Unfair debt collection practices, such as debt collection scams payday loans has popped up on my radar more than once. In a recent money.cnn.com article Ben Rooney reported that professional debt collectors had been arrested by Federal agents for allegedly running a $4.1 million debt collection scam. The best advice I can give you is to pay attention and be vigilant. There are a lot of bad people out there trying to scam good people and steal their money. If you think you are a target of a debt collection scam contact me.

The biggest mistake that you can make is to ignore a Summons or Complaint because you are sure you do not owe the money. You may think that because the claim against you is absolutely false and ridiculous that you could never be forced to pay anyone. You are absolutely wrong.

If you are served with a Summons or Complaint you MUST serve and file an appropriate and timely response. If you do not serve and file an appropriate and timely response the Plaintiff (the company that is claiming you owe it money) will obtain a default judgment against you. A default judgment turns that false claim into a valid judgment that can be enforced by taking money out of your bank account or your paycheck.

If you do not file and serve an appropriate and timely response when you are served with a Summons or Complaint, North Dakota’s laws and court rules allows the Plaintiff to ask the Court to issue a judgment against you for the amount stated in the Complaint without giving you any notice.

If you do not respond the Court does not make any investigation to determine if you really owe the money. The court system assumes that if you do not respond that you admit that you do in fact owe the Plaintiff the money demanded in the Complaint.

Once the Plaintiff has obtained a judgment against you it is very difficult to have the judgment vacated, even if you never owed the money in the first place. Once the judgment is entered there are strict time limits to challenge the judgment and limited legal grounds that allow the Court to revoke the judgment.

The problem often starts when a business sells its “debt” to professional debt collection companies for pennies on the dollar. Often the records being sold are not accurate. The alleged debts may have been paid or the time for using a lawsuit to obtain a judgment (the statute of limitations) has expired. The business selling the “debts” may even tell the professional debt collection company that the information may not be accurate and the business has no way to determine if anyone listed in the information actually owes anybody anything. This problem becomes worse when the information is sold multiple times.

The professional debt collection companies pull information off the digital records that they have purchased to obtain names and contact information and an amount of money that may be owed. The professional debt collectors then begin trying to turn this information into cash. They do this by trying to convince you that you owe them money.

You will get a telephone call or a letter from the professional debt collector saying that you owe it money. You must act to protect yourself. The professional debt collector is not trying to find out if you really owe the money, its one and only goal is to get you to pay them money.

First, never admit that you owe any money. This is extremely important in cases where the time to commence a lawsuit (the statute of limitations) has expired, because your statement may be used to extend the time for using a lawsuit to collect a debt.

Second, you must demand in writing, by sending a letter to the professional debt collector, verification or confirmation of the debt. By law, if you request the information, the professional debt collector may must provide you with the documentation that it is using to claim that you owe the money. Remember, just because the professional debt collector has some type of documentation does not prove that you actually owe the debt.

Only in those cases where you have verified to your complete satisfaction that the debt is valid should you engage in any discussions to make payments on the alleged debt. If you do make payments you must keep accurate records of how much has been paid. Without records you may be forced to pay the same debt over and over again.

In many cases the professional debt collector will commence a lawsuit against you by serving you with a Summons or Complaint. It is critical that you file and serve an appropriate and timely response. An appropriate and timely response is an Answer to the Complaint filed with the Court and served on the Plaintiff.

A telephone call to the Plaintiff or its attorney telling them you do not owe the money is not an appropriate or timely response. Even a letter saying you do not owe the money may not be an appropriate or timely response. Anything you did to deny the debt, whether a letter or a telephone call is never an appropriate and timely response.
If you are served with a Summons or Complaint you must immediately contact an attorney. Often simply by hiring an attorney to do no more than file and serve an Answer for you will put an end to the collection action. The professional collection company knows that most of these debts cannot be proved and they will be abandoned as soon as you hire an attorney.

You can use my low cost Complex Consultation service, a 65 minute consultation for $85.00, to obtain a review of the situation and start protecting yourself from professional debt collectors who are trying to take money out of your paycheck or bank account.

For additional information about Unfair Debt Collection Practices, check out these websites maintained by the Federal Trade Commission. Information on “fake debts”. Information on time barred debts.