A collection agency in Arizona has been seeking to collect a debt ($500 approx.) they say my son, a U of A student, owes to a property management company. I sent a return receipt letter requesting validation of debt and an itemized bill. Collection agency responded with a copy of a lease agreement he HADN'T signed--his roommates signed it prior to his arrival--and a bill stating, "Amount Referred" and "Other Charges"--the collection fee, which was 35%. So, although they told me what my son owes, they didn't identify what they're charging him for; and, without a contract signed by my son, they don't seem to have validated his debt (or the right to charge a collection fee). In situations like this, do collection agencies "fish," hoping someone will pay? Or do they follow through by reporting the debt to credit reporting agencies? If they do, are they vulnerable to penalties?
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If your son has not signed the loan agreement, he is not responsible for the debt and the creditor can do nothing to recover it. If they report the debt to the credit bureaus, you can dispute it with the bureaus and get it removed from your report. Now, if you cannot get it removed, file a complaint against the company with the Federal Trade Commission.
Since your son has not signed the loan agreement, the creditor cannot even bring a judgment against you to recover the debt.
Can collection agent ding credit hx w/o debt validation?
Wow! Thank you, Carol. Is there anything more I need to do to "nail this down"? Any further communication I need to send to the collection agency?
I don't think that you need to contact the collection agency when your son is not actually responsible for the debt. Even if they take you to the court, they cannot prove that your son owes them money because he did not signed the loan document. However, if you get a summon from the court, you should file and answer to it to save yourself from default judgment which the creditor might bring against you.
Can collection agent ding credit hx w/o debt validation?
Thanks, Mary. The collection agency says that, because the creditor (property manager) listed my son on account statements--he DID live there; he moved in after the lease had been signed by others--they can collect on the debt despite the absence of a contract signed by him. Is this true?
What I think is that, even if your son stayed there, it is not sufficient to conclude he has made the debt. The creditor must either prove that he has signed the loan agreement papers or the creditor has directly credited the money in his bank account. If the creditor can prove that they have deposited the money in his bank account, then they can initiate judgment against your son to recover the same.
lease agreement
I signed a one year lease with my daughter (college student). Her roommate and her parents also signed the lease (4 peope total signed). Eleven of the twelve months were paid in full. The last month only half of the rent was paid because the roommate moved and did not pay her portion. We paid our half of the rent and have canceled checks for all twelve months of our payments. The collection agency for the apartment complex is now charging all four persons on the lease for a list of fees because they say that the lease was not fulfilled and that us not paying the full amount will affect our credit. Can I be held responsible even though I sent them a letter the final month stating that this was my payment in full and the other tenant was responsible for their portion?