The Stale Debt Scam
Is a debt collector calling About a stale debt that is really really old?
Have you ever received a debt collection call from a bill collector for an 8 year old bill from that you don’t even remember owing? You may be receiving a stale debt call! Maybe it’s a bill collector calling you about some medical charge from a hospital in Fort Worth in 2009….but you didn’t even live in Texas then and can’t remember the last time you’ve been to the doctor, let alone a hospital! Or maybe you do vaguely recall something, but you weren’t sure if the balance got paid or if the charge is even legit.
A common bill collector tactic is to call you about a bill that is “stale” and past the statute of limitations. Texas has a 4 year statute of limitations. Washington State has a six year limit if the contract was in writing, otherwise it’s 3 years. So let’s pretend you got this call. They are saying you owe $5,000 for a hospital visit and that you must pay it immediately. If they’ve got a judgment different rules apply, but let’s assume they haven’t gotten one. Instead, they are calling you about some $5,000 charge for which you’re not even sure you owed. What do you do? More likely than not, it’s a scam.
Here’s how the stale debt scam works.
First off, the debt collector will demand that you immediately pay the whole balance. They will threaten you & claim that they will report you to the police & will claim that you are going to jail. Sounds scary, right?
So is this legal? No. Is this a violation of the FDCPA? Almost without question. Does this mean that you could sue them under the FDCPA? Yes. But, do debt collectors still do this scam anyway? Unfortunately, yes. I’ve personally listened to debt collector calls and heard the debt collector tell my client these kinds of things with me in the room! No, they didn’t know I was there. After you tell the debt collector you can’t afford to pay the whole balance, they then “back off” and for a smaller amount, like $500. You think, “I don’t even have my rent money yet!” So you tell them no, you can’t afford that amount. So they’ll keep going to a smaller and smaller amount. First $200… Then $100… Then $50. And then here it comes…
They’ll ask for a “good faith” payment. Just $5. They want you to pay just $5 to show that you are working with them in “good faith”. They will pressure you and you’ll feel like you should do it. The pressure will feel enormous. So should you pay the $5? NO! If you pay the $5 you’ve “reinstated” the debt! It’s a scam debt collectors pull to then get you back on the hook for the whole amount when had you not paid anything, you wouldn’t be liable at all!
It’s a sad sick game they play. Don’t be fooled. If you get a call like this, do yourself a favor and take a time out. If it smells fishy, there’s a good chance it is. Demand evidence. If you think they may be legit, talk to a lawyer and take your evidence with you. Usually any debt or creditor attorney can tell you if you are really on the hook.
If you run into this scenario, let us know. Also consider calling the Consumer Financial Protection Bureau (“CFPB”) and filing a complaint against them. The CFBP tracks this stuff and if you file a complaint, they will pursue it. Get the power of the federal government on your side…it’s a nice advantage to have!