Posted By Christina M on January 19, 2010

Learn something new every day.

What I learned today was interesting, all right. I learned a few things about credit, credit reporting, and collectors. Maybe I’m naive, but it really took me by surprise.

First, let me tell you, in case you do not know. There is a place to get free copies of your credit reports, and it is NOT the place that has the annoying pirate restaurant singer. No, it’s a right guaranteed by the government, through the FTC. Go to http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre34.shtm for more information, and to http://www.annualcreditreport.com to collect. You are entitled to see your credit report with each of the three reporting agencies for free once per year.

When I was looking at mine, I discovered that one thing didn’t fit. There is a section that is visible to you, but is not distributed with your credit report to inquirers. That part is where companies have checked your credit for the purpose of offering unsolicited credit offers. You know, the letters from banks that tell you how you’re pre-qualified. On that list was a collection agency. It had a notation next to it specifically indicating that their purpose was to offer unsolicited credit. Yes, this was one of the companies that last year claimed to be trying to collect a debt, a debt we did not owe.  Furthermore, my report stated that I did not have any accounts with any collection agencies.

What does all this mean? A collection agency lied about their purpose in looking at my credit report, so that they could get information on me to pretend I owed them money. They had not even purchased an account — they were making it up!

Just because someone says they are from a collection agency and that you owe them money, that doesn’t necessarily mean it is true. They can easily obtain information about some debt you owe and pretend to have bought it. If you pay them, you are out the money, and you still owe the money to the real owner of the debt.

What does this mean to you? Three things. First, check your credit report annually. Know the state of your affairs. Second, NEVER pay by phone, especially to a collection agent.  Third, before making any payment, obtain proof in writing of the debt. They may bully, yell, refuse you information, and even call you names. Do NOT pay them to get them off your back. The more they bully, the more likely it is that they are fraudulent.

If you genuinely owe money, it is right to pay it. You should pay it… but make sure that you are paying it to the person you really owe it to, and do not give them the power to take more than you are giving. Don’t ever let them access your checking account, for instance. (Even genuine credit companies are known sometimes to double dip, collecting more than one payment with one authorization.  I lost hundreds of dollars in fees when my mortgage company took two payments instead of one a few years ago. Lesson learned.)

Please, learn from my mistakes. Never pay by phone, and always get everything in writing. Anyone can start up a collection agency and claim you owe them money. Save your money for those you really owe.

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