If you’re already in debt and contacted by a collection agency, it might be easy to believe the collection agent is pursuing you for a debt you really created. Even if you don’t remember the debt, a collector could have enough information to convince you that it’s real. However, debt collectors have been known to make up debts, so it’s in your best interest to verify that a debt is real before you pay or settle it.
Use Debt Validation to Reveal Fake Debts
The best way to verify that a debt is real is through the debt validation process. You have the right to ask a debt collector to send proof of a debt as long as you make the request within the first 30 days of being contacted.
When a collector contacts you about a debt that you’re not sure you owe, you should not admit to anything. Instead, you should ask for their name, address and the reference number they use for your debt. You may have already received a bill from the collector, but if not, you should also ask them for a written statement of what they say you owe. Then, once you have their name and address, you can send a letter, via certified mail, that requests debt validation. Once you send your request in writing, the debt collector has to back off until they send you “competent proof” that the debt is indeed yours.
The law doesn’t specify what exactly counts as “competent proof,” but a printout from the collector stating an alleged creditor and debt amount is likely not enough. To prove that you actually did create the debt, the collector probably needs to send something from the original creditor like a signed application or a receipt. Until you get something that confirms you actually created the debt, you should not acknowledge the debt could be yours and you should not pay or settle the debt.
While you wait on a response, you can dispute the debt with the credit bureau, if it appears on your credit report. The collector isn’t allowed to put the debt on your credit report if they haven’t sent the debt validation.
What to Do About Continued Collection Efforts
If the debt collector sends back “proof” that you feel doesn’t sufficiently show you owe the debt and you don’t have any record of the debt, you could ask that the collector not contact you anymore about the debt. You could also send a complaint to the Federal Trade Commission and your state Attorney General alerting them to the fact that a collection agency is pursuing you for a debt that doesn’t exist.
Credit bureaus are prohibited from reporting debts that can’t be verified. If the credit bureau continues to list the account on your credit report, even though you’ve disputed the debt, you could also report them to the Federal Trade Commission.
It’s probably a waste of money to settle a fake debt, even if it’s just to get a collector off your back. It’s illegal for debt collectors to say you owe a debt you don’t really owe. So, you should get law enforcement on your side when a debt collector presents you with a phony debt.