What Happens when Collection Companies Haunt you for Debts you Don't owe?

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I've certainly had my share of difficulties with NCO's collection practices -In fact; they (along with the credit bureaus) share the honor of actually naming my book (Give Me Back My Credit!) -A title born out of overall frustration and pure passion to stop the insanity of inaccurate credit reporting and abusive debt collectors who consumed my life for all too many years as they continued to report, and attempt collection, of non-existent debts and/or debts that were not owed -or mine!

It appears that NCO and their continued practice of demanding payment for long-ago paid debts, debts that don't exist, and/or debts that belong to an identity thief, ultimately continue to be a frequent complaint and hardship faced by many consumers who turn to the courts for help.

Here's yet another recent story involving NCO and their collection practices. Paying a debt collector for a debt you don't owe, in hopes it will get rid of them, can actually have the opposite effect. Paying the debt is viewed as though you acknowledge you owe it and can damage your credit rating. The collection account may then remain on your credit report for seven long years from the date you pay off the debt -a debt you didn't owe.

Zombie debt': When collectors haunt you

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, 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.

The collectors then resell some of that debt to other collection agencies, accounting for $100 billion in credit card debt sold annually, according to the March 2006 report.

"Zombie debt is definitely an issue on Long Island," said Joseph Mauro, a West Islip consumer lawyer specializing in debt-collection issues

Nassau-Suffolk Law Services, a nonprofit civil legal services program for the poor, launched a clinic in December to help military personnel and low-income consumers facing debt-collection lawsuits, many of which involve old debt, said Mauro, who obtained a private donation for the project.

He said some victims of identity theft in the 1990s face calls from collection agents for credit cards they never used.

Mullen said the letter from NCO Financial Systems, based in Horsham, Pa., transported her to her long-ago financial troubles. Now "I take sleeping pills, which I never did," she said. "When I do get sleep, I wake up wide awake, like I jump up." READ TWO PAGE STORY at Newsday.com

Another story...
Woman gets NCO off her Back...

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