Wrongful Credit Damage, Identity Theft and Debt Collection Abuse Blog

Debt collectors have various tricks they play on consumers when they’re trying to collect a debt.  You need to know basic self-defense if you’re contacted by a debt collector.  Here are some tips:

1. Never give them your banking or credit card information.  Unscrupulous debt collectors will take more from your account than they’re authorized or allowed to take.

2. Never do “check by phone”.  Debt collectors can empty your bank account and leave you with no recourse once you give them your bank account information.

3. Never send them money via Western Union.

4. Never agree to anything verbally only.  Before you pay them a dime, get a signed agreement from them detailing the exact terms of any deal you have worked out with them, along with a statement that the deal will, if performed by you, will result in the full satisfaction of the debt.  We see all too many cases of debt collectors tricking consumers with verbal promises, only to break them and then press the consumers for more money after the consumers have already paid a lot to the debt collector.

5. Understand that debt collectors cannot get any accounts removed from your credit report.  Only the original creditor and/or the credit bureaus (Experian, Equifax and TransUnion) have that ability.  So, if a debt collector promises to “clean up your credit” if you pay anything on the debt, this is most likely a false promise.

6. Always record your conversations with debt collectors, where legal.  In California, you have to advise the debt collector that you want to record the conversations.  Confirm this in writing to the debt collector.

I hope this short list of do’s and don’t’s has been of assistance to you.  Thank you for taking the time to read it.

The answer is yes: the debt collector is allowed to try to collect the debt.  However, you as the consumer need not pay it.

To understand why debt collectors would try to collect very old debt, you need to understand a few things about the debt collection industry.  The number of debt collectors has skyrocketed in recent years, meaning that debt collectors are competing vigorously for any debt portfolios that need to be collected.  As a result, many banks, mortgage companies, auto lenders, retailers, credit card companies, etc. now find that there is actually a market among debt collectors for very old debts that have long been written off.  Competition is such among debt collectors that they’ll try to collect even on debts more than four years old.

In California, four years is a “magic number”, because it is the statute of limitations for any lawsuit alleging a breach of a written contract.  Most consumer debts fall under the four-year statute of limitations, although many also fall under the two-year statute of limitations for breach of an oral contract.  The four years would be calculated from when the creditor knew, or should have known, that the agreement had been breached.  Certainly, if the creditor charged off the account, this would start the four years running, and it may have been running before then.

So, if you’re debt is clearly more than four years old, don’t pay on it, no matter what the debt collector says or threatens.  Fight it.  If the harassment is bad enough, hire an attorney to bring an action against the debt collector.

Also, NEVER NEVER NEVER make a payment, even a small one, on an old debt.  This has the effect of re-starting the statute of limitations, and it means you will end up paying the entire debt when you didn’t have to before you made the payment.  Never let a debt collector trick you into making a payment on a debt which is too old to collect.

I hope this short article is of assistance to you.  Thank you for taking the time to read it.

This list may be updated periodically, but here are the Southern California debt collection firms from which we’re seeing the most frequent alleged abuses of credit reporting or fair debt collection laws:

1. Wolpoff & Abramson–specializes in using “strong-arm” tactics to collect very old and invalid debts.

2. Great Seneca Financial Corp.–actually owned by Wolpoff & Abramson, which is a law firm.  Great Seneca is not a law firm but is a collection agency.  Also specializes in “strong-arm” tactics to collect really weak and old debts.

3. Arrow Financial: we’ve seen them in several instances of bad credit reporting practices.  Very sloppy debt collection agency.

4. NCO Financial Services: we’ve seen several instances of bad credit reporting practices.

5. Asset Acceptance Corp.: specializes in trying to collect really pathetic debt; will resort to “strong-arm” tactics and bad credit reporting practices.

6. V.I.P Adjustment Bureau, Inc.: real shysters here.  V.I.P. is owned by Richard Lowell Dehart and Jay Steven Bernstein, who formerly ran Lake Valley Retrievals, Inc., another debt collector.  Good ‘ol Richy & Jay went out of business with Lake Valley and pleaded poverty in the courts until they whined their way out of Lake Valley’s considerable obligations to consumers, investors and even the government.  They then bankrupted Lake Valley and promptly opened V.I.P., which is no better.  Don’t trust these guys.

I hope this short article has been of assistance to you.  Thank you for taking the time to read it.