A significant number of New Jersey consumers have enough financial issues without having to deal with so-called phantom debt. As the name implies, this debt does not exist, yet companies are calling consumers and saying they are being sued and need to take action. The federal Fair Debt Collection Protection Act (FDCPA) provides that consumers can stop harassing phone calls from creditors looking to collect phantom debts, as well as real ones.
Companies that contact consumers about phantom debts are in violation of the Act since it precludes debt collectors from lying to consumers. Under the FDCPA, debt collectors are not allowed to even intimate that they are going to file or have filed legal action against a consumer when they do not intend to do so. Debt collectors are also not allowed to falsify or misstate the amount a consumer allegedly owes.
The Federal Trade Commission has recently taken action against companies that go after consumers for non-existent debt. Some 3,000 complaints regarding these apparent scam artists were received by the FTC, prompting it to take action. There have been consumers that have sent money in the belief that these were legitimate debt collectors.
Whether a debt is real or not, New Jersey consumers have rights when it comes to debt collections. It may not seem possible to stop harassing phone calls from creditors, but it is. Further, if a creditor goes beyond what is permissible under the Act, consumers do have avenues of relief. No one has to tolerate being treated poorly by a debt collector just because they happen to be struggling financially. Further, financial struggles do not have to be a way of life; there are debt relief alternatives such as bankruptcy protection that are designed to give people that are having financial difficulties the opportunity to responsibly confront the underlying issues while laying the groundwork for beginning anew.
Source: Forbes, Phantom Debts: How To Avoid Zombie Debt Collectors, John Wasik, Oct. 30, 2013