get their number.|
If you still haven't figured out what company is harassing you, get its phone number ASAP. Rogue debt collectors often operate via a series of shell corporations and change names and move to cover their tracks. But the phone is their lifeline, so they will give you a phone number where you can call them back and take more abuse. Instead of calling back and asking for the individual collector handling your "case," call and try to speak to the receptionist. If you're smooth -- and persistent -- you should at least be able to squeeze the company's name out of the receptionist. Try for the address too.
|Order your credit report.|
Still in the dark? Order all three of your credit reports from the major credit bureaus for free here. Debt collectors often get hold of your credit report right before making their first contact with you. They use the identifying information in it as leverage to get you to pay up. Time to turn the tables and use it to look up their identifying information. Typically, the debt collection company's name and address will appear on your credit report in the inquiries section. That's where you will now send your cease and desist letter.
|Search the name of the company.|
Once you have the company's name, search it and every variation of it that you can think of online. For example, if the company is called Al's Aggressive Collection Company, you will want to search that plus the initials –AACC—plus Al's ACC, Al's Aggressive, Al's Collection Company and so on. Find the right combo and you are likely to uncover a treasure trove of online complaints from other consumers that will tell you what you're up against. Read up on the company's typical tactics, owner's names and what has worked to get it to go away.
|Search the phone number.|
Since rogue collection agencies often change names, also search the phone number you've been given. This can be a real goldmine, because, again, collection companies, no matter how sneaky, eventually need to give their targets a way to reach them back. Sites like 800Notes.com, CallFerret.com and WhoCallsMe.com are fantastic forums for consumers to swap information about intrusive callers.
Just as the information you find online helps you, you should leave a trail of breadcrumbs for the next guy. The more people band together and share information, the harder it is for the bad guys to operate. All hail the Internet. Information is power. Write a detailed description of what you have been through and post it to several sites such as: The Better Business Bureau, ConsumerAffairs.com, ComplaintsBoard.com and RipoffReport.com.
|File with the FTC.|
It's also important to alert the nation's consumer watchdog, the Federal Trade Commission. It can be disheartening at first because the FTC doesn't take action on individual cases. But if enough people complain about the same company, the feds will take action. Here's a sample of the fire and brimstone the FTC can bring to bear when inspired. The FTC says debt collectors garner more consumer complaints than anybody else except identity thieves. The other reason you want to file with the FTC is so that you can show you have taken all of the mainstream steps should there come a time when you are ready to sue.
|Record Calls IF You Can.|
If the steps above haven't worked and you are still getting a barrage of threatening phone calls, you should explore the possibility of recording them. According to the Reporters' Committee for Freedom of the Press, 38 states allow their citizens to record phone calls without the other party's knowledge. Here's a state-by-state guide, but I urge you to confirm the guidance in it with officials or lawyers in your state. If you learn that you are in the clear, in this technological age, it's easy to record calls. No, you won't be holding a Dictaphone up to the receiver. (Do you even remember Dictaphones?). Diana Mey, now a grassroots phone privacy activist of sorts, records all her calls using this software. Of course, there are other options out there. Find the one that's best for you.
There are lawyers who make suing debt collectors one of their specialties. (And they especially love cases in which the victim has recordings.) I just searched the key words "attorney" and "debt collection" and "harassment" and "lawsuit" and came up with more than 2 million hits. They are out there waiting to hear from you. The Fair Debt Collection Practices Act is unusual in that it spells out monetary rewards consumers should receive if wronged by a debt collector. You can get cash for whatever financial harm the collectors have caused you, plus a $1,000 penalty. If you sue as part of a group, the potential settlement soars up to $500,000. Of course, if you win, you'll have to collect the money from the collectors. Just make sure you use only legal means to do it, or somebody else could be using these 10 tips against you!