Dealing with collection agencies is seldom a pleasant experience, but it is often unavoidable if a consumer owes an old debt. However, once a consumer pays off the creditor, the collection activities should stop. While a creditor should contact a collection agency to notify it that the consumer paid the debt, this does not always happen. If the collection agency's calls and letters continue, a consumer needs to take action to make certain the creditor properly reported the payoff of the debt and to get the collection activities to cease.
Check Credit Report
When a consumer pays off a debt, she should make certain the debt was properly marked as paid on her credit reports. Though the failure to update a credit report may not influence whether collection calls continue, the calls may be a sign that the creditor has not properly updated its internal records and has not notified the collection agency or credit reporting bureau of the payment. A consumer should check her report from all three major credit reporting bureaus: TransUnion, Experian and Equifax. A consumer can obtain a free credit report each year through the AnnualCreditReport website.
Notify Creditor
A consumer receiving debt collection letters or calls for a paid debt should notify the original creditor of the collection contacts. She should call the creditor and send the creditor a letter requesting that the creditor have the collection agency stop making contact. The consumer should provide information to the creditor on both the paid debt as well as the contact information for the collection agency. She also should provide information on the collection activities. For example, a consumer should send copies of collection letters and dates and times of phone calls.
Notify Collection Agency
In addition to providing information to the creditor, a consumer should send information regarding the payment of the debt to the collection agency. She should be careful not to disclose any new personal information to the collection agency, as this could make the problem worse. Once the collection agency receives the letter, it must send verification of the debt to the consumer before making any other collection efforts.
Further Action
If the consumer's credit report does not show the paid debt as paid, the consumer should follow the credit reporting bureau's policy for correcting information. A consumer should report continued collection calls about a paid debt to her state's attorney general as well as the Federal Trade Commission. In extreme cases, a consumer can sue a collection agency that continues to contact a consumer about a debt that has been paid. The original creditor also may have a legal liability for failing to notify the collection agency of the payment of the debt. The Fair Debt Collection Practices Act allows a consumer to sue and obtain financial compensation as well as recover legal costs even if there were not any actual damages.
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