Monday, September 5, 2011

Removing Collections That Aren't Yours From Your Credit Report

Removing Collection Accounts That Aren't Yours From Your Credit Report

Removing collections from your credit report that aren't yours is a little trickier than deleting old collection accounts. Many, many, many people claim that collection agency debts aren't theirs when, in fact, they are. Disputing a collection as "not mine" is the number one dispute the credit bureaus see, so don't expect to get very far there. Your goal is to convince the collection agency to delete the tradeline of its own volition.

The first thing you do is to write a letter to the company requesting the name and address of the original creditor for the account. You need that information before you begin.

Step One: Sending a Validation Request
This is nothing more than a formality. The collection agency cannot validate an account that isn't valid – but they will. Send a letter to the company, CRRR, requesting that it validate the account. Do not include any other information with your letter, such as "this account is not mine" etc. The collection agency will send you a printout containing the same basic information about the account that you see on your credit report. With any luck, some of that information is incorrect. You want this in writing. It will come in handy later.

Step Two: Calling the Collection Agency
Surprised? You should be. I'm normally the first birdie to sing a warning against ever calling a collection agency. In this case, however, it can really work to your benefit. So lets face the beast head-on, shall we?

When you call the collection agency, you'll have to go through an automated system to reach a collector. When the system asks you for personal information such as your Social Security number, just sit there. The system will not disconnect you. This isn't the same as calling the credit card company that really doesn't want to talk to you anyway and will disconnect you at the first opportunity. Collectors want to get you on the phone, and if the debt isn't yours, you don't want to give them any more information than they already have.

When you finally get a human being on the line, be polite. Explain your situation honestly, making sure to set yourself apart from the pack as much as possible. I recommend the following introduction:

"Hi, my name is ________. I noticed a tradeline on my credit report recently from your company requesting payment in the amount of _______. The account number for this account is _______. Would you like me to wait while you pull that up in your system?" 

This shows both professionalism and kindness. You're demonstrating those aspects first because you want them returned. It's a heck of a lot harder for a debt collector to start yelling at you about what a deadbeat you are when you start out the conversation on such a civil note. Let's continue..

"I know everyone calls and says this and its probably become so common that it makes you want to scream, (short chuckle) but this debt rightfully belongs to someone else. The name/Social Security number/address/etc. on the tradeline isn't mine. I am willing to do whatever is necessary to help straighten out the situation, both to help myself and to help your company pursue the correct debtor." 

You say, "I know everyone says this" to demonstrate that you do know they hear it all the time. By pointing out that you are aware that everybody claims this but in your case its true, you set yourself apart as believable. You chuckle to mark the unpleasant humor of the situation and to add an element of humanity – humanity that you hope will be returned – to the conversation. You also note how helping you also benefits the company to give the collector additional incentive to help you.

The first thing the collector will ask for is your Social Security number. Here's how you respond:

Collector: Can I get your Social Security number please? 
You: I mean you no disrespect and I want to get this situation resolved as much as you do, but try and understand my paranoia here about giving out information that can be used against me. After all, any information I give you can be used in an effort to collect the debt – even if those collection efforts are aimed at the wrong individual. 

Your goal is to get the collector to tell you who to call to resolve the situation. A special number of a top supervisor, perhaps. The name and address of the person in charge would also be helpful. Any information you can glean from the collector that most debtors don't have access to will help you resolve the situation and stay out of court. Try saying this:

"My goal in calling you today is to get this situation resolved as quickly as painlessly as possible for both of us. Who do I need to talk to within your company to accomplish that?" 

If the collector won't help you, call back and try again. Your odds of getting the same representative are low. Sooner or later, someone will tell you who to talk to. Do not let your voice betray any shred of frustration or anger. Unlike most customer service representatives, debt collectors aren't trained to be nice at all costs. If you bite, the debt collector will bite back and any chances you had of getting the information you want will go up in smoke.

Once you get an address or e-mail address of someone in a high-ranking position within the company (get the addresses of more than one, if possible. You want to send this letter to as many people as you can) send out a letter asking for help. I'm going to provide you with a sample you can tailor to your own situation. The italics in the letter are for your own clarity. Don't include those

Dear Mr./Mrs. ___________

My name is ____________. I am writing to you today with a situation you've probably encountered 1000 times, with only one or two cases out of that thousand being legitimate. I am one such legitimate case. The debt your company claims I owe isn't mine.

I discovered this debt on my credit report with an incorrect name/Social Security number/etc. I requested the name and address of the original creditor for the account and I have never held an account with _______ or I currently hold an account with _________ but it is up to date. I recently requested validation of the account and received a response containing incorrect information. This benefits me, since it proves that your company is pursuing the wrong individual for this debt. I am writing to you rather than simply moving forward with a credit bureau dispute and litigation because I am hoping we can resolve this outside of court.

I am willing to comply with any requests your company has that will prove my innocence in regards to this debt. Please understand, prior to receiving the validation response, I was hesitant to do so because I know that some collection agencies will simply replace the incorrect information with my information in an effort to collect the debt, not caring that they are pursuing the wrong person. I no longer have that fear because the validation I have in writing from your company contains the incorrect data you currently have on file and protects me in the event that data changes. It also serves as proof that the person you're looking for isn't me. Thus, exonerating me is not only beneficial to me, its also beneficial to your company since it frees you to pursue someone who will pay this debt.

Please contact me at (email address) so that we can discuss this matter further. 

Your Name

I know how crazy this may sound to the die hard "Dispute-till-you-drop" camp, but I learned the hard way that collection agencies aren't all fire and brimstone. Higher-ups within the company don't depend on commission to pay their bills, and they're more likely to help you out of sheer human compassion. Given that few people anticipate this from collection agents, the trick works more than you'd think.

Once upon a time I had a client whose boyfriend had a collection debt on his credit report that was actually his nephew's debt. The two shared the same name and, being ignorant of the way the system normally works, he called the collection agency himself, explained the situation and asked for help. He got it. The collection agent who answered the phone directed him to another employee at the company who was willing to straighten out his file. In the end, my services weren't necessary and I was delighted by my client's boyfriend's success.

The point being, you might just get the help you're looking for if you ask for it.

If the Collection Agency is No Help Removing An Account That Isn't Yours

Just because the collection agency might help you, that doesn't mean its a certainty. Whether you're dealing with a genuine collection agency or a junk debt buyer makes a significant difference in whether or not you can get the negative report removed from your credit report with a few well-placed telephone calls and letters. Its much tougher to get a junk debt buyer to take you seriously because, if the account is old enough to have been sold to a junk debt buyer, then the debt collectors assume if the debt genuinely wasn't yours you would have already taken care of the problem. In addition, junk debt buyers have a lower successful collection rate that mainstream collectors because the debts they purchase are so much older. This makes them more gung-ho to collect from you, regardless of whether or not you can prove you legitimately don't owe the debt.

Time to play hardball.

Sending An Intent to Sue Letter to the Collection Agency

Remember when I mentioned that collection agencies don't want to go to court? Its normally not worth their time or the money it would cost to defend themselves from consumers – especially when they aren't certain just what evidence a consumer has against them until after the discovery period.

Step Three: Sending an Intent to Sue Letter to the Collection Agency
If that collection account on your credit report isn't yours, notify the collection agency of that fact via an intent-to-sue letter. Let the collection agency know, in no uncertain terms, that the entry is incorrect and thus in violation of the FCRA because you never owed the original debt. Don't provide the company with copies of any evidence you have against them. Don't provide anything. You don't want to inadvertently give collectors legal ammunition that can be manipulated and later used against you in court. Just write the letter and point out the following:

  1. The account isn't yours and was placed on your credit file by mistake. 
  2. You never had an account with the original creditor and you can prove it.
  3. You can prove that the entry on your credit report contains information that indicates the debt is owed by someone other than you.
  4. Reporting incorrect information to the credit bureaus is illegal.
  5. You have the right to sue under the FCRA and you intend to do so unless the entry is immediately removed from your credit report. 

And then you wait. With any luck, one intent to sue letter will be enough to convince the collection agency that you mean business and it will delete its negative entry from your credit report.

If the Collection Agency Doesn't Fix Your Credit Report

If threatening to sue the collection agency isn't enough to set a fire under them and get the entry deleted from your credit report, its time to dispute the entry with the credit bureaus. Unfortunately, this is little more than a formality. The credit bureaus validation process is little more than contacting the collection agency with a, "Hey guys, is this correct? It is? Okay thanks." But you'll need to prove in court that the collector violated the FCRA knowingly. That means notifying the collector that the information is incorrect before you contest it with the credit bureaus. When the collection agency validates the information as correct, that proves that the company violated the FCRA by knowingly validating an incorrect entry.

And there's always a chance that the entry will get removed. You just never know. Its worth a shot. When the  credit bureaus validate the collection that isn't yours on your credit report, its time to take the fight to the courts and sue the collection agency. You could also try the "one-two punch" but I'll write more on that later. For the time being, I'm exhausted and this post is long enough as it is. There's so much information to include. *sigh* Ah well, such is the purpose of a blog. Bit by bit, we'll get there.

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