A new problem with debt collectors has been emerging in recent years – debt collectors who pursue the wrong people in order to collect a debt owed by someone else. Some collectors even know that they are pursuing the wrong person, but are hoping the individual will cave and pay the debt because of the fear of a bad debt appearing on his or her credit report.
This story highlights the problem, which is sometimes called debt tagging. Debt tagging often occurs when the debt collector pursues the wrong individual, who happens to have the same name as the debtor. Recently, Credit Bureau Collection Services paid over $1 million to the FTC in order to settle charges that it violated federal law by reporting incorrect credit information and by pressuring individuals to pay debts they did not owe. In 2010 alone, the FTC reported almost 120,000 complaints about debt collectors.
Many errors with debt collectors occur when the debtors have changed phone numbers or moved. Frequently, debt collectors purchase bad debts for pennies on the dollar, and the original creditors don’t always give the buyers a lot of information about the debtors.
So what should you do if you are being pursued for a debt you don’t owe? First check your credit report to make sure there are no errors on the report. If there are, dispute the report with the credit reporting agency, and it should be corrected. If a debt collector is hounding you for a debt you don’t owe, write the collector a letter explaining that the collector is contacting the wrong person. If it doesn’t stop, consult an attorney.