Zombie Debt

Zombie debt collection is on the rise.  Zombie debt also known as Phantom debt is an extremely old or even fictitious debt that has returned “from the dead” to “haunt” the debtor.  That amount owed on the debt can somehow grow to thousands of dollars when it was originally for a few pennies or never even owed in the first place.  While the concept of zombie debt has been around for a long time, it has recently gained much attention as consumer complaints regarding this type of debt continue to grow.

While the Fair Debt Collection Practices Act (“FDCPA”) was enacted to protect consumers from abusive debt collection tactics, the statute won’t protect you from a collector who basically does not exist.  Phantom debt collectors are often hard to find and practically invisible.  Consumer complaints state that these collection agencies don’t provide any name, address or contact information and threaten arrest, garnishment and to seize your assets if you don’t pay.  These collectors are professionals at intimidation and their aggressive collection tactics can be very convincing to the naive consumer. 

According the Consumer Financial Protection Bureau, (“CFPB”), the agency created to handle collection issues faced by consumers, phantom debt collection ranked second highest collection problem complained about by consumers.  The CFPB warned consumers that during collection calls ensure the collector’s and the debt’s legitimacy before providing a credit card or agreeing to make a payment.  Allow a caller to provide you with personal information, not the other way around.  Ask the collector to give you your account number, social security number or additional information.  Do not provide bank account, checking account or credit card numbers to the collector no mater how intimidating he or she may be.  To ensure the debt is valid, ask the collector to send you information in writing.  Contact the original creditor to make sure the debt is valid and do some research on the collection agency.

There are other tools at the consumer’s disposal to determine the legitimacy of the phantom collector.  If they provide a company name, check with the Secretary of State’s office within that state and see if they have filed their corporate paperwork.  Often times, there is no such company in existence with the Secretary of States office.  If your investigation yields a street address, go onto Google Maps and look for it.  The phantom collectors’ addresses often lead to a strip mall where there is a UPS Store of some other mailbox drop store.  This would be where the phantom collector gets its mail – not where it conducts business.  Finally, check your local court websites.  Many courts these days have public access to the court docket on line.  Run a search to see if this particular company ever appeared in court to sue a consumer.  You will likely find that they have not, and the threats they are making to you are utterly false. 

If you believe you are the victim of a phantom debt collection scam and would like more information, contact SmithMarco P.C. for a completely free case review.