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Collection Agencies and your credit file
Collection Agencies are a major source of inaccurate information. The two
most common situations are:
A lack of communication between the agency and the
original creditor
Poor reporting and record keeping procedures.
Many of you have had a bill turned over to a collection agency. What happens
is the original creditor lists the item as a collection in your credit
file. After a short period of time your account may be transferred to a
collection agency who also lists the item as a collection in your credit
file. Accounts may be sold, or reassigned to another agency or reassigned
by the original creditor to a new agency. The problems is often that the
account is being listed several times on your report and even if you pay
the original creditor or the last agency to collect on the account, chances
are very high that the duplicated collections will remain on your record
for SEVEN years, unless you get it corrected.
Another Major headache has surfaced. Consumer Financial
Services corp. (CFS) specialized in buying VERY OLD out of statute credit
card collection accounts. CFS went out of business in the midst of scandal
and formal charges. The problem is that other collection agencies purchased
these accounts in bulk and started reporting them as new collections. Many
of them without proper notation of the original creditor, date of last
activity, etc. I personally know a person who worked for CFS prior to their
demise and they said that they believed CFS had some of the poorest records
and record keeping procedures and did not even know who the original creditor
was in many instances. I strongly suggest that you thoroughly investigate
any collection with CFS listed as the listing creditor or original creditor.
You may be the kind of person that ALWAYS pays every
bill on time, but your health insurance company does not. You may be surprised
at the amount of collection items in your file.
Laws applying to Collection
Agencies
Collection agencies and collectors must comply with
the Debt
Collection Practices Act, 15 USC § 1692, which strictly regulates debt
collector's actions in acquisition
of location information, communications
in connection with debt collection, harassment
or abuse, false
or misleading representations, unfair
practices, validation
of debts, multiple
debts, legal
actions by debt collectors, furnishing
certain deceptive forms. If you find yourself the target of debt collection
action, make sure that the collector is staying within the law, or they
can face civil
liability $$$ . Here is a recent example.
Here is a link to Bud Hibbs,
one of America's consumer credit experts.
you can use a letter like the sample letter if you
are contacted by a collection agency, attempting to collect a debt
which you do not owe. They cannot continue to collect, until they have
verified that the debt is actually valid, once you have sent them this
notice. You must send this letter, as all the others, registered mail,
and retain copies and all receipts as proof of mailing.
You can use a letter like the sample letter if you
are contacted by a collection agency, attempting to collect a debt which
you do not owe. They cannot continue to collect, until they have verified
that the debt is actually valid, once you have sent them this notice. You
must send this letter, as all the others, registered mail, and retain copies
and all receipts as proof of mailing.
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