The Washington Post recently ran a terrific article on a debt collection practice called “debt tagging,” whereby debt collection agencies try to collect debts from consumers who may have the same name as someone who owes money, but who do not owe the money. Debt collection agencies often go several steps further, by tarnishing the credit reports of consumers who do not owe the debt in question. The Post mentions the $1 million Federal Trade Commission settlement with Credit Bureau Collection Services (CBCS) for debt tagging.
At the root of the problem is the debt buying industry, which purchases blocks of debt but which often gets little information about the consumer who owes money. So, for example, you might have been assigned a phone number that was once owned by someone who owed money, or you may have moved into an apartment once rented by someone with an outstanding debt. As a result, you may get collection calls or collection notices that simply don’t belong to you. All too often, the debt buyer hounds the consumer into paying, or dings his or her credit report.
The takeaway? First, demand validation of the debt. Second, check your credit report and dispute any debt that is not yours. Third, contact a fair debt attorney to assert your rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.
