4 Steps to Follow If a Debt Collection Agency Scam Is Happening to You
A couple of months ago my parents got a letter from Debt Recovery Solutions, LLC, stating that I owed the company a $131.98 payment on a Verizon Account I had in New York. My first thought was, “Is a debt collection agency scam?!” I was suspicious because a few strange things popped out at me from the start; I hadn’t lived in New York for a couple of years, the letter was sent to my parent’s address, and, I always pay my bills. I wasn’t completely convinced that it was a scam, though, because I did have difficulty closing my account with Verizon when I moved to a different country.
When I did a search for the company a legitimate looking website popped up, and it had a strong rating with the Better Business Bureau. Had there been a mistake? Was one of my bills left unpaid? I had to do some investigating.
A quick google search led me to plenty of horror stories about Debt Recovery Solutions. If a debt collection agency puts a mark on your account, it can negatively affect your credit making it difficult make big purchases such as a house or car. Luckily, it’s easy to protect yourself in these types of situations. Here is a guide for what to look out for, and how to battle debt collection agency scammers.
1. Don’t pay anything before doing your research.
This was my first lucky break. If my finances were a little stronger, I wouldn’t have thought twice about paying this bill. The dates worked out, and like I mentioned, there was a possibility that something was messed up when I cancelled my account and was out of the country. In fact, when I was living in Asia, my mother called to mention I hadn’t made my last payment. I took care of it right away, but thought that something might of been overlooked on Verizon’s end. I decided to call Verizon to find out if they knew anything about this account.
I later learned that people who did pay off their debts through Debt Recovery Solutions, where subject to years of harassment from agents belonging to that company. Even if you don’t keep a close eye on your finances, it’s important to not take these payment requests lightly.
2. DO NOT call the number provided on the letter.
You do not want to give debt collection agencies any more information than they already have. My experience wasn’t as bad as it could’ve been because it was really difficult for Debt Recovery Solutions to get a hold of me. When I got the letter, my first instinct was to call so they could help me look up my account to see if I actually owed this money. But that would’ve probably led to me accidentally giving them banking information or personal info that would’ve made it easier for them to harass me and mess with my credit score.
Again, I caught a lucky break because I’d moved four times and had three new phone numbers since I’d cancelled my account with Verizon (No, I am not running from the law. Yes, I am a psycho.) When I called Verizon, I spoke to two representatives: one told me that my account was sold to a debt collection agency and another told me that my account was wiped from the system — neither confirmed whether or not I owed debt. Even though this didn’t help me, I still suggest you call the company from which the “debt” was bought, NOT the debt collection agency.
This worried me because I thought if Verizon “sold” my information to a Debt Collection Agency, then I must’ve owed them payments. This is NOT TRUE, these collection agencies are consistently buying up old accounts for their own purposes.
3. Check your credit score and put an alert on your account.
As I read more about people who had their credit scores tampered with, I began to freak out. Having a bad credit score can affect more than just your ability to make big purchases, it can make it difficult to get a job, a place to live and more. If you are currently battling with a bad credit score there are plenty of ways to get back on track, but letting a debt collection agency have their way with you can be debilitating.
I instantly went on to Equifax to get my free credit score and was relieved to see no one from Debt Recovery Solutions had requested to access my account. Equifax offers individuals the opportunity to flag their account. By flagging your account, you can preemptively state that if a debt recovery agency puts any marks on your account Equifax will contact you with fraudulent activity. In retrospect, I realized that Debt Recovery Solutions didn’t have access to my credit information but, had I made the mistake of calling, they may have squeezed that information out of me.
4. Send a debt validation letter.
Once I saw that Debt Recovery Solutions had not yet reached my credit score, I could relax a little, but I still needed closure. I decided to send them a debt validation letter citing the Fair Debt Collection Practices Act. According to a standard debt validation letter, collection agents have 30 days to provide you with the following:
- What the alleged debt is for
- Explain and show how they calculated what they say you owe
- Provide you with copies of any papers that show you agreed to pay what they say you owe
- Provide a verification or copy of any judgment if applicable
- Identify the original creditor
- Prove the Statute of Limitations has not expired on this account
- Show you that they are licensed to collect in your state
- Provide you with their license numbers and Registered Agent
The letter also threatens legal action if they do not comply with the provisions stated in the letter. This letter is a great tool to use if you are being scammed. Although I should note, if you have, or suspect that you have, valid debt, this letter can actually harm your credit score in the long run. Make sure that you are confident you do not have outstanding debt.
To sum up…
Getting a debt collection letter is not only unpleasant, it’s downright scary. If you ever find yourself as the recipient of one of these nasty notes and you think it’s a scam, make sure you:
- Go back through your payment history and make sure you never got a past due bill.
- Do not contact the company, instead write them letters.
- Check your credit score and put an alert on your account.
- Write a debt validation letter if you’re sure the debt isn’t valid.
I am still not sure if Debt Recovery Solutions is a scam or not. According to the Better Business Bureau, their company has a solid score (which is hard to believe considering all the negative things I’d read online), and, as I mentioned earlier, their website seems to be legitimate. But according to chat forums I’ve read, the company seems to rip off a lot of people. If you’re contacted from this specific debt collection agency, I’d be distrustful.
Marina is a staff writer for MyBankTracker.com. She is an expert in college finances, consumer spending and banking.