Debt collection companies often try to collect phantom debts in various ways. You are not required to pay these phantom debts. You do not need to pay these phantom debts. Image: CSA Images / Archive / Getty Images
Phantom Debts vs. Real Debts
Debt collection companies are often dishonest about the debts they are collecting. Therefore, it should not be surprising that collectors sometimes fabricate debts to collect. These phantom debts never existed, and although you are not obligated to pay them, the debt collector won’t tell you that. They hope you won’t ever ask.
Collectors trying to collect phantom debts violate the Fair Debt Collection Practices Act, the federal law that regulates third-party debt collectors. They are not allowed to “misrepresent” the amount owed to you and claim that you owe a phantom debt.
We have many financial transactions in our lives, and it can be hard to keep track of them all mentally. Unscrupulous debt collectors exploit this. They hope you believe you owe the debt and will pay them. If you are even slightly unsure about the legitimacy of the debt, do not acknowledge it or agree to pay it.
Is It a Phantom Debt or a Real Debt?
The Fair Debt Collection Practices Act gives you the right to request verification of the debt through a process known as debt validation. You have 30 days from the date of the first contact made by the debt collector to request validation of the debt. Then, after you request validation, the collector must provide evidence that they own the debt or that they have been assigned to collect it by the original creditor. If the collector cannot provide this evidence, they cannot continue to attempt to collect from you.
Check your credit report. If the debt is real, the original account may be listed on your credit report. Ask the collector to provide the name of the original creditor. With that information, you can check your report for the original account. Note that not all original accounts are listed on your credit report. For example, if the alleged collection pertains to a previously billed invoice, it may not appear on your report. Debts that have exceeded the reporting time limit may also not show up on your credit report because they are too old.
Ensure that the collection agency has not listed the phantom debt on your credit report. If necessary, you can file a dispute about the credit report to have it removed. Tell the credit agencies that the debt does not belong to you.
Contact the original creditor. Tell them that the collection agency is attempting to collect a debt and that you have no record of any account. The alleged creditor should be able to tell you whether the account is real and whether it has been assigned or sold to the collection agency.
How to Stop Collectors from Contacting You
You can stop collectors from contacting you about phantom debts (or any other debts) by sending a written request asking them to cease communication with you. When the collector receives your letter, they may contact you one last time, in writing, to inform you of one of the following: that they will no longer collect the debt, that they may take specific actions against you, or that they will definitely take specific actions against you.
Reporting Phantom Debt Collectors
It is illegal for debt collectors to fabricate debts. If you are contacted to pay a non-existent debt, report the collector to the Consumer Financial Protection Bureau, your state attorney general, and the Better Business Bureau. You can also file a lawsuit against the agency for actual damages and punitive damages. You can also report the collector if they continue to list the debt on your credit report, ignore your validation request, and continue to collect the debt, or ignore your cease communication letter. Be sure you know the ways you can prove that the debt is not yours.
Source:
https://www.thebalancemoney.com/how-to-fight-phantom-debt-960564
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