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How Do I Know If a Collections Agency is Real?

Ask Savvy: How Do I Know If a Collections Agency Is Real?


Dear Savvy,

I just received a letter from a collections agency (RJM Acquisitions) for an overdrawn checking account. It says the date account opened was 12/14/01. I had gone through some rough times and around that time had defaulted on two credit cards. A couple years ago, two different collection agencies contacted me on those and I paid them off. When I look up this company online, Rip Off Reports and such are pretty much all that come up, so I feel like this might be something fishy. My question is this: What do I do to confirm this is real and legal? I don't have any bank records or information from that time.

See my answer when you read more.

I can see why you might be smelling something fishy with this situation — a Google search only reveals countless consumer complaints about the company and its history of scamming. It appears that RJM buys junk debts and then claims to be the new creditor for the owed debt. From what I can tell, what they're doing isn't legal — a new company can't assume old debts and call themselves the creditor.

It seems RJM has a pattern of buying debts past their statute of limitations dates and then resetting them; if the debt is in fact out-of-statute then the account has already been written off by the creditor. You need to check your credit report to see if they have reported your old debt with a new reset date and restarted the clock on it, which means even if you pay them it will stay on your credit report as a paid collection for 7 years. If the debt from 2001 suddenly appears on your report with a current date, it's time to take action.

According to the Federal Trade Commission (FTC), a debt collector "must send you a written notice telling you the amount of money you owe; the name of the creditor to whom you owe the money; and what action to take if you believe you do not owe the money." Find out these details and ask for proof that you owe the debt and review the FTC website for more information about your rights.

If the debt isn't yours (or if it is yours but the statute of limitations has expired), file a dispute with the credit bureaus reporting the debt. You should also send a letter (without your signature) to RJM letting them know that you are aware of your rights under the Fair Debt Collection Practices Act (FDCPA), and because the statute of limitations for this debt has expired you are disputing the matter and request they don't contact you again.

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