How can Consumers Eradicate Phantom Debt?

Consumers in Oak Park and throughout the Chicago area often receive calls from debt collectors informing them that they owe money to creditors. In some of these situations, the debt collector engages in practices that violate the Fair Debt Collection Practices Act (FDCPA), leading consumers to file complaints with the Consumer Financial Protection Bureau (CFPB). Even when debt collectors do not engage in clear violations of the FDCPA, they still might attempt to collect on debts that a consumer does not actually owe. We often describe these as “phantom debts.”
When you continuously receive calls from debt collectors about phantom debt, what can you do to put an end to this contact? According to an article in USA Today, there are steps consumers can take to “vanquish a phantom debt for good.”
Why do Debt Collectors Attempt to Collect Phantom Debt?
As the article suggests, there are a few general reasons that consumers get calls concerning phantom debt. In some cases, the debt collectors do not have bad intentions but simply have inaccurate information about the debt the consumer owes. To be sure, “debt files can be sold from one collector to another, and over time errors and incomplete information can build up.” As such, a debt collector might have information that suggests you actually owe the debt when the statute of limitations has passed, or in cases where the consumer already paid the debt or had the debt discharged through personal bankruptcy.
In other cases, however, debt collectors know that the debt is no longer good and attempt to collect it anyway. Depending upon the particular situation and the tactics used by the debt collector, attempts to collect on debts that clearly are no longer owed could represent a violation of the FDCPA. In other situations, still, debt collectors might actually be scammers who are claiming to work for debt collection companies but are in fact attempting to run a scam on a vulnerable consumer.
How do I Get Rid of Phantom Debts?
Many consumers know that simply informing a debt collector that you do not owe the debt typically will not lead the calls to stop. Given that even legitimate debt collectors are not aiming to provide consumers with information—rather, as the article emphasizes, their goal is “to get you to pay”—it can be difficult for a consumer to effectively show that she does not owe the debt for which she is being contacted (and sometimes harassed).
From the start, you should never immediately send money to someone who calls and claims to be a debt collector. Rather, according to Cristina Miranda, a project manager in the division of consumer and business education at Federal Trade Commission, you should “think about what your legal rights are and what you can do to assess if it’s a real debt or not.” Here are some steps you can take:
  • Request information from the debt collector, including the company’s name, physical address, and phone number, as well as a validation letter that confirms the details of the debt you allegedly owe;
  • If you do not owe the debt, send a written letter to the debt collector telling the company that it must stop contacting you (which the company must do under the FDCPA is you do not owe the debt);
  • If you have proof of payment on the debt, send that to the debt collector;
  • File a complaint with the Federal Trade Commission and/or the CFPB and/or the Illinois Attorney General’s office.
Have you been harassed by a debt collector? You have rights under the FDCPA, and an Oak Park consumer protection lawyer can help. Contact the Emerson Law Firm for more information.
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