Can You Counter Sue A Debt Collector

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Anyone intending to challenge a debt that has gone into collections, even one with as strong a case as Gibraltar, needs to know what they are up against.

Can You Counter Sue A Debt Collector

Debt collection in the US is so big that only the absurd description can do it justice. Simply put, it’s huge. 7,000 collection agencies with a market value of $18.8 billion collect approximately $13.4 billion annually.

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The seas of collections are frothy. The Consumer Financial Protection Bureau (CFPB) received 70,348 complaints about debt collectors in 2021. That number has grown steadily each year over the past decade and is far from the industry leading complaints received by the bureau. collection of accounts.

These numbers will not shock anyone who has had a lot of debt in their accounts. Knowing that debt collectors can be both ever-present and relentless, they may be tempted to ask: what else is new?

A recent rule change issued by the CFPB provides guidelines for debt collectors trying to contact you by email. via mail, text message and are ready. – social media. Yes, that request to connect on Facebook, Twitter or Instagram could be from someone intent on collecting a debt.

What to do with all this pressure? First, don’t hide, especially if you have a legitimate beef. Credit tracking agencies are far from perfect. More than half of the complaints filed with the CFPB in 2021 and 2020 came from consumers who claimed they were contacted about debt they didn’t own, a 25% increase over the previous two years.

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To stop collection calls, answer the phone and follow the steps of Washington, D.C.-based attorney Ira Reingold, a debt collection war veteran as executive director of the National Association of Consumer Advocates (NACA).

“Take it and tell the person on the other end of the line. Stop calling me.” Rheingold says: “But before you hang up, get their name and address, then sit down and write a letter so they don’t call you. Send it certified mail, return receipt requested, so you have a record of it if it goes ahead.

“Most of the complaints are from consumers who are being hounded for a debt they don’t have,” said Reingold, who appeared on CSPAN for an hour to discuss issues with debt collectors. “In many cases, the wrong person is being prosecuted or even sued for the wrong amount of debt, and collection agencies are using very limited information to bring these cases.”

Debt collectors rely on a variety of information sources in their collection efforts. In order to successfully dispute their claim(s), the consumer must be methodical and thorough.

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“The first step,” says Michael Cummins, CFO of InsuranceGeek, “is to gather all the information and evidence you have about the debt. This includes any letters or documents you have received from the creditor, as well as proof that the debt is not yours. If you have witnesses who can testify that you have no debt, you should also collect their testimonies.”

Taking these steps will begin the process of resolving the erroneous claim against you. But there is more to do.

If you suspect that you owe a debt or that the amount owed is inaccurate, your best course of action is to send a debt dispute letter to a collection agency asking that the debt be validated.

“An effective debt dispute letter should be clear and concise,” said Daniel Chan, chief technology officer at Marketplace Fairness. “It should include all relevant information about the debt.”

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A debt dispute letter requires the collection agency to show that you really owe the debt and can provide detailed information and documentation to prove the amount owed.

Federal law says that after receiving a written debt notice, consumers have 30 days to respond to a debt dispute by letter. The Consumer Financial Protection Bureau’s 2021 Debt Collection Rule made it easier for you by requiring all debt collectors to provide a tear-off form that you can use to dispute the debt instead of writing a letter.

That form will be part of the validation notice that debt collectors are required to send you, which also includes:

If you don’t dispute the debt within 30 days, the debt collector considers the debt valid. If you dispute it, the collector must stop contacting you until they provide you with a debt verification.

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If you are writing a letter, instead of using the tear-off form, the debt dispute letter should include your personally identifiable information. checking the amount of debt; the name of the creditor for the debt. and request that the debt not be reported to the credit reporting agencies until the problem is resolved or it is removed from the report if it has already been reported.

A second dispute letter should be sent with the same information to the credit reporting agencies so they are also aware that the debt is disputed.

Often, however, the issue is not resolved until the information has already appeared on your credit report and thus becomes a negative factor on your credit score. If it appears on your credit report, another form of dispute letter must be sent to the credit reporting agency disputing the accuracy of the information and asking that it be removed or corrected. All three credit reporting bureaus have online dispute mechanisms available when you receive copies of your credit report.

If the debt is legally yours, knowing who to pay can be confusing. A debt collection agency? Original creditor. Debt that has been assigned to debt often changes hands, sometimes more than once.

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There are essentially three scenarios when it comes to paying charges, and the consumer can be confused about who is being dealt with and who is being paid.

A creditor may have an in-house collection department. In this case, you still owe the original creditor and that’s what gets paid.

Sometimes the creditor hires a collection agency to chase the money. Ask the debt collector if they own the debt. If not, you can still negotiate with the original creditor.

Often the last straw, the original creditor may sell the debt to a collection agency. In this case, the debt collector owns the debt, so any payments are made to the collection agency. (This amount is also negotiable).

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Problems between consumers and debt collection agencies have been around for quite some time. In 1977, Congress enacted the FDCPA in an attempt to protect consumers from abusive collection practices.

“[The FDCPA] requires credit bureaus to repair or delete any information that cannot be verified, is incorrect, or is incomplete within 30 days,” said Edward Mellett, founder of London-based WikiJob. “Otherwise they have broken the law and you have the right to sue and file a complaint with the Consumer Financial Protection Bureau.

“Make sure you build a case that is so compelling that the creditor will either agree with you or provide real evidence to the contrary.”

Despite all these restrictions and protections, the CFPB and state attorneys general receive thousands of complaints from consumers each month about debt collection practices. Be aware, consumer complaints often arise because collection agencies fail to accurately follow the details of the original contract from start to finish.

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Debt collectors often target senior citizens, so many of these regulations are aimed at protecting the elderly. Learn more about debt collection laws for seniors.

Sometimes it’s important to restate the obvious. job #1 is to check for debt. In addition to the validation notice that debt collectors must send, there is a statute of limitations on most debts. The statute of limitations varies from state to state, from three years to 15 years.

If the statute of limitations has passed on your debt, it means that the collection agency cannot obtain a court judgment against you. That doesn’t mean they can’t still try to collect, although if you refuse to pay, they have no legal recourse. However, unpaid debt remains on your credit report for seven years from the time you last made a payment on it.

Many of the problems begin with the fact that debt collection agencies often buy debts from multiple sources and either collect the money or sell the debt a second, third, maybe even fourth time. Along the way, the original contract is lost, and with it the details of how much was originally borrowed, at what interest rate, what late payment penalties were incurred and how much is still owed.

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Consumers should keep accurate records of all transactions related to their debt, especially the original contract, payments and any access. That information is used when submitting a dispute letter to a collection agency.

It’s still unclear whether the validation process is working, so there may still be issues with information on your credit reports. Your due every time