Often consumers get calls from debt collectors or collection agencies stating that they owe a sum for a past due bill such as a credit card, medical bill, or other type of debt. In many cases, because of the strong stance taken over the phone by the debt collector, consumers panic and send them payment without knowing whether this company truly owns the account and legally can collect on it.
Think about it. Couldn’t anyone who simply knows about an overdue account call people and collect money if they are not forced to validate and verify information about the account and legally collect on it?
Within five days of their initial communication, debt collectors are generally required to send debt validation notices to alert consumers about their right to request proof that a debt is valid or dispute the debt. In other words, they must first, prove they own the account or otherwise can collect on it. And, they must inform the consumer of their right to dispute the debt.
The Consumer Financial Protection Bureau (CFPB) has found that Syndicated Office Systems, LLC, which does business as Central Financial Control, failed to send debt validation notices to more than 10,000 consumers. During this time, the company continued to collect over $2 million from consumers who did not receive the notices. These notices can be an especially important consumer safeguard with regard to medical debt, where issues like insurance reimbursements and medical billing processes are commonly fraught with complexity, confusion, and delay, and can lead to consumers being unsure of how much to pay or even whom to pay. More than 43 million Americans have medical debt adversely affecting their credit reports, and more than half of all overdue debt on consumer credit reports is from medical debt.
Consumers, when contacted by debt collectors, can request validation of the debt. If they do not receive validation in the mail they should not send any payment.
There are companies that call consumers and try to collect money on debt that they do not have the legal right to collect on. Some consumers have made payment to these fraudulent debt collectors and have not received credit and thus lost their money.
For further assistance visit www.ERACreditServices.com