Question:
My niece and her husband ran afoul of a whole bunch of creditors
several years ago. One of those, American Express, had a debt
collection agency come for the debt, $170 (US). They paid this debt to
the agency. Now, almost three years after the fact they are getting
letters and calls again, this time from another agency, for the same
debt. Their claims that it has been paid are falling on deaf ears. The
new collection says all kinds of information is needed from the
original collection agency as proof of payment. Unfortunately, this
agency has since gone belly up and disappeared.
First, do these collection agencies act as the agent of the creditor
or is the debt actually sold to the agency with the agency now the
creditor? If this first agency then sold the debt to another, why are
they being so tough and hard-nosed about acknowledging the payment of
the debt?
I just got word of this and haven't seen all the documents. I believe
though that all they have in hand is a canceled check form the first
agency. I doubt there is a copy of the initial collection notice nor a
payment notice, although I am not sure of this.
This is in PA, initial collection agency was in Baltimore, don't know
where the new agency is. Any thoughts on how to proceed in this manner
appreciated. The amount is paltry - any professional engagement would
instantly become non-costeffective.
Answer:
You may also be able to proceed by simply sending the collection
agency a letter identifying their violations of the FDCPA and a demand
for the situation to be corrected. However, you would need to spend a
considerable time reading the FDCPA and understanding it in order to
do this. If you have extra time and money www.nbi-sems.com has some
good publications and all day courses regarding the FDCPA that will
help you understand this better.
Under the FDCPA, your award of damage is limited, but the attorney
fees are not. Therefore, a debt collector risks a judgement of
several thousand dollars over a $170 debt, with a maximum damage award
of $1,000. This doesnt make very good business sense and therefore a
simple letter is all that may be required to get the collector off
your back.
