Minnesota Attorney General's Office
1400 Bremer Tower
445 Minnesota Street
St. Paul, MN 55101
M - F 8 am - 5 pm
Legal Alert of The Month
Are You Haunted by Debt Collectors for Money You Donít Owe?
At Halloween, many people decorate their homes with Jack-Oí-Lanterns, witches, ghosts, and zombies. But, there is another kind of zombie to think about: zombie debt. Zombie debt is a debt that is so old that the original creditor has given up on collecting it completely. Debt buyers purchase these old debts for pennies on the dollar. Often times, all that is purchased are large electronic portfolios of thousands of customers who incurred debt years ago. The debt buyers then cast a wide net to find people who incurred the bills. In their efforts to track down old customers of the original creditor, debt buyers sometimes target the wrong people. This occurs for several reasons: the original creditor may have made an accounting error, the person may be a victim of identity theft, or the creditor may have found the wrong person with a similar name.
It can happen like this:
ďHildaĒ receives a call at dinner time from a collector who tells her she owes $493.47 on an old credit card bill. Hilda tells the caller she doesnít owe the money and has never done business with the credit card company. The next week, another call comes from the same collector, this time while sheís putting her children to bed. She again tells the caller that the debt isnít hers. After months of disruptive calls, Hilda finally shakes the collector, who, it turns out, was trying to find someone with the same first and last name but a different middle initial.
ďFrankĒ receives repeat letters from a debt buyer attempting to collect several hundred dollars on an old phone bill with a phone company with which Frank never did business. When Frank calls to dispute the debt, he is told that the original debtor lived in Florida. Frank has lived his whole life in Minnesota. The debt buyer was pursuing the wrong person. Frank spent several hours trying to fix the problem, with the collector taking a ďguilty until proven innocentĒ tone with him.
Donít Get Spooked When Debt Collectors Come Calling and You Donít Owe the Money
The following are some tips to follow if you are pursued by a collector for money you donít owe:
- Telephone calls. If a collector calls you and asks you to pay money you donít owe, you should politely explain why you donít believe you owe the money and ask the collector to acknowledge that it is taking you off its call list. In addition:
- Be wary about providing personal information over the phone to collectors who ask for your account number, Social Security number, or other private data. Scam artists posing as collectors sometimes try to dupe consumers into revealing their private information, which is then used to steal the consumerís identity or post unauthorized charges to their accounts.
- Under federal law, within five days of a phone call, a collector must send you a written notice telling you the amount of money you owe, the name of the creditor and what action you should take if you believe you donít owe the money.
- If you tell the collection caller you donít owe the money and it persists, ask for the collectorís name and mailing address and for it to send you documentation to substantiate the debt. After you receive the collectorís response, if you still donít think you owe the money, write the collector a letter disputing the debt.
ďUnless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume the debt is valid. If you notify our office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt.Ē
Upon receipt of your letter, the collector must stop contacting you unless and until it can substantiate the debt. Your letter of dispute should be sent to the collector by certified mail, return receipt requested. you may want to ask for validation of the following types of information if you donít owe the money:
- A full itemization of the debt, including a breakdown of the total principal, interest, fees, and other charges.
- The service or merchandise provided for the debt.
- The full name and address of the debtor at the time the debt was incurred and the last four digits of the debtorís Social Security number.
- The full name and address of the original creditor.
- A copy of the applicable contract giving rise to the debt.
- Other documents to support the debt.
If you suspect that a debt collector isnít playing fair, you may wish to file a complaint with the Minnesota Department of Commerce, which licenses debt collection agencies and has the authority to suspend or cancel a debt collectorís license if it violates the law. The Minnesota Department of Commerce can be reached at:
Minnesota Department of Commerce
85 East Seventh Place, Suite 500
Saint Paul, MN 55101
The Fair Debt Collection Practices Act (ďFDCPAĒ) is the federal law that outlines rights consumers have when dealing with collection agencies. The FDCPA is enforced by the Federal Trade Commission. Complaints about a debt collectorís conduct under the FDCPA should be directed to the Federal Trade Commission at:
Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue NW
Washington, D.C. 20580
Toll free: 1-877-382-4357