Disclaimer: This is not legal advice. I may be familiar with some laws, but I’m not a lawyer. If you want legal advice about debt collection, find a good lawyer and pay the fee. Once you pay the fee, your lawyer has a fiduciary duty to serve your interests. This article is for educational purposes only.
What would you do if you got a debt collection notice and you believed that you didn’t owe the debt? How would you respond?
Why, if it were me, I’d write letters contesting the notice. I actually had this happen to me in the last few months. Late summer last year, I visited a clinic with my family, and January the next year, I got a call from a collection agency. “Is this Scott Dunn?”
“Yes, it is. How can I help you?”, I said.
“I’m with the Buttermaker Collection Agency. I’m calling to collect a debt.” (The name has been changed to protect the innocent collection agency.)
“I see. What is this debt about?”
“We are collecting a debt in the amount of $370. Did you get our letter?”
“No, I did not.”
“I think we have an incorrect address. Could you give us your current address?”
So I gave them my current address. “Just send the bill and I’ll pay it,” I said.
A few days later I got a demand letter in the mail. The letter had nothing in it that I could use to verify the debt. The health care service provider was identified, but there was no date of service. Oh, this is a medical bill. The account number provided did not correspond to anything I had seen in the past. I found numerous issues with their demand letter and wrote a letter in response, with a list of “deficiencies”, and a request for more information.
To ensure that we didn’t get into a phone conversation about the debt again, where I might say something careless, I closed my letter with the following statement:
“Please also note that all future correspondence concerning your efforts to collect a debt will be in writing.”
It’s important to understand something about debt collectors. They are hired by someone else to collect a debt. They intend to use every legal (sometimes not so legal) means to collect that debt. They are in the debt collection business to make money.
So when I’m talking to a debt collector, I’m thinking about all the advantages that a debt collector has on their side. They’re recording the call. They’re sitting at a computer taking notes. They’re following a script that tells them what to say and when. And that script has been vetted by attorneys.
I used to be the IT guy for a small, but very successful debt collection agency, so I am somewhat informed about how they work. I know that when they talk to me, they’re not on my side. They are exercising a fiduciary duty and that duty is not to me, it’s to their customer.
That is why I make sure that when I get a call I tell from a debt collector, I tell them on the first phone call that I want to discuss this matter in writing. Not all of us have good hearing, and I fear that will only get worse with earbuds and headphones. Not all of us have perfect recall of what each party said, and the files on my computer have perfect recall. And if I told them that I was recording the call, they’d hang up, anyway. They’re OK with recording as long as they’re the only ones doing the recording.
Sometimes they tell me that it won’t take long to discuss. Really? Then it won’t take long to write a letter and send it to me.
So I need to bulk up on advantages I can build for myself. I need to be ready to write. I need to avoid phone calls with the collection agency. I need to build a paper trail. Lawyers love paper trails. So I do all correspondence with debt collectors in writing and I make no exceptions, even if I think they might be right about the debt.
After my first letter, the collection agency replied with actual records of my visit to the clinic in question. I now had a date of service to work with. They sent me a copy of the new patient agreement that I filled out on that day, and that appeared to be proof that I was there. But even with a date of service in hand, I checked my records to see if there were any corresponding records.
I found no record of an insurance claim that corresponded to the date provided by the collection agency. I did find a transaction on my bank statement, with the same date as the date of service, with that service provider, with a $20 copay. So I admitted to being there, on that day.
The collection agency provided a copy of a transcript, a record of how the service provider was tracking the billing and payments. I reviewed that transcript and found that they had made a data entry error, and that would explain the incorrect address. I also found that the amount in question on the service provider’s records was not the same as what the collection agency was demanding. The service provider transcript, combined with my insurance and bank records, made it plain to see that the service provider either failed to file a claim with my insurance, or did so, but with errors that made it impossible for my insurance company to process the claim. That would explain why there was no claim on my records.
I wrote back explaining all of the above. I provided a copy of my transcript from my insurance carrier to show that there was no claim ever received by my insurance carrier from the service provider with a date of service that corresponded to the date of service in evidence provided by the service provider and the collection agency.
I told them, in my letter, that I admitted to visiting the service provider, but that my claim was never processed. I also told them that the service provider made administrative errors that were beyond my control, and that this issue should be resolved at no additional cost to me. I also told them that since I paid my $20 copay and did my part by presenting my card at the time of service, I had a reasonable expectation that a claim would be properly filed. And that is where I left it.
Now I could have written a check and been done with it. But I knew they were wrong and I made the best possible case that there was an error, and that I should not be paying for the service provider’s error. It was worth the time and effort to me to investigate the debt collector’s claims and rebut them. I had fun doing the research and writing the letter. I love this stuff. Well, not as much as I like playing with my kids. But I do enjoy writing articles, even if I’m defending myself against a wrongful debt or even an incorrectly demanded debt.
Plus, I did it all by old fashioned mail. Now I have a record of all of my actions, their letters, and their actions. I know that I did the best I could with what I had available to me. And because their is a paper trail, if they decide to litigate in small claims court, I can show that I made a good faith effort to determine the facts of the debt claim before paying the debt.
I follow a few basic rules with debt collectors:
- No phone calls.
- All correspondence will be in writing.
- I do my own research.
- In my correspondence with any collection agency, I rebut every claim as well as I can.
- I keep a record of everything.
I did everything with Columbo patience, too. I raised doubts as to the veracity of the collector’s claims. I raised questions to get the collector to provide proof of a debt. And then I examined the proof provided to see if there was any corroboration from own records, which I found. I admitted correspondence where I found it and made allowances for the truth. If there is a debt, I will pay it, but I want to be sure that I really owe this debt before I pay it.
This isn’t finished yet. I will write a follow up to show how this effort concludes.