I have discussed this one already, but it is so important, I want to get into it again.
Basically, we see this a lot. Imagine if you would, we are working on behalf of one of our splendid, wonderful clients. We get a response back from TransUnion, or Experian, you get the point. And lo and behold, one of the collection accounts we are asking the bureaus about could not be verified hence, under the FCRA, the account gets deleted. Ok... great. Now what?
Well, aside from your scores going up, which should happen, presuming you are behaving well in other areas of your credit, we also need to keep an eye out on the mail. Why?
Because, if you were a collection agency (be glad you aren't, I can't imagine they have much fun) and you realized that you cannot actually prove the debt you bought from the creditor is accurate, you have to stop pursuing it. You cannot continue to pursue that money. Meaning you bought a bad debt. So, what do you do with it if you are a collection agency?
Easy... you SELL IT!! To who?? Another Collection Agency of course!! Do you tell them that the debt is not verifiable? Of course you don't! So you get paid for a debt that cannot be verified and you let the new collection agency deal with it when they find out it is not collectible. Nice right??
So... why am I writing this? Because... if the new collection agency follows the Fair Debt Collection Practices Act (they don't always, but the better ones do), they have to send you what we call a 'Debt Validation Letter' or (DVL), what is this? This is... well, let me show you.
Now, just by looking at it, you'd think... 'ok, that's from a collection agency...but, the really important info is on the back!
So, in short. Read the fine print. Always. If your collection accounts are being sold and bought, you may have an oppurtunity to determine whether the debt is valid or not. Take advantage of it!
If this doesn't make sense, or, if you have questions.
Give me a call.
Ed-Jack Dvorak is National Affiliate Liaison at Credit Dr., a national credit restoration company. He works with clients and creditors to improve credit profiles.