Halloween seems to be an appropriate time for zombie debt, but the scary scam is no laughing matter.
Over the past two months, the Better Business Bureau (BBB) has seen an increase in complaints about calls from debt collectors.
The calls primarily concern ‘zombie debt’, that is, money that was previously owed, was paid in full long ago, but was somehow brought back to life and is still being treated as outstanding debt.
Some of the calls also concern debt that was never owed to begin with.
The most common scenarios of zombie debt include debts already settled with the creditor; fraudulent charges from identity theft; and scammers calling about fake debts trying to trick you into giving up money.
What are your rights?
As a starting point, third-party collectors (those collecting debts on behalf of the original creditor), bailiffs and debt repayment agents are required to be licensed by Consumer Protection BC (CPBC).
Other guidelines also state that collection agencies cannot make abusive phone calls, harass, be misleading or misrepresent themselves in order to locate debtors; contact you at work after being told to stop; make telephone calls at unreasonable times of the day; or use profanity or be verbally abusive.
If you think you’ve been contacted by a zombie debt collector, ensure it is a legitimate company and collection agency, and that they are representing a company that you’ve dealt with in the past, and actually owe money.
Tell the debt collector that you will contact them as soon as you verify the information.
Visit the CPBC website to confirm if the collection agency is licensed. While you do your research, you can instruct the collection agency to only contact you in writing. CPBC has prepared a form to help with this process.
Gather as many facts as possible about the debt in question. Ask the collection agency to send you a letter with the details, which should include information about the original and current owners of the debt, and how much is owing. Once you receive this information, you should be able to determine if the debt is really yours and if it still needs to be paid.
If you determine the debt was yours, but you already paid it, write a letter to the collections agency, include proof of your payment and demand that they cease contact. Make sure to keep a copy of the letter.
The collections agency is legally required to stop contacting you under the Business Practices and Consumer Protection Act.