By: Robert J. Nahoum
Consumers sued in debt collection cases often find themselves up against companies they have never heard of. Names like Midland Funding, LVNV Funding, CACH LLC, New Century Financial Services, Portfolio Recovery Associates, Unifund and Calvary Portfolio Services. The reason you’ve never heard of these companies is because, while you’ve never done business with them, they’re doing business with someone who knows you.
There is an industry out there waiting in the shadows of traditional banks and credit card companies to buy up, for pennies on the dollar, portfolios of old debt. These bottom feeders are called debt buyers and they make boat loads of money collecting long forgotten consumer debts.
The difference between an “original creditor” who first extended you the credit and a debt buyer is important because there are different rules that apply. Federal debt collection laws known as the Fair Debt Collection Practices Act (FDCPA for short), regulates the conduct of third party debt collectors like debt buyers. Debt collectors subject to the FDCPA must not use false, misleading or harassing debt collection tactics. Original creditors are generally not subject to these restrictions. If a debt collector violates the FDCPA, you can sue for damages up to $1,000.00 plus actual damages (like pain and suffering) and your attorney’s fees.
It often happens that as soon as the consumer figures out who the original creditor is, he or she recalls having paid off the debt years ago. If this is true, it would be a complete defense to the debt collection lawsuit and perhaps even amount to a violation of the FDCPA.
To sort this all out, consumers in this situation reasonably assume that the original creditor would know whether or not the debt was paid. However, as some frustrating phone calls to the original creditor will reveal, it is difficult if not impossible to get any answers from the original creditor.
The reason for the original creditor’s unwillingness to cooperate is because, as far as they are concerned, when the sold the debt to the debt buyer, they washed their hands of you. Your records will no longer appear in their system and so they will be of little if any help to you.
If you need help settling or defending a debt collection law suit, stopping harassing debt collectors or suing a debt collector, contact us today to see what we can do for you.