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Dollars&Sense: Know your rights, no collections
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Anonymous user Tue Nov 30, 1999 00:00:00 PST
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0 responses 0 comments Dear Tony,
I had a car accident back in 2004 and after making sure my insurance had paid all my medical bills, I put the terrifying experience behind me.  But, a year later, as I was trying to buy a home, a collection appeared. I had no idea what it was for.  I found out later it was a collection bill for the ambulance ride.  The ambulance service mailed me statements at an old address, so I never became aware of it.  The collection company said to me that if I paid them immediately, it would delete the record completely from my credit as if it never existed.

How do we deal with collection companies when a creditor doesn’t care to help you out? And, is it true that they can delete a collection from your credit report “as if it never existed?”

Signed,
Collection mess

Dear Collection mess,
One thing you must understand about collection agencies is that they are hired to do a job for a creditor. Many times, the people from the collection agencies are clients themselves and the agency is giving them a chance to pay off their debt to them by having them call you and collect from you.

So, when a collector calls you or writes you, first and foremost keep your “cool.” One technique collection agencies will use is to make the consumer lose their cool, so the consumer will say anything just to get them off the phone.

Consumers will even tell the collector that they will send the money — even when they don’t have it. Once you don’t send the money to them, after you told them you would, they now have something to hold over your head. They will tell you that your word is “no good.” They will elaborate that this is why you are in the mess you are now in.

Keep your “cool.” When they first contact you concerning the debt, inform them that you would like to see a copy of the original contract proving the debt.  Under the Fair Debt Collection Practice Act and the Freedom of Information Act, collections must provide you with such documentation upon request, or they must stop all collection efforts.

If the collection agency provides you with that information and it is found to be yours, first look at the date in which the account went bad with the original creditor, then look at the address of the collection agency. These are two very important areas to look at.

If an account is four years or older, the collection agency has no legal right to collect on that debt under Federal and State Statute. A collection agency or any creditor (except federal and state government) can only collect on a debt legally for four years before their statute of limitation has run out. However, they can still try to collect for the next three years but there is nothing legally that they can do to you during those three years. Hence, that is where your seven years come from for that item.

The second area to look at is the address of the collection agency. What most consumers don’t know is that, an out-of-state collection agency cannot legally collect from a California citizen. They can only collect from you, if you do not know your rights as a consumer or you pay them because you are afraid of action against you.

If it gets to a point where the collection agency is calling you nearly 24 hours a day and you are scared to take phone calls at home or at work, then all you need to say to them are three little words: “CEASE AND DESIST.”

These three words will stop any collection agency in their tracks — no matter who they are. If they still continue to contact you by phone or even by mail, they are in violation of your consumer rights.

For every time they contact you, there is a $1,000 fine for violating your consumer rights — these fines are federal fines, so keep good records of every phone call. At their request, you may have to send letters informing them to do so. (Please e-mail me at the address listed below and we will fax you a sample copy of that letter for free). There are many ways of handling any collection agency, and if you have a situation that you do not believe you can handle on your own, please seek the assistance of a professional organization.

Now the second question: Can a collection agency delete a collection from your credit report “as if it never existed?”

The answer is yes and no. Credit bureaus know and understand that mistakes happen. They also understand about the four-year statute of limitation.  What you have to remember is that credit bureaus are the ones who are reporting this information. The collection agencies hired the credit bureaus to report this negative information for them.

However, they have no control over the credit bureaus’ multi-million dollar reporting system.  But if they inform the credit bureau to remove an account on a consumers credit report, or to delete an item off a consumers credit report, the credit bureaus must do it because the collection agency informed them to do so.

So, yes, collections can be removed, but creditors must request it because the credit bureaus work for the collection agencies.

Remember, you are the author of your own destiny, and you, too, can have great credit.

Signed,
Tony

— If you have questions about credit or other financial issues, please e-mail them to: Tonyatxfc@yahoo.com
We will consider running your question and his comments in a future issue of The Northwest Voice.
— Tony Grimes is a local, independent debt consultant.

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