Alabama Consumers Sued – The Role Of Your Credit Report – Part III


In our first part we gave an overview of why you need to pull your credit report when you are sued in Alabama by a debt buyer and in our second part we discussed looking at your credit reports to see what the junk debt buyer is saying about the age of the account. In this part, we will discuss the critical importance of checking your credit reports to see if the debt buyer is reporting the account on your credit report with a “dispute” comment.

Debt collectors, which include debt buyers, can report accounts on your credit report but they must do so accurately. Part of this means that if you have disputed the correctness of the debt (preferably in writing but probably also just over the phone) and then the debt buyer “updates” your credit report, it must show the account as being “disputed”. If it does not, it has most likely violated federal law – Fair Debt Collection Practices Act (FDCPA) and state law.

Let’s look at this in a little more detail.

How do you dispute a debt? One way is to send in a letter simply stating, “I dispute the accuracy or validity of this debt.” Normally debt buyers or collectors will not show the basis of the amount they are claiming or will otherwise fail to give you enough information for you to determine that the amount claimed is correct. If that is the case, you have the right to dispute it. Whenever you send in a letter to a collector or debt buyer, make sure you do it by certified mail and keep a signed copy so you can show what you have done.

Another way to dispute a debt, in particular when you are sued, is to file an Answer to the suit denying that you are liable to the debt buyer. Remember that the debt scavenger must show at trial that it owns the debt and that you owe the debt. When you file an Answer with the court denying liability, this certainly seems that it would put the debt buyer on notice that you are disputing the debt. You may also want to dispute the debt by sending the debt buyer a letter as described above.

OK – so you’ve disputed the debt – what is the next step? You need to pull your credit reports to see if the debt buyer has updated your account or your “trade-line”. The safest approach is to wait until the debt buyer has sent new information to the credit reporting agencies. When that happens, you can see if the debt buyer has said the account is “disputed by consumer”. If the debt buyer does not, then that is a violation of the FDCPA and state law. You probably will want to wait about 3 months to pull your credit report to give the collector or debt buyer the opportunity to update your account. Some update monthly and others do so on a quarterly basis.

The significance of the account being marked as “disputed” is that certain lenders give a different weight or importance to collection accounts that say “disputed” because they understand a debt buyer or collector can simply slap an account on your credit report and it often is false. So, if you dispute it, this shows that you do not agree you owe the money claimed by the collection agency or the junk debt buyer. Congress decided in the passing the FDCPA that this was so important that it required collection agencies or debt buyers to put this dispute comment on accounts.

If you have disputed the debt but the debt buyer or collection agency is updating your report without showing it as being disputed, you should consider contacting a consumer lawyer to help you. We will be glad to have a free consultation with you if you live in Alabama and, if appropriate, we will file suit on your behalf against the debt collectors or debt buyers who are violating the law.

Our final post in this series will be on what should happen to your credit report when you win your trial against the collector or junk debt buyer. As always, if you have any questions, please let us know.

Another resource for you is to join our Facebook Fan Page – Alabama Consumer Protection Attorneys where we share useful information about the same types of issues that we cover in this blog.

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