Collection Agencies and your credit file
Collection Agencies are a major source of inaccurate information.
The two most common situations are:
A lack of communication between the agency
and the original creditor
Poor reporting and record keeping procedures.
Many of you have had a bill turned over to a collection agency.
What happens is the original creditor lists the item as a
collection in your credit file. After a short period of time
your account may be transferred to a collection agency who
also lists the item as a collection in your credit file. Accounts
may be sold, or reassigned to another agency or reassigned
by the original creditor to a new agency. The problems is
often that the account is being listed several times on your
report and even if you pay the original creditor or the last
agency to collect on the account, chances are very high that
the duplicated collections will remain on your record for
SEVEN years, unless you get it corrected.
Another Major headache has surfaced. Consumer
Financial Services corp. (CFS) specialized in buying VERY
OLD out of statute credit card collection accounts. CFS went
out of business in the midst of scandal and formal charges.
The problem is that other collection agencies purchased these
accounts in bulk and started reporting them as new collections.
Many of them without proper notation of the original creditor,
date of last activity, etc. I personally know a person who
worked for CFS prior to their demise and they said that they
believed CFS had some of the poorest records and record keeping
procedures and did not even know who the original creditor
was in many instances. I strongly suggest that you thoroughly
investigate any collection with CFS listed as the listing
creditor or original creditor.
You may be the kind of person that ALWAYS
pays every bill on time, but your health insurance company
does not. You may be surprised at the amount of collection
items in your file.
Laws applying
to Collection Agencies
Collection agencies and collectors must
comply with the Debt
Collection Practices Act, 15 USC § 1692, which strictly
regulates debt collector’s actions in acquisition
of location information, communications
in connection with debt collection, harassment
or abuse, false
or misleading representations, unfair
practices, validation
of debts, multiple
debts, legal
actions by debt collectors, furnishing
certain deceptive forms. If you find yourself the target
of debt collection action, make sure that the collector is
staying within the law, or they can face civil
liability $$$ . Here is a recent example.
Here is a link to Bud
Hibbs, one of America’s consumer credit experts.
you can use a letter like the sample letter
if you are contacted by a collection agency, attempting to
collect a debt which you do not owe. They cannot continue
to collect, until they have verified that the debt is actually
valid, once you have sent them this notice. You must send
this letter, as all the others, registered mail, and retain
copies and all receipts as proof of mailing.
You can use a letter like the sample letter
if you are contacted by a collection agency, attempting to
collect a debt which you do not owe. They cannot continue
to collect, until they have verified that the debt is actually
valid, once you have sent them this notice. You must send
this letter, as all the others, registered mail, and retain
copies and all receipts as proof of mailing.