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Being sent to collections for a genuine financial mistake can feel humiliating. It’s arguably worse, though, when an account is wrongfully sent to collections—and unfortunately, it isn’t that uncommon. In fact, consumers made 280,000 credit-related complaints in 2020—more than twice the number of complaints filed in 2019.
So, what can you do if one of your accounts gets sent to collections in error? In this article, we’ll explore your legal rights, and we’ll share a step-by-step guide to disputing credit errors.
You’ve never missed a payment—but suddenly, your credit card account gets sent to collections without notice. What’s going on?
Most collections errors happen for one of the following three reasons:
If they believe the debts they’re chasing are genuine, debt collectors are allowed to contact consumers. Collection agencies can call you on the phone, send letters to your address, fax you, email you or text you via mobile.
If you don’t want a debt collector to communicate with you, you can tell them to stop contacting you via any and all means. However, if they later decide to take you to court to recover the debt, they areallowed to let you know.
Yes. Debt collectors can’t contact you after 9:00 p.m. local time or before 8:00 a.m. unless you tell them it’s okay for them to do so. They also can’t contact you if you tell them you have an attorney and your attorney is handling your debts for you.
Thanks to the Fair Debt Collection Practices Act, debt collectors also can’t:
Remember—debt collectors aren’t government agencies, and they don’t have the power to have you criminally charged for not paying a debt. If you feel harassed or threatened in any way, contact an attorney.
If a debt collector contacts you by letter or telephone to try to recover a debt you’re sure you don’t owe, ask for proof of the debt. Send them a letter within 30 days of the first contact, requesting documentation of the account, and tell them not to get in touch again until they can prove you owe them money.
The agency must provide you with proof of the debt within 30 to 45 days. If they can’t find proof, or if they notice a mistake, they can’t collect the debt. If they do find some sort of proof, you may need to contact an attorney or a credit repair agency to handle the matter for you.
If you don’t recognize an account on your credit report, take action straight away. Tackling the mistake promptly can help prevent—or alleviate—damage to your credit. Here’s what to do:
Under the terms of the Fair Credit Reporting Act (FCRA), companies and credit bureaus have to prove that you owe a debt to list the item on your credit report. If they can’tprove the debt is yours, they have to remove the listing from your credit profile.
In short, yes, you can. Under the terms of the FDCPA, consumers cansue creditors who send accounts to collection agencies—especially if those collection agencies don’t follow FDCPA guidelines or behave illegally. Always consult a lawyer to help you decide what your best course of action is for you.
If you’ve been the victim of identity theft or you don’t feel comfortable tackling disputes by yourself, consider contacting a credit repair company. Credit repair companies tackle disputes and help customers recover from financial hardship all day, every day—so they know what they’re doing. Well-rated credit repair companies include CreditRepair.com and Lexington Law, both of which offer consumers a full range of repair services.
It’s important to keep an eye on your credit report after you resolve the erroneous account. If you notice any other errors, or if any of your other accounts are sent to collections by accident, tackle them straight away. To see a free credit snapshot, sign up for a Credit Report Card from Credit.com, or sign up for ExtraCredit to see the bigger picture.
Disclosure: Credit.com and CreditRepair.com are both owned by the same company, Progrexion Holdings Inc. John C Heath, Attorney at Law, PC, d/b/a Lexington Law Firm is an independent law firm that uses Progrexion as a provider of business and administrative services.
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