Background

• Collection agencies purchase old debt from creditors for cents on the dollar or are hired by creditors to take over on collecting open debts. There are many reasons why a collection agency is incorrectly contacting you. Sometimes mistakes can happen during the transfer of information to the collection agency. Other times, identity theft is involved. Sometimes unscrupulous collection agencies will pursue people they know are not responsible for the debt in the hopes that they will receive even a small portion of the debt.
  
  

Dispute the Collection

• Regardless of the reason, if the debt is not yours, the collection agency has the obligation to investigate the legitimacy of the claim. Under Fair Debt Collection Practices Act, if you send them written notice within 30 days that you dispute the claim, they must prove the debt is yours. If they cannot prove the debt is yours, then they must cease pursuing you for the collection. Make sure you get contact information for the company, including name, address, the account number in question and their telephone number.
  
  

Dispute Letter

• According to a consumer credit attorney David A. Szwak in an article on Bankrate.com, the letter you send to the collection agency disputing the claim should include several items. It should contain an account of the problem and the actions you expect them to take to resolve it. It should also include your name, address and Social Security number, along with the account number in question. Be sure to make and keep a copy of the letter for yourself. Send the letter via certified mail with receipt requested to the attention of the general counsel or the supervisor of the legal department.
  
  

Credit Report

• If the collection has appeared on your credit report in the meantime, you may send copies of this letter to the credit reporting agencies. They, too, are required to investigate and correct your credit report if it is incorrect. If nothing happens, or the collection agency insists to the credit reporting agency that the debt is valid, then you can file a statement to all three major bureaus --- Equifax, Transunion and Experian -- that will be attached to your credit report. The statement should explain the situation from your side. It may help to alleviate some of the negative damage caused by the false report, especially if the rest of your credit history is good, but it may not help repair your credit score.
  
  

Lawsuit

• Your last, and most expensive, resort is to sue the collection agency, original creditor and credit reporting bureaus. You could win punitive damages, monies to compensate you for any losses you experienced form the false reporting along with attorney's fees. An attorney who specializes in consumer credit cases is your best bet. You can find one through the National Association of Consumer Advocates.