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How to beat credit scammers December 4, 2008

Posted by truthspew in Uncategorized.
Tags: , ,

You’ve probably gotten letters saying you owe Company X the amount of Y dollars but you have on idea who the hell Company X is, and you don’t have any recollection of ever having a debt of Y dollars.

The whole credit system is so sloppy that things occasionally get misdirected and sometimes you’re the beneficiary of one big pain in the ass. What you have to understand about the system of consumer debt is that the original creditor sells the bad debts for pennies on the dollar. Small law and credit collection firms will buy them for that amount knowing that they’ll settle maybe a third of those debts which covers all their expenses and leaves enough to go around to everyone in the firm.

However the key thing is that the agency usually doesn’t get any of the original paperwork, things like the charge-off, the ledger of debits and credits and most importantly anything with your signature on it acknowledging the debt. In essence they get a printout saying what you owed and then they apply obscene markups and try to get you to settle.

The hungrier firms, like Howard Lee Schiff & Co, will actually file small claims suits after a period of time. This is what happened to Keyron.

Back in August he got served to appear in small claims court. We both looked at the info, it was for a Providian credit card but the thing was, he never had a Providian card.

So in answer to the summons we sent this:

{Your full name}
{Your full street address}
{City, State Zip}


{Creditor or Agency Name}
{Creditor Street Address}
{Creditor City, State Zip}

Dear {Creditor}:

I am writing regarding an account you claim is in arrears. You claim that I owe you {Amount} on account number {Account Number}.

I have no record of having such an account with your company.

Therefore, I must dispute the item that you are reporting.

Please be advised that this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that I am disputing your claim and requesting validation of this alleged debt.

If you are able to prove that there is an error in my files, then I am more than happy to pay what I owe.

However, please be aware that the above-named Title and Section requires you to provide me with evidence that I have any legal obligation to pay you.

With that in mind, please provide the following:

1. A detailed and itemized list of all charges under the alleged accounts,
2. An explanation of how the charges were calculated.
3. Proof that I agreed to pay what you say I owe.
4. The identity of the original creditor.
5. Proof that you are legally authorized to collect this alleged debt on behalf of the original creditor.
6. The date that this alleged account was first declared delinquent,
7. Prove the Statute of Limitations has not expired on this account
8. Proof that you are licensed to collect in my state.
9. The license number for your company.
10. Contact information for your company’s Registered Agent.

Please provide all of the above information within 30 days, as is required under the Fair Credit Reporting Act.

If you are not able to provide this information, then please delete the information from my report immediately and withdraw the judiciary small claims suit.

I look forward to resolving this with you quickly and amicably.


{Your Name}

cc {CC’s here – usually District Court, State AG’s Consumer Office, etc.}

We sent it via registered/return receipt mail so we knew they got the copies. It went to both the courts and the creditor.

We get mail saying they got it and that here is the information we asked. Sure, but the key thing they didn’t have, the gotcha if you will, was proving the debt.

We went around and around. During the first appearance the plaintiff’s attorney wasn’t present. This time he was.

I have to admit, Keyron and I play bad cop, good cop, in fact he tends to be a little intimidating to those that don’t know him. I play the calm, cool, collected one who knows the system which I do.

We get assigned to another court room and we do a pre-trial conference with the attorney. I told him I understood how it dropped off the calendar and related my experience when I was at the state AG’s office, things would constantly get dropped.

The attorney tried to fluff off the Fair Credit letter but in the end he agreed that he could NOT prove the debt and signed off on a stipulation saying that he dismissed the case.

In other words, if you get a summons answer it before you get to court especially if it is for a consumer credit issue.


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