Billing error? Here's how to fix it
You pay your bills and have great
credit. Still, a collections agency is hounding you for a debt that
you don't recognize, you've already paid or is too old to be collectable. Now what?
The law is on your side, but you have to get moving
to protect your credit. Here's what to do:
As soon as you discover the problem, send a letter
to the creditor, collection agency and all three major credit bureaus.
(You can address the original to either the collection agency or
creditor and send duplicates to the others.)
When writing to the credit bureaus, simply address
the letter to the attention of the general counsel or supervisor
of the legal department, says David A. Szwak, a consumer credit
attorney and partner with the Shreveport, La.-based firm of Bodenheimer,
Jones, Szwak & Winchell LLP:
1. Detail the problem and the actions you
expect them to take. For example, if someone else's debt has been
included in your credit report, you want them to go back and correct
your records -- and to refrain from including the debt in future
2. Include your name, address, account number
(if you have one) and Social Security number. Blank out your Social
Security number on copies going to third-party collection agencies
(or to a creditor with whom you do not have an account).
3. Keep a copy of the signed letter.
4. Send the letters certified mail, so you
can prove all parties received them.
At this point, the creditor, the collection agency
and the credit bureaus are required to investigate the debt, verify
that it's correct and that it's really yours. They have 30 days
to validate it or correct your records. If they continue to insist
the bill is genuine -- or just do nothing -- you have two options:
- File an amendment to your credit report
with all three reporting bureaus. This is a statement that
will explain your side of the matter and is required to be included
in your records each time the debt is reported. But this notation
will not clear up your credit rating. It also doesn't guarantee
that the debt won't be held against you.
- Sue. You can sue the original creditor,
the collection agency and the credit bureau refusing to correct
your records. Depending on the suit, you could collect attorneys'
fees and punitive damages, as well as any money that the inaccurate
report cost you. (For instance, if you were denied a 6-percent
rate on a home loan, and had to settle for a 10-percent rate,
you could collect the difference over the life of your loan.)
You can find an attorney who specializes in consumer credit cases
by contacting the National
Association of Consumer Advocates.
Dana Dratch is a freelance
writer based in Atlanta.
-- Posted: March 11, 2002