Editorial Policy

Know your rights with creditors

Erica Sandberg

March 13, 2015

QHi Erica,

Can someone keep calling me about a debt even though it is not even on my credit report any more? It was for a Visa I had a long time ago. It's going on 11 years and I still get calls about it. I just got one, but I didn't pick up because I knew it was the collector. I want to be sure of the law before I tell them never to call me again. I live in Utah. –Robert

ADear Robert,

As long as the collector follows the behavioral restrictions laid out in the Fair Debt Collection Practices Act (FDCPA), he can dial your number and ask for the money. Among the things he can't do: Call before 9 a.m. or after 9 p.m., threaten you with a lawsuit unless he plans to follow through or use abusive language.

You see, even though the account is no longer appearing on your consumer credit reports, the balance remains outstanding. By law (this time the Fair Credit Reporting Act), negative information such as unpaid debts in collection must drop off the reports seven years from the date of last activity. However, the current owner of the account may continue to try to get the funds from you — that is, until you formally tell them to stop calling and writing.Ask Erica

There are only a few circumstances when I would advise people to give a creditor the heave-ho, but all are presuming that they truly can't pay the bill. It's hard to believe I have to type this out, but it's always best to satisfy a debt that you legitimately owe, no matter how old it is. If you borrowed the money, you should pay it back. It's that simple.

However, it's not always that cut and dry.

When the original card company couldn't get you to make a payment, it sold the delinquent debt to a third party — the collection agency. By doing this, the card company was able to recoup some of the money owed and write off the rest. The collector that initially purchased the account may have sold it to another agency when it couldn't squeeze a payment out of you either, and then others might have come afterward, each giving it a go.

Eventually, the waters of moral obligation become rather muddied. After all, the entity that holds it now might have bought the account for a tiny fraction of its true value, yet is hoping you'll send the entire amount due. Its profit would be enormous. And, sure, your conscience would be clear, but it's not as though the original company would benefit — the bottom rung agency just got lucky. Then again, it took a risk in buying the debt when others failed, so …

Nevertheless, you're not asking what the right thing to do is, but if it's wise to tell the creditor to stop contacting you. The answer to that is almost certainly yes.

In Utah, where you live, a collector has six years to sue a debtor — not from when it received the debt, but from the date the card company charged it off. Because it has been 11 years since that time, the statute of limitations has long run out. For this reason, you're safe from a lawsuit that almost certainly would result in a judgment being placed against you.

The next time the collector calls, pick up the phone. Assuming you have no intention to pay, inform him that you know your rights under the FDCPA. Explain that you do not want to receive any more calls or letters and to consider this a cease-and-desist notice. Ask for the name and address of the company and follow up with a letter so you have a record. After that, the collection agency can only do one of two things: leave you alone or take you to court. Since legal action is not its option, you're in a protected position.

And if it still reaches out after that? File a complaint with the Federal Trade Commission. The company may be fined for breaking the law — and you'll possess proof with a copy of the letter.

Got a question for Erica? Send her an email.