Q: If I don't owe the money, what can they do to hurt me?

A: First, you will receive a letter telling you that by law you have 30 days to challenge the validity of the debt. The collector can assume the debt is valid if they do not receive a challenge.

Then the collector may legally begin to call you at work, at home, and may even call a neighbor to try and locate you. During this same period of time, the collection company will most likely send a notice to the major credit reporting services that they have been assigned a collection account against your social security number.

Once this collection is on your credit bureau reports, your credit scores (the numbers used to decide if you get a loan, and at what interest rate) will tumble. A low score means it is difficult to qualify for any type of loan. Those loans that are given to you will have a very high interest rate. Even if you don't owe the money, the collector may proceed with the belief that you do, and could have their attorney file a lawsuit against you. If you fail to respond properly to the lawsuit, you may end up with a legal judgment against you. If a judgment is entered in a court of law, the bill collector can then garnish your wages, or legally seize money from your checking or savings account.

Q: Can a bill collector call my employer?

A: Under the Fair Debt Collection Practices Act, a bill collector may contact your employer once, and only to confirm your employment. They may not disclose to anyone that they are calling from a bill collection company, or that they are trying to collect a debt.

Q: Can I stop a bill collector from contacting me?

A: The simple answer is yes. There are 3 ways to do this.

1. Retain a lawyer, he or she will send the collector a notice of representation. Once this letter has gone out, the bill collector may only deal with the attorney
2. You can advise the collector in writing that you demand they stop contacting you. However, the bill collector may then file a lawsuit; or
3. Within 30 days of receiving the initial letter, write a letter to the bill collector, and challenge the validity of the debt (make sure you keep a photocopy of the signed letter you send). Make them prove you owe the money!

Q: What Scams should I be aware of?

A: The Wall Street Journal makes clear how large a problem credit problems due to theft are!  Some individuals who have had their credit identity stolen have suffered years of Abad credit. They suffered even though they had done nothing wrong.
 
After a theft occurs and before you know it happened, thousands of dollars may be spent by the thief. There are a number of ways that a thief may have obtained you credit information. Below are some of the most common scams used, and suggestions for what you can do to protect your good credit name.
 
SCAM ALERT:
 
Phishing
 
This is an internet scam where the thief sends out an e-mail that appears to be from a bank, or some other institution.  Often the e-mail includes a warning about Aphishing@ and states that you need to confirm your account information to protect against such an attack. 
 
The e-mail then provides you with a click on link that appears to direct you to the bank.  Unfortunately, the link is directed to the thief.  The thief then uses your account information to remove the money from your accounts, and may get and run up credit cards in your name.
 
The Secret Settlement
 
New parents receive an E-Mail from a source which appears to be a large organization.  This E-Mail tells the new (and sleep deprived) parent that they have been chosen to receive a U.S. Savings Bond for their new child as part of a secret settlement agreement between a baby food maker and the U.S. Government.
 
To receive this savings bond (usually $500.00), the parent must provide their baby's social security number.  In some instances, the scam artist will even Arequire the parent's social security number, claiming this is  needed to issue the bond.
 
The Facts: There is no Secret Settlement. Court filings are a matter of public record.  The government does not enter into A secret settlements in civil cases where the public safety is involved.
 
Once the scam artist receives the Social Security numbers, he or she will simply resell them, or use them to obtain credit cards.  In either event, you will not receive a savings bond.
 
The Nigerian - Bank Transfer Scam
 
The person who is the target of this scam receives an e-mail or a letter from a person claiming to be a government minister, purporting to represent a Nigerian oil cartel.  Often times the target person is a small business owner.  The e-mail or letter goes on to say that the cartel needs to have a Apartner in the United States to facilitate bank transfers.  The letter then tells the target that they have the opportunity to make many millions of dollars by allowing the cartel to use the readers bank account.
 
In order to take advantage of this once in a life time business arrangement, the reader must send the cartel checking and savings account numbers so that the transfers can begin immediately.
 
The Facts: Governments and multinational corporations do not transfer money through small business owners checking and savings accounts.
 
Once the scam artist receives the savings and checking account numbers, they immediately send a wire transfer order to the bank and take all of the money out of the victim=s savings and checking account.
 
On-Line Billing Scams
 
This scam evolves when an internet user receives an E-Mail from someone claiming to be from the billing department of the reader's internet service.  Most of these E-Mails are so easy to tell that they are fake, they get erased immediately.  However, the basic message is something to the effect that the reader's On-Line service had a computer crash which resulted in the credit card information on file for billing being lost.  The message then says that the reader must provide this information immediately, or the serviced will be terminated.  Often, there is a hyper-link for convenient click-on responses.
 
The Facts: The hyper-link click will not be to the readers on-line service billing department.  Depending on the thief, the reader's credit card information will be used to secure other credit cards or for significant expenses.
 
Credit Card - ATM Theft
 
As technology becomes more sophisticated, credit thieves no longer are forced to rummage through trash to find documents with card numbers or social security numbers.  A favored trick of the thief is to pay an employee of a store or a restaurant for each number provided.  To do this, the thief has a swipe-reader which the employee will run the credit card through.  The reader then records the data stored on the card, and it is down loaded later.
 
Often, a persons social security number is used as an account number for health insurance, and a thief can easily steal the information out of a mail box.
 
This type of identity theft is virtually undiscoverable, until bills begin to show up at the house.
 
Balance Billing
 
Many consumers today have their health insurance with a Health Maintenance Organization (HMO).  These HMO agreements say that the health care provider may only bill the patient for the co-payment amount (usually shown on the insurance card).  By law and by contract, if the service is a covered service, the hospital or doctor may not bill the patient for any sum of money in excess of the co-payment amount.
 
The Facts: Many healthcare providers struggle to replace shrinking income streams, caused in part because of managed care contracts.  Because of this, many providers unknowingly violate state and federal laws for Fair Debt Collection Practices, by Balance Billing - asking the patient to pay for a portion of their bill over the co-payment required by contract.  If you are covered by an HMO contract, and receive a bill from a health care provider, remind them in a letter that you have paid you co-payment.  And make sure your HMO receives a copy of your letter, they can help you resolve this dispute.
 
Always make sure your letters are signed, and ALWAYS keep a photocopy of the letter!