Halloween has passed but zombies linger

There is an actual term for debt that has come back from the dead to haunt you. Zombie debt (also known as ghost debt) is a dormant debt that is resurrected by debt collectors and is designed to get you to pay for something you may no longer owe. Or it could be something you never owed at all because you have a similar name as the actual debt holder.

As creditors remove old debt from their books, they sell it to third-party debt collections for pennies on the dollar. The debts that are sold are often resold and the information can become confusing and/or incomplete, which leads collectors to believe they have a right to seek payment on an otherwise uncollectable debt.

For the zombie debt collectors who purchase this debt there’s money to be made but only if they can get the debtor to pay. This can lead the debt collector to use intimidating and scare tactics on unsuspecting consumers.

Companies that buy zombie debt go after debtors to get them to pay up but often times the debt is past the statute of limitations so it is uncollectable. Statute of limitations varies from state to state, but in Idaho the limit is four years. Which means that if you haven’t made a payment in more than four years, you can’t be sued for payment and you no longer owe the debt.

But here’s the catch, even making a single payment on an old debt even if it’s just a few bucks to get the collector to stop hounding you can bring it back from the dead. Any payment of principal or interest is equivalent to a new promise to pay the debt. Unfortunately, this recently happened to a consumer. To get the collection agency to stop harassing him he made a small payment, thereby resetting the clock on the statute of limitations. While there isn’t much we can do to help him, we thought our readers could learn from his experience.

Common sources of zombie debt can be debts you forgot about, debts you settled with a creditor, fraudulent charges from identity theft, debts wiped out in bankruptcy and debts beyond the statute of limitations.

What do you do if you are hounded by a collector for a past debt?

The Fair Debt Collections Practices Act (FDCPA) governs debt collectors. Become familiar with your rights under the FDCPA. Here’s the link: https://bit.ly/18HRnCG

Dig through your old records for receipts and bank statements to get information on this debt. It’s possible you paid it off and owe nothing. Dates can also help you form a defense if the debt is old and past the statute of limitations. Until you learn more about the debt DON’T agree to pay even a $10 payment to get the phone calls to stop.

Request a debt validation letter. This shows what information the debt collector has on the debt. You will learn details of the original creditor, the amount of the debt and how you can challenge it.

Once you’ve determined the origin of the debt, you can decide how best to act. If it’s not your debt, write a letter to the collection agency challenging the debt within 30 days of first contact. If the debt has been paid, write a letter to the collections agency demanding it cease contact. Under the FDCPA rules they must do so. There are two exceptions, they can notify you that they are ending the collection efforts or they intend to sue you.

Determine if the debt is past the statute of limitations. If so, you cannot be sued for this old debt. If this is the case, send a letter to the collector requesting that they cease all communication with you.

Finally, if you find you do owe the debt, make sure all agreements are in writing before sending any money.

Don’t be intimidated by zombie debt collectors. Know your rights so you can protect them.

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UPSELL BAIT AVOIDED: A savvy consumer recently called, concerned that a garage door company from Spokane Valley might be trying to take advantage of him. The problem seemed simple, a broken garage door spring. A technician examined the spring and gave an estimate of $750 for repair. While on site, the technician suggested a new garage door opener (since he just happened to be there) and upgrading to more expensive springs that would last forever. Luckily the technician did not have the parts with him and was to return the next day; however, the consumer started to feel uncomfortable about the upsell of the springs and opener, which made him wonder about the repair price.

He contacted us and we suggested he get a second opinion as the upselling was concerning. He called a local company, Garage Door Services, for a second opinion and was delighted to find out that he only needed the spring replaced and at a cost of $275. The moral to this story is to listen to your gut and when in doubt, get a second opinion.

While upselling an unsuspecting customer is not illegal, we would argue that it is not ethical and probably not a company you want to do business with. Unfortunately, we are seeing this happen more and more. In this case, it paid to listen to your gut and to shop around.

The other lesson the consumer learned is to not rely solely on Google reviews, as the first garage door company had numerous positive reviews and came up first on his Google search. Relying on internet reviews may be a good starting point, but keep your guard up and keep an open mind about what you’re being told.

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Contact Terri: terridickersonadvocate@gmail.com

Contact Bill: billbrooksadvocate@gmail.com