DennisBeaverMay 28, 2011 (Original publish date) • By Dennis Beaver

“I have been receiving calls from an unpleasant bill collector about a department store account that is almost 4 years old. What should I say? What if I do owe the money, or might owe the money – but it has been so long, right now, I don’t really know for sure. Thanks, Susan from Santa Maria.”

Who really is calling? Can they validate the debt

Former bill collector turned author Ed Lewis ( hears this question daily. We have known him for more than 10 years, and he always stood out as being honest, and helpful, thereby earning a high 6-figure income in the process. Lewis believes that far too many bill collectors wind up hurting themselves financially by having a lousy attitude.

“Listening and being helpful is money in a collector’s pocket because they earn a percentage of what is collected. Over time, nice is better than nasty, and it’s the same for the people we call. If we call you, being a jerk isn’t in your best interest,” he believes. We agree.

“How you handle our phone call or letter can have a tremendous influence on so many things, from the debt just going away to settling it at a fraction of what might really be owed and having it deleted from your credit report.

“But you need to protect yourself. Who really is calling you? Are they legit? You need to validate the reason they are calling. You want to be sure they can prove to you that it is your debt, and that you actually owe the money,” he cautions.

Lewis outlined the information which you need to obtain, beginning with what collectors refer to as “a full validation of the debt.”

“You have an absolute right to copies of contracts with your signature, credit card statements, any type of itemized statement of the account showing where the balance originated from. But watch out for them sending you a forward balance statement.

“This shows the balance due, but not where it came from or where it was obtained. This is not a clean validation – it does not validate the debt. You are entitled to a detailed statement of all charges and where they originated. Do not accept anything less.

“Always get the collector’s name, the company name, their in-house reference number for the account they claim you owe, their phone number, their address and fax number. If this is not provided, you may be dealing with some form of identify theft.”

Why you should always dispute the debt

Lewis believes that it is “absolutely critical and at all times that you tell the caller, ‘I dispute the debt.'”

“But what if you feel that something really is owed?” we asked. “Isn’t this getting into the grey area of morality?” His answer made perfect sense and was reassuring.

“When you tell the caller that the debt is disputed, they are going to ask you to explain. Do not answer. You do not have to tell them a thing. Your response should be a polite, “I will reply in writing to you. Please do not call any more, but communicate with me in writing only.

“This will impress upon the collector that you know your rights, something like the old saying, ‘Locks keep honest people honest.’ By being polite, revealing that you are an educated consumer, this greatly increases the chances that the account will be resolved in a manner which will not damage your credit. Collectors are a bit afraid of consumers who know and insist upon their rights being respected, typically treating them much better.”

After you hang up

That phone call from the collector is just the first step in what can “turn what most people consider as an unpleasant situation into something which can actually help your credit report in very important ways,” Lewis told us. “But,” he added, “once you hang up, now the ball is in your court, and you need act.

“This means either sending a fax or certified letter to the collection agency which again states that the account is disputed, that you are requesting validation of the debt, and that, under federal law, this must be accomplished within approximately 30 days of their receipt of your request.

“If they cannot either validate the debt, or accomplish this within that time frame, they must report this as a disputed account, or request its deletion from the three credit bureaus. And you want to put that language in your letter as well,” he stressed.

So, you go through all of those steps and they do indeed validate the debt. It’s yours, all right, so, now what? We’ll have your credit report clean-up answer next time.

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.