Scavenger Debt Collectors




What is a “Scavenger Debt Collector?”  A scavenger debt collector is a debt collecting agency who purchases very old debt for pennies on the dollar and then tries to collect the entire balance of the original debt. They will use many tactics in trying to lure you into admitting that this is your debt and that you will begin to pay it.  They skirt very close to the line that is drawn in the Fair Debt Collection Act as to what they can and cannot do.

Some of the tactics that a “scavenger debt collector” will use include:

1.  They will often tell you that they are a “litigation firm” and they are prepared to sue you if you do not pay this “old” bill that you owe. More than likely, they are not really with a “litigation firm”.  They more than likely are not ready to sue.  Sometimes they are but more often they are not.   Question them a lot about this.  Ask them for an address, a telephone number, the attorney’s name.  Ask them if the company they are calling for is indeed a law office.  More importantly, don’t let them scare you.  ”Scavenger debt collectors” often work for a group of investors who have found out that this is a lucrative business and they will say just about anything to intimidate you.

2.  They will get you to talking about the old debt in the hopes that you slip up and admit that you owe the bill. This is a BIGGIE!!!  Never, never fall for this one!!! Admitting that you owe the old bill may start the statute of limitations running again on the bill.  Yes, there is a statute of limitations on collecting debt that is written off and deemed uncollectible.   Which brings me to my next point –

3.  They will tell you that there is no statute of limitations on an old uncollectible bill. Yes there is a statute of limitations on old bad debt.  Each state has one.  Here is the link to a website that details each state’s statute of limitations:  BCSAlliance. com.  This will take you right to their site that talks about each state’s statute of limitations on collection of an old debt.

Why am I writing on this?

Some may ask why I have decided to write on this subject.  After all, being frugal to me and my family is about paying off our debt, getting our credit report corrected, saving money, being prudent, and being very truthful about what got us into the credit mess that we are in.  This is a subject that would seem to go against all of that. Well, for the past month, we have had one of these “scavenger debt collectors” calling our house.  They are trying to my hubby to admit that he had a credit card from 1986.   You read that right – 1986–twenty-three years (23) ago.  This “scavenger” has called and said that it is his debt, that he owes it, that they are going to collect on it, and that there is nothing we can do about it.  They have not offered one bit of proof about this claim.  No copy of the bill.  No copy of the original debt and the social security number or address that was used to open the account.  Nothing.   They have also talked to me about this debt, which is a clear violation of the Federal Fair Debt Collection Act.

He doesn’t remember if he had this credit card and during the late 1980’s he claimed bankruptcy and if he did have this credit card debt it would have been included in that bankruptcy. I can’t say that he had the credit card because I wasn’t married to him then.  In fact, I didn’t even know him then.  And there is the possibility that if this is his bill, he had already paid this bill before he ever decided to file for bankruptcy .  He doesn’t have records and receipts from 23 years ago.  Who does?

So here we are in the endless cycle of having the telephone ring at all hours of the day. They either have unknown name/unknown number on the Caller ID or they have Name Not Provided with the telephone number listed.  After doing a Google on these numbers, it is for certain that it is this “scavenger debt collector” that is calling and letting it ring and ring and then hanging up if we answer.  The last time the unknown name/unknown number called they left a message on my answering machine detailing who they are and the telephone number to call.  So it is a pretty safe bet that the other unknown name/unknown number calls are from this same place.

What actions has my hubby decided to take in regard to this matter?

There are several actions that my hubby could take in this matter. He could just admit that this is his debt, but he can’t bring himself to do that because he cannot remember this debt.  It could very well be someone else’s debt. There are 25 other people in our state with the same name as his name.  Not one document has been given to him to show him that this is indeed his debt.

He could do nothing and hope it goes away. This is not a good thing to do because they will not go away.  They will keep on calling and if they do tire of their little game then they will just probably sell it to another “scavenger debt collector” that is more ruthless than they are.

He could hire an attorney to get him out of this. This is the most expensive way to do it.  It is the method that he is saving for last resort.

He could write them a letter and send it via Certified Mail, Return Receipt Requested. This is the option that he has chose to do.  Actually I wrote the letter.  In my former job, I was a legal assistant and had written letters like this before and took particular delight in doing so.  The letter is full of references to the Federal Fair Debt Collection Act and is three pages long.  An original will be mailed to these “scavengers” certified mail as well as one sent regular US Postal.  This way if they do not accept the certified and the second one sent via regular mail is not returned then they cannot say that they did not receive the Cease and Desist letter.

Please don’t get me wrong. My family does not like having any debt out there that may be considered a “bad debt”.  There is a principle at play in this debt.  To us, these “scavenger debt collectors” cannot just come into our lives and announce that this is indeed our debt and that we have to pay it without offering one bit of proof.

If you are in this same situation, please do your research. Find out what remedies you have to resolve this.  Talk to a professional who deals with this kind of matter.  Take up for yourself and do not let these “scavengers” bully you.

In the upcoming days, I will be posting the results of my research into the Fair Debt Collection Act.  If you are in the same situation as us or are just interested in what your rights are as a consumer in regards to debt collection and you do not want to miss this post, please sign up for my RSS or email updates.  It is a very important subject and one that every individual should know about.

Till next time,

JT Locke

The Frugal Housewife

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Comments

  1. Tess says:

    Very good advice! We have a business that is trying to collect on an old debt that was settled awhile back.

  2. Joanna says:

    Wow – great post! I had no idea about this information, and I’m really glad that you posted it!

  3. Irene says:

    wow–thanks for these tips. This is good advice I will hang onto for sure!

  4. Thank you for sharing this information.

  5. Flo says:

    I have had this happen to me and I fought back exactly the same way you did. Once the letter was received I never heard from them again. I think I have it happening again. I keep getting phone calls with a recorded message. I hang up on recordings. If they want to scam me they have to call live :) Also, the State of California Franchise Tax Board works this way. I was contacted by them and told I owe taxes from 20 years ago. They can’t provide me any records or details but because they are a government and I don’t have my records, I really can’t fight them. So the State of California works just like a scavenger debt collector.

  6. Barbara says:

    Great advice here. I have nominated you for an award. Come by here and see.

    http://goalforthegreen.com/2009/02/lets-have-some-more-lemonade/

  7. Rick Vaughn says:

    JT

    Your 100% right with this information. I’m myself a debt collector but for a reputable company (if you can believe that).

    What’s crazy about this is the amount of people that actually pay on these old debts. What some people don’t understand that when you admit owing the debt you can actually restart the statue of limitation which is what they are trying to get you to do.

    A Cease & Desist Letter should be sufficient to shut these guys up. Keep us updated!

  8. Hi Rick,

    Thanks for the comment. One of the attorneys I worked for actually was an attorney for the reputable debt collectors and then another that I worked for was one that would help people deal with the debt collectors that were known as the scavenger debt collectors.

    I read your comment to my hubby because we’ve been having a lot of discussions about the letter that I’m still editing. It has not been easy to convince him that this is the thing that he needs to do, but after reading him your comment, he’s now ready for the final version of the letter and we’re going to send it tomorrow.

    The scavenger debt collector just made their nightly call — 8:50 pm on a Sunday night. I told my hubby that the letter definitely has to go tomorrow. Their calls are getting closer together and they are doing more of the hang up calls than ever. This call tonight had their name and number on the caller id.

    JT Locke
    The Frugal Housewife

  9. Terri says:

    Isn’t that against the law? I would also report them to the Fair credit reporting bureau, atty general of your state, and any other bureau you can and “threaten” them with that info that you are reporting them!

    If the law states a statute of limitations how do they get away with that??

    Thanks for the post!

  10. Connie says:

    Hi there:
    In a recent article you spoke about a letter that you sent for your husband on Cease and Desist. Can you guide me on where I can find an example of how to put together a letter like this? I want to make sure I get all the right wording, codes, etc.
    Thanks,
    Connie

  11. Hi Connie,

    The Cease and Desist Letter that I sent for my hubby was one that I had written. It ended up being over three pages long because there were numerous violations of the FDCPA that were broken and I tend to quote alot of the Sections of the FDCPA.

    You might want to try this form letter. I’m not too crazy about the part in there that talks about the criminal charges, but then again, I’m not an expert in this field. If you do decide to send one like this, I suggest sending it both certified and regular snail mail. This is so that if they decline the certified and the snail mail one doesn’t come back to you, then you know they received it. Be sure and put it in the letter at the top something like this:
    Via Certified Mail and Regular U.S. Postal Mail.

    Hope this helps!!!

  12. Mad one says:

    So I just got a call from one of these Company claiming they where a law firm asking if I had received a summons and that they had been retianed to sue to collect a debt. This is what I did I had there # on caller ID. 1st I informed them that I never have had any business dealing’s with the company they where collecting for ( actually I haven’t) I also informed them that I had declared Bankruptcy since the date they claimed the debt originated ( unfortunately true). i also told them that I had received a call very similar to this one claiming that I owed the company last year, also claiming that they where going to sue and that the Statute of limitation had run out long ago. They said that they would pass my information to a lawyer and ended the call.
    I then did a reverse phone look up on there #. When I called it back from a blocked # it went directly to voice mail so I left message claiming I was an investigator with the federal trade commission and asked them to call me back so we could resolve the matter in a timely manner. Of course the phone number I left was the contact number for the federal trade commission.
    This was the 2nd call that I had received like this the last one about a year ago never called back hopefully this one wont either.

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