How not to communicate with a debt collector

The Consumer Financial Protection Bureau has recently released letter templates that consumers can allegedly use in their communication with debt collectors. Of the five templates, I’ll discuss herein just one of the templates: the template for disputing a debt and asking a debt collector to prove responsibility or cease communication. According to the template’s documentation, using the template to contact a debt collector means you are saying "This is not my debt".

The text of the template says this:

I am responding to your contact about collecting a debt. You contacted me by [phone/mail], on [date] and identified the debt as [any information they gave you about the debt]. I do not have any responsibility for the debt you’re trying to collect.

If you have good reason to believe that I am responsible for this debt, mail me the documents that make you believe that. Stop all other communication with me and with this address, and record that I dispute having any obligation for this debt. If you stop your collection of this debt, and forward or return it to another company, please indicate to them that it is disputed. If you report it to a credit bureau (or have already done so), also report that the debt is disputed.

Collection agencies sometimes have difficulty locating debtors. This can lead to cases of mistaken identity, where a person being contacted by a collection agency, or the collections department for a creditor, has the same name but is not the person they are actually trying to find. There is actually an entire industry dedicated to locating debtors known as skiptracing, or "debtor and fugitive recovery".

Let me provide a bit of my own background in this…

Back in the fall of 2005, Bankers Trust contacted me regarding a delinquent mortgage. The first person who contacted me said simply that he was calling about my mortgage payment, and I told him point blank that I did not have any mortgage, that they had the wrong person. Within a couple weeks, I had a voice mail on my answering machine, again from Bankers Trust, regarding the delinquent mortgage. I called back and left a voice mail, again asserting they had the wrong person.

I definitely learned that they did not listen to me when I was served shortly after New Year’s Day 2006 – Case No. CE52618, Iowa District Court for Polk County, Iowa, in case you’re curious.

After being served, I contacted the Court to find out what I needed to do to ultimately sever myself from that foreclosure action. They told me I needed to file an affidavit with the Court, which also had to be notarized (thankfully there was a Wells Fargo branch a couple blocks from the courthouse). A copy of the affidavit was provided to Bankers Trust’s attorneys, who then filed notice with the Court acknowledging the affidavit and basically saying "yeah, we had the wrong guy". Given the form was notarized, and the form bore my full name, they didn’t really have any room to maneuver on that.

Oh, I should also mention I had to file the affidavit with the County Recorder. Yeah that was a fun day indeed.

So it is certainly possible that you could be identified for a debt that is not yours, a debt to which you are not a party. So should this happen, should you send a letter saying "I’m not responsible for this debt, and don’t contact me until you can prove that I am"? Umm… no.

Instead what such a letter would do is likely prompt them to think "okay, we found the right person but they’re refusing to pay" and then you’ll be where I was in 2006: having to take time out of your day to file a notarized affidavit with the Court demonstrating that you are not the person in question. How do I know this? Because I lost my cool with Bankers Trust across voice mail the second time they called me about that delinquent mortgage. They had my contact information, so when they filed the foreclosure suit on December 30, 2005, according to Court records, guess who they went after.

What a way to start a new year… Wouldn’t you like to avoid that? Yeah, I thought so.

So how do we avoid that? Well it requires being polite to the collection agency and not losing your cool, over the phone or in writing:

Dear [collection agency name],

I received notice of the attached alleged debt on [date received]. While the name on the debt is [name], and I am a person with that name, I do not believe I am the person who owes this debt. For reference, my full name is [full name]. I trust that you will exercise additional diligence in attempting to locate the person who does owe this debt and that I should not be further contacted on this matter.

Providing your full name – which the debt collector will likely not put on anything they send you – pretty much gives the debt collector a chance to basically say "oops" and leave you alone.

When this letter is sent to the collection agency, attach a photocopy of whatever notice they provided you informing you of the debt. When the collection agency receives the letter, they may or may not do anything with it. But you also may not hear back from them at all because they’ve realized their mistake, fired their skip tracer, hired a new one, and found someone else to bother who may or may not be the actual person they’re seeking.

They may also verify their information, determine, even erroneously, that you are, indeed, the correct person to be contacting, and renew their contact with you. This could happen for numerous reasons, including the account having always been a fraudulent account opened in your name that you never knew existed.

The collection agency might also interpret your letter as a refusal to pay and sue you.

But at least you were polite in the beginning, which will greatly help you if you are sued. Because if you’re polite from the start but sued anyway, they may be less likely to challenge your affidavit. And yes, they can do that.