April 26, 2012

The Zombie Debt phenomenon as it has recently been called by some accordingly includes significant investors who buy old debt and rely on the consumer’s ignorance of the law to pay – especially a debt that may no longer be enforceable or was never a lawful debt obligation to begin with. This is getting up there with the subprime fraudsters of US fame who pushed the debt envelope a bit too far.

If this is true, then this practice should be investigated by the provincial and federal regulators as the practice appears to be unlawful at a massive scale – purposely pursuing people to pay debts they do not owe.

Provincial debt collection authorities need to take debt collection harassment more seriously. The first case I cited in Zombie Debts Part I referred to a bank that simply refused to acknowledge the debtor’s right to dispute or question the legality of the debt. More and more provincial debt collection regulators have backed away from enforcing any debt collection harassment legislation against any other party except a collection agency. They claim they have no authority over banks and any other collectors who do not require a licence. (Only third party collectors like a collection agency require a licence.)

I submit this is a flawed interpretation. The government sets standards for all to follow. That is called the public interest. Harassment is harassment whether inflicted upon a debtor by a licensee or by a principal creditor collecting its own debts. You cannot have one standard for one group and no rules for another. Governments can pursue debt collection complaints against anybody. They can bring the abusive practices to the attention of the various offenders, conduct public inquiries, make determinations and publish industry guidelines that apply to all.

In the second case I cited in Zombie Debts Part I where the creditor kept reassigning the disputed debt and failed to produce evidence that the card holder authorized the purchase, the consumer did file a complaint with a provincial debt collection licensing authority. The licensing regulator verbally told them to go to court. There was no investigation or review of the evidence provided or enforcement against even the licensee – and there were three ostentatious violations not just one…

Other debts found under the Zombie Debt umbrella are those discharged by a bankruptcy, debts never owed due to errors in reporting and debts due to identity theft. This raises the issue of credit reporting. There needs to be stiffer penalties against offending creditors who repeatedly report inaccurate information that harm consumers.

If you are a victim of a Zombie collection then here is what I recommend:

1. Get the name of the collector and the name of the company. If they refuse to give it then refuse to talk to them. You should immediately file a complaint with the provincial debt collection regulator about the collector’s refusal to identify themselves if this should happen. This also ensures that the company is properly licensed.

2. Ask for proof that the money is owed. That may include the merchant’s authorization slip. If the colelction agency cannot or will not supply this, then file a complaint with the regulator and demand that no further calls/letters be made to you without proper evidence of the debt.

3. Record the number of calls/letters you receive and the times and dates.

4. Complain, complain complain – to the debt collection regulators.

5. Consider legal action if harassment does not stop.

Remember, if you are experiencing financial difficulties do not wait. Call Solutions Credit Counselling at 1(877)588-9491 or fill out our Debt Consolidation Questionnaire and get your Free Credit Counselling Advice today.

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