COLLECTION MYTHS BUSTED
We have all heard lots of these myths. Some are told by friends who have had collectors calling, some have been told by collectors as myths, and some are urban myths started on some internet webpage.
1. If you dispute, they must validate within 30 days. FALSE. When a debt collector contacts you, you have 30 days to dispute the validity of the debt, or they will assume it is valid. If you dispute within that 30 days, they must pause all collection activity until they provide validation of the debt. Not within 30 days. They have an unlimited period of time to get that information to you.
2. If you dispute, they must provide proof of the debt. FALSE. They have to provide validation, which is not much more than going back to the creditor to make sure they have the correct person and the correct amount. If you make a SPECIFIC dispute, they must investigate the specifics of your dispute, but a general dispute does not trigger any real investigation.
3. If you do not respond, they canot do anything. FALSE. If you fail to respond, they can do all sorts of thing, including call, write, place the item on your credit report, or even under some circumstances sue.
4. If you dispute, they can still put it on your credit report. SORT OF. They can report the account to the credit bureaus, but they must report that the account is disputed. Supposedly, this account will not be scored, but it is very difficult to tell. Further, disputed accounts must be resolved before Fannie Mae or Freddie Mac will underwrite a mortgage loan.
5. If you call a debt collector and tell them you will not pay, they have to leave you alone. FALSE. A refusal to pay must be in writing. We recommend that you advise the debt collector that you refuse to pay in writing by certified mail. However, there are risks to using this tactic. The biggest is that they can still file a lawsuit, for which if you do not defend, they will win.
6. If you don’t pay, they can put you in jail. FALSE MOSTLY. There are a few instances where a debt collector can put you in jail. You can go to jail for writing checks on someone else’s account, or if your account was closed. Sometimes, you can be jailed for writing a bad check, but that is fairly rare, and in most states, that requires very specific requirements. IF your situation meets that problem, it is the crime of bad check, it is never bank fraud, or wire fraud. Here is another blog entry on that.
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Krumbein Consumer Legal Services, Inc.
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Richmond, VA 23230