NCO's Collection Practices Called into Question. (again)

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What would you do if a collection company harassed you for a debt you didn't owe? Many just pay it and that's what collection companies hope for. By paying a debt you don't owe -trying to make it disappear can be harmful to your credit.

Collecting debt is a multi-billion-dollar business. According to a recent filing with the Securities and Exchange Commission, the country's largest debt-collection agency NCO posted $936 million in revenue in the first nine months of 2007.

Zombie debt can haunt you

MELVILLE, N.Y -- After Kim Mullen filed for bankruptcy in 1993, she cut up all her credit cards in her lawyer's office. Since then, the Levittown resident has managed to obtain a good credit rating.

But in December, NCO, a debt collector contacted her, saying she had an unpaid card balance of $5,655 from 1992. With interest, the letter claimed, the debt had grown to $19,400.

As old debt seems to rise from the dead, it's taken on a name -- "zombie debt." And in recent years, more and more such debt is coming back to haunt consumers, according to their advocates and lawyers who specialize in debt.

Mullen, 46, says she doesn't remember the debt and has challenged it. Others who have received such notices say the purported old debts are a result of identity theft.

Many credit card companies have started selling delinquent accounts to collectors to boost quarterly earnings, according to a report by Kaulkin Ginsberg, a Rockville, Md.-based adviser on debt collection.

For more stories and video on NCO's practices see:

What happens when debt you don't owe haunts you.

Woman Gets NCO off her back

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