Monday, February 12, 2007


Under federal and state law you are not responsible for debts incurred by fraudsters and identity thieves. The mailing of a stop contact notice to a creditor, together with a police report of the crime, and an FTC approved identity theft affidavit provides the needed notification to the debtor that a fraud has been committed. Debtors usually cancel the debt after a short investigation.

However, this does not mean the end of collection headaches for a proven fraudulent debt.

For example the collected bad debts of a credit card issuer or merchants may be packaged in bundles of debt and sold to debt collection companies. After some time these bad debts may be packaged and sold again. And then sold again.

Each new collection company may have no record of the status of the debt as fraudulent.

At KnightsBridge Castle we very often see debts that have been acknowledged as fraudulent and forgiven by the debtor, show up in the new collections efforts by collections companies – regardless of the status of the debt as a proven and accepted fraud.

It is critical that you keep written copies of all correspondence regarding the cancellation of a debt. Never fail to follow up a phone call to a debtor with a written notice of the fraudulent charges – even if the debtor says this is not necessary. Do not rely upon “fraud alerts” “information postings” or other notices with the credit rating companies for protection. Credit collections companies who purchase bundles of supposed “bad debts” pay little or no attention to the records of these companies. There only goal is to get money from you – regardless of the proven status of the fraudulent debt.

These fraudulent debts can show up time and time again. And each time you may need to provide copies of the original correspondence about the fraud to stop collections companies from harassing you.


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