Receiving a telephone call from a debt collector is not a pleasant experience. Being hounded by someone attempting to collect a debt you do not owe is fraud. I have written many times in the past about scammers who use deceptive and abusive collections practices in attempting to collect non-existent debts. These scammers violate the Fair Debt Collection Practices Act by making threatening and verbally abusive phone calls, contacting third parties about the phony debts, threatening legal action and attempting to collect debts that the scammers knew were not owed. Last year, the Federal Trade Commission (FTC) initiated Operation Corrupt Collector, a joint action by the FTC and state authorities to shut down illegal debt collectors. In the Scam of the day for October 17, 2020 I told you that the FTC obtained a Temporary Restraining Order shutting down Critical Resolution Mediation LLC’s illegal debt collection operation while legal action continued against it. According to the FTC, Critical Resolution Mediation LLC’s employees threatened consumers with arrest, wage garnishment, revocation of drivers’ licenses and lower credit scores if they did not pay debts claimed by Critical Resolution Mediation that in many instances were never ever owed, so-called phantom debts. The FTC also alleged that Critical Resolution LLC illegally contacted consumers at their workplace and illegally notified family members about the phony debts. Now the FTC and Critical Resolution Mediation settled the legal action. Pursuant to the settlement, Critical Resolution Mediation is permanently banned from the debt collection industry and must pay a fine.
Subject to strict federal laws, legitimate debt collectors are permitted to call debtors, however, the law prohibits them from threatening imprisonment for the failure to pay a debt and attempting to collect a debt that the debt collector knows is bogus. It can be difficult to know when someone calls attempting to collect a debt if indeed they are legitimate or not, so your best course of action if you receive such a call is to not discuss the debt with the person calling, but instead demand that they send you a written “validation notice” by regular mail which describes the debt they allege you owe and includes a listing of your rights under the Federal Fair Debt Collection Practices Act. In this case, Critical Resolution Mediation never supplied the validation notices as required by the Fair Debt Collection Practices Act. Never give personal information over the phone to anyone who calls you attempting to collect a debt. You can never be sure who they are. You also can check your credit report at each of the three credit reporting agencies, Equifax, Experian and TransUnion to see if any debts which you are not aware of appear on your credit reports. If you receive the validation notice and it appears to be legitimate, you may be better off contacting your creditor directly because the person who called you may not be representing the creditor, but may merely have information about the debt.
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