Collection companies can be ruthless. While many follow the rules regarding fair collection practices, others do what they can to push the line, and some even commit fraud. Debt parking, for example, is when questionable or bogus debts are added to one’s credit report. The collection agency responsible will do this without contacting the consumer to collect before filing the report, so it generally comes as a surprise when checking one’s credit report.
Recently, the Federal Trade Commission filed legal claims against a in another state who successfully collected over $24 million by debt parking. The consumers affected by the scheme paid up because they didn’t want the debt to ruin their chances of obtaining loans, mortgages, other lines of credit or, in some cases, jobs. Ultimately, the owners of Midwest Recovery denied any wrong-doing but settled their case with the FTC. Unfortunately, thanks to the terms of the settlement, the consumers taken advantage of may not see their money returned to them.
When feeling pressured to make payments, one may not take the time to have the debt validated. If something shows up on a person’s credit report that he or she is not familiar with, he or she has the right to contact the collection agency or lender to have them prove the debt is valid. If validation is unsuccessful, but the company refuses to remove it from one’s credit report, it is possible to dispute the debt — which is something that should be done in writing. While challenging the debt can take time, it is worth it in the long run so that one does not end up paying on a debt that is not truly theirs. Regarding the case against Midwest Recovery, it was found that 97% of the debts placed on the victims’ credit reports were either invalid or inaccurate.
Debt parking is just one of the many illegal debt collection practices that hurt numerous Tennessee residents every year. Thankfully, dealing with relentless debt collectors is not something one has to do alone. There are things that legal counsel may be able to help a person do to stop creditor harassment and hold those accountable responsible for their actions. For consumers who do find themselves drowning in debt, further assistance seeking relief is available.