Friday, December 5, 2008

Credit Repair and the Cease and Desist Letter

How many times have you had an annoying collector keep bugging you to pay a bill? How do you even know if he has the right to collect or if his information is correct? Usually his infomation is incomplete, at the very least. Most of the times it is incorrect.

Fortunately, though most people don't realize it, consumers have the upper hand when it comes to collectors, most of the time. This is mainly because of the FDCPA - Fair Debt Collection Practices Act. This act outlines how and when a collector can contact you. It also describes what they can say to others when they are trying to locate you (family members, friends, co-workers, neighbors, etc.). But, just because there is a set of laws that they are supposed to adhere to, doesn't mean they follow those laws.

If they are calling you at work, you can tell them you are at work and not allowed to take personal calls there. They are supposed to knock it off at that point. If they are calling you on your cell phone, the same is true. They are supposed to stop if you tell them to. However, most collectors are ignorant and blatantly violate the law. They try to claim that they don't have to stop unless it is in writing, and then if you do that they say they will have no recourse other than to sue you.

These statements are false. There are partial truths to them, but since not completely true, they are false. First, you can tell them verbally to stop if they are contacting you at work or on your cell. Secondly, sueing someone is never the only course of action they can take.

But, to cover your own self, here's how you should handle them. Put it in writing. You must be careful what you say though. You can stop them from calling you on any phone by sending them a "limited" cease and desist. It is limited because it says they can no longer contact you by phone, but they can send all the mail they want. All correspondence should be in writing, if they feel the need to contact you.

Now, there are times when you use a full cease and desist letter. A full cease and desist tells them they may no longer contact you anymore for any reason, at any time, through any method. If you have proof that you have paid an account that they are harrassing you over, send it. If you end up getting sued, make sure you show up for court with your documentation in hand, otherwise, they may end up scamming some more money, plus court costs from you.

Now the second time you use the full cease and desist letter is when the account is absolutely not yours and they have not provided any proof that it is indeed yours. Again, if you get sued, you must go to court and fight. Take with you all copies of letters you have sent to them requesting "validation" and their responses you've received. You must be able to show the court that what they have given you does not constitute proof or full validation as required under the FDCPA.

Now, my favorite, which is a common violation of collectors, is when they attempt to collect a debt that is outside of the statute of limitations (SOL) for your state. The debt is "time barred". Different states have different timetables. California is 4 years. In California, when a debt is out of SOL, all collection activity must cease. California categorizes many actions as collection activity. Calling you or people you may know, writing to you, sending you bills, and even better, reporting to the credit bureaus or verifying with the bureaus. Let them take you to court for this one. "Your honor, this debt is time barred, here is the proof, so therefore these knuckleheads are SOL because of SOL"!!!

Keep copies of EVERYTHING you send the bureaus and collectors. You may need it in court to defend yourself. You Will need it in court if you decide to go after them for monetary damages for violating the law and your rights!

One more thing I like to add when I send a cease and desist letter. I like to tell them that they are not to sell, assign, or give the account to any other party to ever attempt to collect again. I include a hint of a threat to sue if it appears on my credit report again. This is a good way to keep bad debt from recycling over and over again on your credit reports.

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