So This Debt Collector Got My Address...

Miscellaneous and Personal Stuff I Must Share
1

For a few months I have been receiving these “notices” and “settlement offers” from a debt collection agency. There are a few problems with this in itself; for one, it’s not my debt, which is pretty obvious upon reading the notice, but this latest one that I received today has to some kind of scam. I wonder if people actually fall for this.

First as I said, it’s not my debt. I know this because the correspondence is in my maiden name which I have not used since I was 17 (when I got married and changed it) and I had no debts at that time. The social is also wrong it says XXX-XX-6543 when my own last 4 are nothing even similar, and the debt is listed as owed to a bank I have never heard of in a state where I have never lived. So all in all, I think it is safe to assume that I am clear on this one- it’s not like a forgotten account or anything.

But here’s where it gets fishy and makes me wonder about the agency. It says the debt is from 1994 and is in the amount of $16,798 but being the kind, and generous company they are they will settle it for only $3359.60. Wow that’s an 80% discount! I should jump all over this because if I wait until after Feb 5 (yes, just 2 days from today) all offers are off the table and they will have no choice but to move on to “further collection actions”.

So now I am wondering…who would get this and just blindly send them $3359.60? And what would happen if someone did? If it were a legitimate debt would any company be willing to settle so low when it would be so easy to get a judgment if it went to court? That is an awfully high amount to be blowing off.

Now I know that collection companies buy these old accounts for pennies so any money they actually collect is profit, but why would they choose to collect 3000 if there were any chance of collecting 16,000? And if it were indeed a legitimate debt, wouldn’t sending in any payment start the clock again on the statute of limitations, so if I (or anyone) sent 3000, couldn’t they just turn around, claim that was acknowledgment of and a payment on the 16,000 then it would be all nice and fresh and could go to court without having to worry about a statute of limitations defense? Is that what they are counting on?

And is this a scam or it it merely a matter of someone who has a similar name to my maiden name racked up a debt and then the company somehow tracked my address down? I could understand mistaken identity, but this seems worse to me than just a simple mistake.

2

My parents got a letter like that a couple of years ago - bank they never heard of in a state out west with wrong info - and reporting it to the better business bureau got rid of them.

3

A hundred people probably got the same notice you did, for the same debt. Debt collectors play pretty loose when it comes to identify their mark, and in our case incessantly called our house a dozen times a day because my wife’s first initial was the same as the person with the debt, and her (maiden, not used for 5 years) last name was similar, and she used to live in the same state as the person TEN YEARS earlier. I have no doubt that with such loose criteria, they spam called at least a thousand people in an attempt to collect on this debt.

4

They buy the accounts very cheap and work on volume and prefer not to waste time and resources fighting in court. Best to offer the debtor a good deal and hope people just send the money in without any hassle, yet still making a profit. Otherwise, they could come up against litigious cranks who fight court battles and then they may end up with a worthless judgment anyway. Also, they realize if they go to court, it’s not a slam dunk, especially if they go up against someone with some legal knowledge. Often debt collectors don’t have good and easy proof of the debt.

I have heard stories of people just sending in money and then the debt collector comes after the debtor for the rest even though it was “supposed to be” a full settlement. People who blindly send in money don’t understand the situation.

If it is truly not your debt, then it is possible you could actually make money off this if you sue them. It could be an error but could also be some form of identity theft. Perhaps consult an attorney in your area.

5

It is my understanding that, in order to sue under the Fair Debt Collection Practices Act, the OP first needs to send this company a letter (certified) telling them not to contact her about this debt again. Once you send such a letter, the debt collector may only contact you again for one of two purposes:

  1. To tell you that they are no longer pursuing the debt.

  2. To inform you that they are taking a specific action (i.e., filing a lawsuit) to recover the debt.

Once you send that letter to them, and get confirmation that they have received it, if they contact you again with letters trying to get you to pay up, you can sue them under the FDCPA. See here for the FTC’s Debt Collection FAQs. And here is a story of a guy who has made $20,000 suing debt collectors for violating the FDCPA.

One more thing about this story. MitzeKatze, even if the debt collection company has the right person, and it actually was you who ran up the debt, it would probably be irrelevant now anyway. Every state has a statute of limitations on legal remedies for debt collection, and any debt from 1994 is almost certainly too old for them to collect now anyway. The exact length of time differs from state to state, but it’s usually in the 3 to 10 year range, depending on the state and the type of debt.

Now, there’s nothing to stop a debt collection company from trying to get someone to pay a time-barred debt (except an FDCPA letter, as described above), but if you tell them to go fuck themselves, there’s really nothing they can do once the statute of limitations has passed.

(Note: i believe that such statues of limitation do not apply to certain debts, like federal student loans.)

6

You are correct. That’s why I wondered if it was some kind of scam trying to reset the statute of limitations (if the debt were mine). If, for the sake of argument, I were the person in the notice, and I just went right ahead and mailed in a payment to them, couldn’t they start the clock all over? Then the delinquency would go from the last payment of this year and that payment would/could be acknowledgment of the debt itself so then they’d have another 3-10 years (depending on state) to legally collect.

It seems like that would be a pretty good ploy to me. After it has fallen off the credit report, then they could report it again as a new delinquency and keep it on there until paid etc. which could provide an incentive to pay for someone concerned about their credit (not me because they have the wrong social too). And they’d have a paper trail if they ever did take it to court (which they likely do not have now on a 15 year old debt) so the poor sap who paid them wouldn’t have much of a defense at all.

I don’t plan to do anything at all about it. It is annoying but not overly so, and it is just a letter every few weeks addressed to this person who is not me, so I will just ignore it (if they had my phone number I might feel differently) but it seems like an interesting way to circumvent the fair debt collections standards.

7

My husband and I had some financial troubles a couple of decades ago. We got behind on our bills, but we eventually paid everything off, after making some serious sacrifices. Imagine our surprise when some collection agency started calling us and demanded that we pay an old debt. My first step was to tell the caller to only contact us by snail mail, and never by phone. After they did that, I did a little Googling and found out that this company had a history of abusing debt collection. So I sent them a sweetly poisonous little note, telling them that I disputed that the debt was still owed, and that I was aware of their company’s practices. I gave references to court findings. I also copied the FTC on this letter, and I sent it to the company headquarters (also found by Googling) rather than the return address. I sent it registered, return receipt requested, and someone did sign for that letter. And I never heard another peep out of that company.

8

We had something similar happen a few years ago - someone with a similar name to DH’s had racked up some debts and somehow the collectors got our address and phone number. We did wonder if the debtor perhaps glommed onto our address and changed it just a bit, because one said that the address on file was 7XXX Street Name, and we live at 8XXX Street Name. So we figured that if they found that name on the same street, even with the different number, they’d be all over it. It’d be too weird if he really did live on the same street.

The last name is identical, but the name was similar in that DH’s is “Johnathan” and all of his accounts/credit cards/bills are under “Jonhathan,” but he prefers to be called “John,” while the other’s name really was “John.” Usually we didn’t have to go farther than the middle initial to figure it out. We still get mail for him all the time, too, although the collection calls have stopped - wedding invites, pictures from events, all kinds of stuff that he probably wants, but…

9

A buddy of mine in Oregon had a similiar situation. He sued the collection company for harrassment & won like 5 grand. ( 'Course it helped that he’s an attorney himself).
I do think it varies from state to state. I’ve heard horror stories about this kind of thing here in NY. If I’m understanding correctly, apparently the law says if you ignore a lawsuit for a debt, even if it’s not yours, you automatically get a judgement against you, which can mess up your credit and all that nightmare. So collection agencies just kinda go fishing & see what they find. Look into the law in your state & don’t ignore it because you already paid it or it’s not yours. Good luck!

10

Correct. If you don’t respond to the lawsuit, you’ll be subject to a default judgment. The debt collection companies know this, and they also realize that a lot of people don’t know it, so they use a scattergun approach to lawsuits.

There are probably thousands of people out there who think, “Hey, i’ve never borrowed from them, and i don’t owe that money, so i’m just going to ignore the suit.” They then get a rude shock when they receive notice of a judgment against them.

In at least some cases, judges are starting to get pissed with the law firms that pull this type of shit. Here’s a story from a few months back with a happy ending:

If more judges did this, maybe the debt collectors would get their shit together and act more honestly.

11

Good posts.

If they sue you, DO NOT IGNORE IT! DEFEND IT!

You might want to send them a dispute letter. If they sue you, then you want to have more arrows in you quiver to sue them back instead of just defending a suit they brought against you. Go here…

http://www.creditboards.com/forums/

12

Wait, are you 100% sure that this isn’t a case of identity theft? I mean, have you recently checked your credit report to make sure that there aren’t any random things on there that you aren’t aware of?

I mean, it’s not impossible that someone used 17 year old you’s info.

I’m sure everyone is right about this being a scam, though. Still, better safe than sorry.

13

I’m not worried about getting a default judgment. First they would have to file and I’d get notice of the case, and I wouldn’t ignore that. But also if they decided to ding my credit report or something with it, they’d be out of luck there too because they have a different social than I. The only thing that makes it appear to be mine is a (very common) first name and a (reasonably common) last name that I had more than 20 years ago but haven’t used (and it hasn’t been my legal name)since I was 17.

If I should receive a summons or anything official like that, I would definitely answer it and prove (if I had to) that it wasn’t me.

14

Minor point of clarification - they have to prove it is you that owe the debt - you don’t have to prove you don’t.

THis reaks of scam in so many ways - mail fraud even - I’d alert the postmaster to it and let them investigate.

15

I have some familiarity with the business. Chances are, if the debt is from 1994, it has been sold over and over again. Each time it is sold, a collection agency has likely tried to collect on it and failed. Each time it is resold and gets farther from the original creditor, the debt is purchased for considerably less. It is not inconceivable to think that this debt was purchased for under $500.00.

The question of why this agency is being so nice to you and offering you a settlement at such a small price is simple.

First, this is a volume business. The company likely purchases thousands of debts like this. $3k in hand with little to no effort is better than a 4 year battle to maybe collect $16k through the courts.

Second, it is likely that they have no idea where this actual person is. This person has likely been impossible to find for over 15 years. Even if you were the correct person, unless you pop up and identify yourself to the agency as such, chances are they will never find you. This is another incentive to settle with you for such a small amount.

In addition to the reasons stated above, there are more reasons why going through the courts is not beneficial to the agency.

As you have noted, the statute of limitations has likely run on this debt so the chances of the agency being successful in court is zero.

Next, going to court requires hiring counsel. This obviously decreases the agencys share.

Another problem for the agency is proving they actually own the debt. The chain of previous owners of the debt is probably quite lengthy. Often a court will require a whole chain of original and notarized documents which simply do not exist.

On top of the ownership issue, if you (the alleged debtor) dispute the debt, the current owner of the debt can’t produce a witness or anything to dispute what you are saying. The current owner probably has one or two documents which say the alleged debtor owes the money. The parties involved in the initial transaction which led to the alleged debt might be as hard to find as the alleged debtor.

It’s possible that the whole thing is a scam but more likely the company which now owns the debt is blanketing all with similar names to the alleged debtor hoping to hit the jackpot. Off the top of my head I do not know the legalities of doing this.

16

Not to hijack this thread, but I spend plenty of time in the court room cited in that New York Times piece. I have never witnessed a situation such as the one described in the article.

17

I’m sure you’re right. I wish it did happen more often, but i’m sure that Judge Dear is the exception rather than the rule.

18

Going along the lines of debt collection begin a volume business, actual, honest debt collection is really hard to accomplish.

Say you owed me $16K and I needed to sue you to get it back. First, I’m going to pay legal fees, filiing fees and service process fees just to get all the paperwork in order. A court date is set a few months down the road. Then, best case scenario, you don’t show up in court and my lawyer moves for a default judgment. Worst case is you actually show up, the thing gets continued one or two times, and we have a bench trial over the dispute. Hopefully I come out of it with a judgment at that point. Either way, that’s more attorneys fees.

So now I have a judgment. I can’t do crap with that. I have to go back to court a second time to convert that judgment into something that will compel you to actually pay the judgment. More attorney fees, more filing fees, and more fees for process of service. Let’s hope you don’t show up to this one and I can just move for default judgment again.

So now what can I do with all this paperwork? I have a few choices. I can seize your property, garnish your wages, or take it from your bank account. But those options all require working in conjuction with the police department, employer, or bank respectively. And there’s no guarantee at this point you even have a bank account, a damn job, or anything worth any money whatsoever that I can take. Or maybe you have a job for a few months and then pick up and leave that job. Now I’ve got to hire a private investigator to go track you down wherever you land and garnish those wages.

And if everything goes according to plan and I can garnish your wages for the next 10 years then maybe I’ll get all the money that’s owed to me.

Or you could just pay me 4 grand today. Seriously, I’ll take a check.

19

We seem to have a similar situation, in my house. My wife went to the grocery store a couple of years ago, or a Wal-Mart, or Target, or something…had a nice conversation with the cashier, who noticed from my wife’s check (which includes our address and phone number) that they had the same name…

Lo and behold, 6 months later, we start getting these collection phone calls and letters…turns out this other chick had started using our address and phone when she applied for credit…she wasn’t using my wife’s name, though…their first and last names are the same, but the middle initial is different. The authorities say they can’t do anything, since nothing illegal has been done…nonetheless, it’s been mighty inconvenient, and now we are getting letters from a law firm, threatening legal action. We’ve been ignoring them because the middle initial is different, so it is obviously NOT my wife…should we be paying more attention to these??

20

Thanks for this. I paid two ER bills in December but the hospital forwarded one of the bills for collection anyway. I politely told the collection agency–in writing–that the bill has been paid and will go this route if they still try to collect.