SALT LAKE CITY (ABC 4 Utah) If you've been targeted by a debt collector for a debt you know nothing about --- or sued for an amount of money you never owed, there are ways you can fight back. You have legal rights as a consumer, both in Federal and state law. But you have to use those rights to defend yourself if a bogus debt collector comes after you.
Lester Perry is a Holladay-based trial lawyer who has fought a number of class action suits against abusive debt collection companies. He says, "Sometimes people will get a threatening telephone call or a legal looking letter about some old real or bogus debt they can't even remember. And they pay it!"
That doesn't surprise Perry. "People are afraid or they're intimidated or they've got way too much to do...they don't need this headache, so they pay just to get rid of it. And there are a lot of unscrupulous people who know that, and try to collect completely bogus debt."
Perry has good advice to keep yourself from being a victim.
First, look at the date of this alleged debt. How long ago did it happen? Utah, like every other state, has a statute of limitations on debt. If it's a written contract, the statute is six years. If it's a contract debt that's not in writing, the statute is four years. So whether the debt is real or bogus, it could be too old to be collected.
Second, be aware of debt collectors who offer to 'settle' for a very small amount. Yes, it sounds tempting to pay $80 to pay off an old, long expired $1,000 debt, but Perry advises, "Don't pay it." Paying even a small amount on an old debt revives the statute of limitations; thus starting it all over again. The debt collector can now not only sue you for the debt, but double or triple that original amount by adding new fees.
Suppose there's a knock on your door and when you open it, a process server hands you a summons for a lawsuit.
The papers can be deliberately confusing. There's a summons and complaint, but no real information except for the name of the debt collector. Your first impulse may be to dismiss it as ridiculous and throw the papers in the garbage. That's a mistake. A summons must always be taken seriously, even if it's filed by a bogus debt collector.
That's where the FDCPA (Fair Debt Collection Practices Act) comes in. It's a Federal Law. Utah has a similar law. One part states that a debtor must be sued in the county where they live, or where the debt originated. For example, suppose you live in Sandy and the alleged debt is owed to a vehicle mechanic in South Jordan. Both locations are in Salt Lake County. If the summons is to a court in say, Summit County, that violates the FDCPA, which means you can later sue the debt collector under the law.
However, suing in the wrong county won’t get the debt claim dismissed, according to Ron Ady, a Salt Lake City based consumer attorney. Ady says you must ‘answer’ the summons with a letter to the court stating why you don’t owe the money or the amount. It must be received within the deadline, which is usually 20 days from when you are first served.
But if you intend to represent yourself in this case, do the research. Contact the government agency 'Utah Courts Self Help Center.' They can supply information you need and help you find your way around debt collection laws.
Another problem to watch out for is 'Zombie debt.' This is when you get sued multiple times for the same debt. It happens when you pay your bill, or even settle with a debt collector, but your payment isn't properly recorded. So the debt doesn't die, but keeps coming back.
Kill the zombie by cutting it off at the head, at the beginning. Attorney Perry advises taking the following steps:
-KEEP GOOD RECORDS
-PAY BY CHECK
-INCLUDE A LETTER STATING THAT THIS PAYMENT SETTLES THE DEBT
-KEEP AN ACTUAL COPY OF THE LETTER AND THE CHECK ON FILE
Expert counsel say that debt collection is a huge and booming industry. Debts are packaged in large portfolios of hundreds of million of dollars, and sold to debt buyers for pennies on the dollar. Then the debt buyer becomes the collector, trying to collect the debt either via formal looking letters or with an actual lawsuit
On Friday, May 2nd we will share part three of our Good4Utah investigation. We examine legal methods businesses have discovered allowing them to skip around consumer protection laws, and force you to sign away your rights.
For additional help:
Utah Courts Self Help Center
www.loanmls.com (company buying/selling 'loans')