What Do I Do When a Collection Company Has My Name Associated With a Debt That Is Not Mine?
- To help protect consumers from being held responsible for debts they do not owe, the Fair Debt Collection Practices Act provides each individual with the right to demand that a debt collection agency validate its claims. You can take advantage of your right to debt validation by notifying the collection agency, in writing, that the debt in question is not yours and requesting that the company provide proof that you owe the debt. Until the collection agency validates your debt, it cannot proceed with any collection activity against you. Collection activity includes sending letters, making telephone calls and filing lawsuits.
- While not all collection agencies immediately report consumer debts to the credit bureaus, some do. A collection account on your credit report will lower your credit score and make qualifying for new credit and loans more challenging. The Fair Credit Reporting Act allows you to dispute information you know or suspect to be false directly with the credit bureaus. If, after a 30-day investigation, the credit bureaus determine your claim is valid, they will remove the collection account from your credit history.
- If a collection agency placed a debt in your name, but you know you do not owe the debt, this signifies that the company lacks the information necessary to hold the correct consumer responsible for payment. Any information you provide to debt collectors will be used to further the company's collection efforts against you---whether or not you are actually responsible for the debt in question. In addition, a collection agency will use personal information, such as your Social Security number, to validate your debt both to you and to the credit bureaus. Thus, its is imperative that you not provide a debt collector with any personal information about yourself.
- If the collection agency validates the debt to you and to the credit bureaus when you do not owe the debt, both the FCRA and the FDCPA give you the right to file a lawsuit against the company in state or federal court. By validating a debt you do not owe, the company violates your consumer rights. You must file your lawsuit within one year and can seek up to $1,000 in damages for each violation.