The recession is keeping debt collectors busy, but debt collection scams are growing and are placing innocent consumers in a tough spot.  Being able to identify and avoid debt collection scams may be critical to preserving your credit rating.

Debt collectors may try to force the consumer to pay very old debts. Debt collection scam artists don’t want you to know this, but debts expire. Expired debt – debt which no one – not even the original creditor – possesses the right to collect can be “resurrected” by an unscrupulous debt collector that is using old account information purchased from the original creditor.

The right to collect debts varies by state, but it’s limit to somewhere between 3 and 15 years. Even if the debt collector has the right information about a debt, paying expired debt is a major mistake because it can allow the debt collector to re-report this defunct debt to the credit bureaus, allowing it to affect your credit for another seven years!

This “zombie debt” is legally uncollectable by anyone, yet the debt collector may approach a debtor for payment of expired debt.  The debt collection agency may apply high-pressure tactics to force the debtor to pay old debts.

The federal Fair Debt Collection Practices Act places restrictions on how debt collectors may operate; what they can say; when and where they can call you; and how they can communicate with you. So how do you handle pushy debt collectors?

Always verify that a debt is legitimate. Ask the collector to submit proof of the debt to you in writing. Here’s the catch: the proof of debt must come from the original creditor.  The original debtor must provide the date(s) the debt was incurred; the amount owed; and written acknowledgment that the debt collector is authorized to collect the debt.  If the debt collector is running a scam, they know that the original creditor won’t vouch for their debt collection right.

At the same time, directly contact the company the debt collector is supposedly representing to verify the status of your account. If the original creditor says the account was closed and you owe nothing, have them send you a written statement to that effect.

Send the debt collector a letter via certified mail stating that you do not owe the debt. State that they may not contact you by phone to attempt collections, and they may not report the false/expired debt to a credit bureau. If the collector continues to contact you, log all calls they place, noting time and date of call; the name of the caller or any messages they left.

File a complaint with the Federal Trade Commission. The FTC does not pursue individual complaints, but they track complaint volumes about particular agencies and scams. The FTC can take action against a business for its business practices, and the more information they have about a scam artist, the easier it is for them to enforce the law.

Report the scam to your state Attorney General, and the Attorney General in the state in which the collection agency is located. Provide specific information about the company’s contacts with you, including dates, times, numbers of calls, and any abusive behavior on the part of the collector. Also provide information about the debt they are attempting to collect.

Get even more news and tips about scams and other business information at planet antares solutions.