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Debt collectors calling to say you must pay a debt that you owe is a call that many people have experienced in the last few years.  Most of the people that work for debt collection agencies are very respectful of the people they are attempting to collect from, but some companies are abusing the trust of people that they are contacting by trying to collect on past debts that the individual is not legally obligated to pay because the debt has expired.

Understanding Expired Debt

A debt that has expired is a debt that has existed for more than seven years and has not any type of activity on the account throughout that time.  Legally, a person is not obligated to pay these debts due to a legal statute of limitations placed on collections of debts across the nation. These laws were put in to place in order to prevent the collection agencies from attempting to collect on debts that are virtually impossible to validate.

Even though this type of debt collection is illegal, there are some unethical debt collection agencies that still try to collect on these debts anyway. Why do they do it? Simply put, they are relying on a person’s lack of knowledge of the laws surrounding debt collection to collect money that they are not legally entitled to. These companies have nothing to lose due to the fact that all they have invested in the account that they are attempting to collect on is time, nothing else. 

The debt collection companies do not have any affiliation with the original account holder as they have typically purchased the debt from the original company for pennies on the dollar or have been assigned the account from another company. This means if they can collect any portion of the original debt it becomes nearly 100% profit for the debt collection agency.  For this reason, many of these companies use highly aggressive collection tactics that a legitimate collection agency would not use for fear of being held accountable for the tactics in court. These unscrupulous companies want to achieve a level of fear that would get the individual to pay the debt more quickly without asking too many questions about the transactions.

Can I Do Anything About It?

Yes.  If you know a company is trying to collect on a debt that is more than 7 years old and there has been no activity on the account, you can simply inform the debt collection agency that is attempting to collect the debt that you are fully aware of the laws surrounding the debt, and any further attempts to collect that debt will cause you to report them under the Fair Debt Collection Practices Act.  Sometimes alerting these companies just is not enough, as there have been cases where they have actually changed dates to reflect current activity on the debt, so they can extend the period of time to make the debt valid. If you find this to be the case, report them under the Fair Debt Collection Practice Act without hesitation. If you need to you can even take the collection agency to small claims court and have them pay you damages for harassing you about an expired debt.

The collection industry has changed a great deal in the last ten years.  Where companies used to assign a debt to their collection department or to a collection agency and paid them after they has collected the debt, now companies are selling their debt to the debt collection agencies at a fraction of the balance of the account.  If the collection agency is able to collect the rest of the debt from you, then they get to keep the difference between the money that they paid to the company and the money that you paid to them.

This trend has resulted in some debt collection companies using some unscrupulous practices in order to collect a debt that they think that you owe.  They attempt to collect debts that they are not legally entitled to, add additional fees to bump up their profit percentage, or use deceptive practices to get you to pay money that you do not owe.  But there is a way to ensure that you are only paying debts that the collection agency is entitled to and that is by asking for debt validation.

There are several things that the debt collection agency can provide for debt validation.

Proof Of Debt – the debt collection agency can provide you with proof that the creditor has assigned or sold the debt that you owe to the creditor to the collection agency.  The debt collector would not be able to legally require you to pay the debt without this paperwork and any court would throw out the case without it.  If the debt collector refuses to provide proof of debt to you, it is a good indication that the collector has no legal right to collect the money for the debt.

Account Statements From Original Creditor – the debt collection agency can provide you with account statements from the company that the account was opened with or the debt was originally owed to in order to prove their right to collect the debt.  This will also ensure that excessive fees have not been added by the collection agency to the total amount that was owed to the original creditor.

Copy Of Original Signed Credit Card Or Loan Agreement – if the debt collection agency can provide you with a copy of the signed original agreement between you and the original creditor, then they have a legal right to collect the debt on behalf of the original creditor.  It does not matter whether the debt was assigned or sold.

If the company cannot or refuses to produce at least one of these documents for you to prove that they have a legal right to pursue you for collection of the debt, then you should not send them any money regardless of whatever threats they make.  Without at least one of these documents, their case for collection will never hold up in court and they know this, which is why they will make dire threats and lie to you about the consequences of your actions if you do not pay them the money.  Do not be fooled and do not pay any debt collector money without first having the debt validated.

There are many people across the nation that are deeply in debt and many of these individuals have had to deal with a debt collection agency at some point in the last several years.  The debt collection industry has repeated come under fire in recent years for aggressive debt collection practices and many individuals are aware that they can report aggressive collection agents and agencies to the Better Business Bureau to document the harassing actions.  What many individuals do not know is that the Federal Trade Commission of the United States Government has passed a Fair Debt Collection Practices Act that specifically details the rights of the individuals being contacted by the debt collection agency and lists the actions that debt collectors are not allowed to take.

1.  You Can Stop The Collector From Contacting You
Many individuals being contacted repeatedly by aggressive debt collection agents do not know that they can legally have the harassing phone calls stopped by submitting a request in writing that the collection agency stop contacting them.  Once the request has been received by the debt collection agency, they cannot contact you for any reason other than to tell you that your letter has been received and they will no longer contact you.  Stopping the collection agency from contacting you does not erase the debt that is owed and the collection agency may decide to sue you in court to recoup the funds that they are owed.

2.  Collection Agencies Are Not Allowed To Contact Debtors After 9pm Or Before 8am.
The hours in which the debt collection agency is allowed to contact you are explicitly spelled out in the Fair Debt Collection Practices Act.  Debt collection agencies must adhere to these time constraints unless they receive permission from you to contact you outside of these times.

3.  Debt Collectors Must Send You A Written Notice Describing The Debt.
If a debt collection agent contacts you to tell you that you owe money to the company, within five days of the initial contact, the debt collector must send a written notice describing the debt, listing the amount owed, and disclosing the steps that can be taken by the debtor if they believe that they do not owe the debt. 

4.  Many Aggressive Debt Collection Practices Are Prohibited.
Debt collection agencies and their agents are expressly prohibited from the following:
- Using obscene or profane language when talking to the debtor
- Threatening violence or harm
- Misrepresent who they are by claiming to be an attorney, from the credit bureau, etc.
- State that you will be arrested for not paying the debt
- Collect any amount greater than the debt owed
- Misrepresenting documents sent to you as legal documents when they are not
- Publish the names of individuals that they are attempting to collect a debt from

5. Debt Collectors Cannot Repeatedly Contact You At Work If Your Manager Disapproves.
The actions of the debt collection agency are not allowed to interfere with your employment and this includes calling you at work when your boss disapproves of the contact.  If collection agency repeatedly contacts you at work knowing that it could affect your employment, they could face sanctions from the Federal Trade Commission.

A more complete list and description of debtor’s rights are listed in the Fair Debt Collection Practices Act released by the Federal Trade Commission.  If a consumer has experienced any of the prohibited or harassing tactics listed in the Fair Debt Collection Practices Act, they may report the debt collection agency to the Federal Trade Commission or to the Attorney General of their state for investigation.

One of the newest and more questionable practices used by collection agencies today are the use of Collection Triggers to attempt to collect on the debts that they hold.  Never heard of Collection Triggers?  Well, neither have the other thousands of individuals whose personal information is being sold by the credit reporting bureaus to collection agencies across the nation.

What Is “Collection Triggers”?

Sold under the name Collections Triggers by leading credit reporting agency Experian, this software program is designed to take the information about a collection agency’s list of collection accounts and monitor those accounts in Experian’s system for any activity on the account.  Once activity on the account has been detected, the collection agency is notified and any new contact information given to the credit reporting agency is then given to the collections agency.

This allows the collection agency to find you every time something is reported on your credit report as they now have your address, phone number, and the fact that you are paying an account or have opened a new account recently.  Regardless of whether the collection account that the agency has on you is valid or not, for as long as they wish they can access your personal information and can harass you for accounts that you may or may not owe.

Other Issues Arising

“So what?” you may say, “I don’t owe any creditors any money so this does not apply to me.”  Well, you couldn’t be more wrong.  The technology used to create Collection Triggers is already being modified to be applied to other industries. 

For example, if an individual begins the procedure to obtain a mortgage and their credit is pulled to determine whether or not they can afford the mortgage, the credit reporting agency is alerted that you are shopping for a mortgage.  The credit reporting agency then sells your information to competitors of the mortgage company you applied with so that they know that a potential customer is looking for a mortgage.  The result is that the consumer is swamped with phone calls, solicitations, and mailings that offer alternates to the mortgage company that they initially chose.

For some individuals, this competition would be welcome but many others are alarmed that their personal information would be sold to companies without their consent.  There are no conditions put into place to ensure that only reputable companies are able to obtain consumers personal information and the threat of identity theft or being signed up for programs that you did not agree to is high. 

When a company misuses a consumer’s information, which can cost the consumer a great deal of money, the burden of proving that the information was misused is on the consumer.  Even if the consumer wins their case, they still may be on the hook for hundred of dollars in charges, have negative information reported on their credit report, and there is no guarantee that the issue will not occur again if their information is sold to another company.  There is currently no way for a consumer to opt out of the system and in reality, your information has probably already been sold to any company that was willing to pay for it.

When it comes to dealing with some parts of the debt collection industry (the mortgages section is a bit of an exception), it can often be much more akin to dealing with a scummy neighbor rather than an actual professional business. A portion of the debt collection industry will do whatever they can, regardless of how immoral it may be, to get the money they think they are owed. They will call children when their parents aren’t home and tell the children that their parents will go to jail if they don’t pay their debts. They will call several times a day and disrupt your life as much as possible. They’ll call your neighbors and tell them that you’re a deadbeat. They’ll even try to get your family members to pay on the debt. This industry is out of control. Some debt collection agencies are now trying to collect upon debts that are past the statute of limitations and breaking the law to do so, fortunately you can fight back.According to federal law, you have no legal obligation to pay any debt that has had no activity in the last 7 years. If you had some bad credit card debt in college a decade, you legally don’t have to pay it. There’s still a moral obligation to be a good citizen and make good for the debt that you have, but you’re not bound to pay it according to the law.
If you borrowed money in January of 2001, it’s very likely that in December of 2007, just before the statute of limitations expires on your debt, you’ll start receiving calls from debt collection agencies trying to get money out of you. It’s very likely that they illegally changed the date on the debt. They will claim hat there is some sort of activity on your account making it active again, resetting that 7 year expiration clock and continue to try to collect the debt even though the statute of limitation on collecting that debt has expired.

Collection agencies are increasingly changing the date on debts, even though no activity has occurred. According to the Federal Fair Debt Collection Practices Act, this practice is illegal. If a debt collection agency does this to you, you can sue them in small claims court at your local courthouse, and they’ll have to come and defend themselves. You’ll likely be able to get that debt removed from your credit report once and for all and potentially receive some sort of punitive damages.

If a debt collector tries to collect a debt that’s past the statute of limitations, you have no obligation to pay it. They will probably illegally change the date of the debt and try to collect it, but you don’t legally have to pay it, and you can fight back.