Midland Credit Management “Final Notice” Letters

If you have received a collection letter or series of collection letters from Midland Credit Management, Midland Funding, or any other company that make false legal threats or deceptive representations you can fight back. Midland Credit Management, Midland Funding, and other related companies are blanketing the country with threats and statements that are sometimes false. These threats and statements include:

  • “Final Notice”
  • “Attorney Review Planned”
  • “Failure to Reply Will Result in Attorney Review”
  • “Pre-Legal Notification”
  • “Act Now: Attorney review may be the next step”
  • “Final Notice Extension”
  • “Pre-Legal Notice”
  • “Avoid the planned attorney review”

In many cases these are false threats to take legal action that violate the Fair Debt Collection Practices Act. In other cases claiming a letter is a “Final Notice” when it actually is not is deceptive and unfair. Midland Funding and Midland Credit Management are part of a larger corporation that collects billions of dollars every year. They do so through illegal threats and deceptive statements but also use the court system to sue consumers. Even so, these threats may be considered false, deceptive, or unfair under federal law.

Midland Credit Management, Midland Funding, or other similar companies may also be reporting the debt in your credit reports. Even if you paid them the account could continue to report. A good debt collection litigation attorney can usually get the account removed from your credit report as part of the settlement process.

Midland Credit Management, Midland Funding and their parent company Encore Capital were all sanctioned by the federal government in 2015 for illegal debt collection tactics. That obviously did not stop them from seeking other ways to violate the FDCPA.

In many cases Midland Credit Management, Midland Funding and Encore Capital’s other companies collect debt without the paperwork required to prove the debt is owed or was legitimately purchased by them for collections. Without proper documentation they should not be able to prove their cases but because most consumers never appear in court or answer the complaints against them, default judgments are entered. When that occurs Midland Credit Management and Midland Funding still win the case. It’s sad but true.

In many cases you can fight back and not only win your case and never pay the collection account, but also make Midland Credit Management, Midland Funding or Encore Capital pay you for your damages, court costs, and attorney’s fees.

If you have received a summons and complaint or you are getting these fake final notice letters let us help you. You must act very quickly however. The statute of limitations on cases under the FDCPA is very short. Delays are therefore often fatal to your case. Make this a priority and call us today so these companies don’t get a judgment against you that you could have avoided and maybe turned against the collectors.

Stop Debt Collectors from Seizing your Coronavirus Stimulus Payment

Coronavirus (Covid-19) Debt Collection Problems

Debt collectors are eager to take your Coronavirus stimulus payment. In many cases they will seek to garnish the stimulus money right from your bank account. Congress has not entered any legislation to protect these payments from seizures by debt collectors but there are still a few ways to protect your Covid-19 stimulus payment.

Get a paper check of your Coronavirus stimulus payment instead of using direct deposit

Have the IRS send your stimulus payment, or any other tax refund for that matter, by sending a traditional paper check by mail. That will substantially delay the payment however, so be careful. If you need the money now and it is going to be automatically garnished, get an attorney to file an emergency protective order to protect the stimulus payment from garnishment. When the payment arrives, cash it or take it out of your account as quickly as possible. That would prevent most debt collectors from taking the money in most cases. Use it for the food, medical care, clothing, housing, and other necessities for  which the Covid-19 tax refunds were intended. Even if your bank account is already frozen or being garnished, simply cashing the check will not allow the collection agency to take it. You can check the status of your Covid-19 stimulus payment with the IRS online.

Negotiate with the debt collection agency

Most collection agencies will take your money without any second thoughts. During this Covid-19 panic however, many are likely to be sympathetic to your need for the Coronavirus stimulus payment to go toward food, clothing, rent, mortgage payments, medical care, or other necessities. It can’t hurt to at least try to negotiate time to repay the debt when the crisis ends to to even request a goodwill return of the money if it was already seized.

Its true that most debt collectors, collection agencies, and collection attorneys have hearts of stone and care far more about money than they do about people but some may still do the right thing during this pandemic. If they won’t move on to the options below.      

Object to any seizure of your stimulus check

If you have a garnishment order in place you should immediately file an objection to any seizure of your stimulus check. You may also be able to file for an emergency injunction to prevent the seizure of your Covid-19 stimulus payment. Even if you are trying to negotiate with the collection agency, you must still file an objection or request an injunction.

Coronavirus stimulus payments are supposed to help people pay for necessities such as food, rent, mortgage payments, clothing, and medical care. The Covid-19 payments are not intended to use to pay for past debts. You should therefore object if the money is garnished by a collection agency.

There are likely to be some state protections or exemptions to seizure of stimulus payments issued for national emergencies so check your states laws for other possible ways to argue your payment is exempt from seizure.

Stop collection harassment

Many times the right letter can stop collection harassment. Some debt collectors may also stop garnishments or seizures of your Coronavirus stimulus payment if you send the right letter. Debt validation letters, debt verification letters, and other dispute letters can help stop the seizures. These usually work best before a garnishment is in place but may still be effective if the bank is garnishing your Covid-19 stimulus payment. If you have income that is already exempt from seizure or garnishment such as Social Security disability or other similar exempt income, a properly written exemption notice letter may also get collection agencies to stop a bank garnishment. 

Sue the debt collector

Under the Fair Debt Collection Practices Act (FDCPA) you have a right to sue any debt collector, collection agency, or collection attorney that violates your rights. Although this issue is far from clear, the courts should consider any seizure of stimulus payments to be deceptive, unfair, unconscionable, or abusive. The Covid-19 stimulus checks are meant to help American’s survive not line the already bloated pockets of collection agencies. The money should therefore be immune from seizure.   

Use caution however. Don’t go this route alone. Hire an experienced Fair Debt Collection Practices Act litigation attorney. There is no clear ruling from the courts yet that seizing a Coronavirus stimulus payment violates the FDCPA so you want experienced assistance in making these arguments. 

Contact Us Now for a FREE Case Review

If your Coronavirus stimulus payment was already garnished, seized, or frozen by a debt collector, collection agency, or debt collection attorney let us know immediately. We can help stop a garnishment, file an injunction, negotiate with your creditors, or take other action to protect your Covid-19 stimulus payment check. 

Debt Statute of Limitations in Utah

Breach of contract statute of limitations

By law, a statute of limitations prohibits collection agencies from suing you for old debts. The limitation period varies for different kinds of debt and can be re-started under certain circumstances so never assume a debt collector is barred from collecting a debt under the statute of limitations simply because the applicable time period has expired. Gather your paperwork, review your payment history, review the contract, and contact an attorney before you make any payments or promises to pay if you think the debt might be too old to enforce in court.

Does a debt statute of limitations prevent debt collectors from suing?

The statute of limitations is an affirmative defense so it does not automatically apply or prevent debt collectors from seeking to collect past due debts. It is raised in court proceedings which will stop the debt collection lawsuit if the court determines that the time frame when the debt collector is allowed to file a lawsuit against you has passed. Then, the court will dismiss the case against you. If you are sued for a delinquent debt, and believe the statute of limitations might prevent the collection agency from suing to collect that debt, you must raise the statute of limitations defense when you file your answer. Because it is an affirmative defense, failing to raise it properly could cause you to lose its protections.

Can debt collectors attempt to collect a time-barred debt?

If the collection agency is not suing you but is merely attempting to collect a debt barred by the statute of limitations, things get more cloudy. Generally, the collectors may attempt to collect time-barred debts. But they can’t threaten to sue or make any deceptive representations in doing so. Threatening to sue you when the debt is time-barred or attempting to deceive you into thinking they can sue you when they can’t are violations of the Fair Debt Collection Practices Act which would enable you to sue them for damages.

For example, in a recent case Seventh Circuit Court of Appeals held that Portfolio Recovery Associates, a debt collection agency, violated the Fair Debt Collection Practices Act for using carefully crafted language in a collection dunning letter that attempted to obscure from the debtor that the statute of limitations prohibited the collector from suing or threatening to sue to collect the debt.

It is also a violation of the Fair Debt Collection Practices Act if the debt collector does anything to try to trick you into renewing the statute of limitations. As discussed below, certain acts on your part can reset the time period but debt collectors may not deceive you into taking any of those actions. Most often this occurs when debt collectors attempt to collect zombie debts that are long past the limitations period that were purchased by the collection agencies for pennies on the dollar.

What is the statute of limitations for debt?

In Utah, there are different limitation periods applicable to debt. Which particular statute of limitations applies depends on the type of debt. Generally, the statute of limitations for debt based on a written agreement is six years. Oral contracts and debts incurred for open store accounts for any goods, wares, or merchandise are enforceable in court for only four years. The longest statute of limitations in Utah for debt is an eight year statute of limitations to enforce a judgment.

There are other statutes of limitations in Utah that may apply in less common situations so please don’t consider this list to be exhaustive. And be careful with judgments because judgments can be renewed every eight years which will restart the eight year limitations period.

Is the account open ended or closed ended?

Whether the account is open ended or closed ended is a critical inquiry to determine which statute of limitations applies. Closed ended debt generally refers to single isolated transactions and will generally be subject to the six year statute of limitations for debts based on written agreements. Open ended debts may fall under the four year period for open store accounts but in many cases may fall under the six year written contracts period of time.

For example, a typical car purchase agreement would fall under the six year statute of limitations because the transaction is based on a written agreement. Conversely, a credit card issued by a retail store that may only be used to make purchases from that store will normally fall under the four year period.

The issue is more confusing when a credit card company issues a credit card based only on an application but never obtains a written agreement. Lower courts generally consider the six year period to apply. That outcome appears to be a fairly obvious misreading of the statute but unfortunately the Utah Supreme Court has never clarified this issue. Until it does, the safe assumption if you are being sued for debt is that the six year statute of limitations will be held to apply in individual cases of credit card debt. If there is any doubt at all and the debt is older than four years, contact an attorney to see if there is any way to argue the four year period applies. This is an issue that needs to be tested in court.

When does the statute of limitations begin to run?

Generally, the statute of limitations for debts based on written contracts begins to run when the first payment was due but not paid. In other words, the period starts when the contract is breached. That date could arguably be extended by applicable grace periods so be careful here if the dates are close. Also keep in mind that circumstances other than failing to make a payment can result in a breach of contract so be aware of whether any other breaches of the contract might have occurred.

For debts that fall under the four year period, the statute of limitations starts running when either the last charge is made or the last payment is received, whichever comes last.

For judgments, the eight year period begins running from the date of the judgment. If the judgment is renewed, the eight year period is also renewed.

Reviving, Waiving, or Extending the Statute of Limitations

There are several ways you can revive, waive, or extend the statute of limitations. Debt collectors violate the Fair Debt Collection Practices Act if they attempt to trick you into doing so but aggressive and abusive collectors and even collection attorneys often do anyway.

Reviving the Statute of Limitations

Making a payment on a time-barred debt will revive, or restart, the statute of limitations. Even a tiny payment will revive the debt. This is why debt collectors often ask for a token payment on old debts. And whether the debt is only a year or two old or way outside the statute of limitations does not matter. Making that token payment restarts the clock.

Making a written promise to pay the debt will also restart the statute of limitations. Again, this is why collectors will ask you for an email or letter confirming your intent to pay a debt even when they don’t demand payment. They know that written promise to pay will revive even the oldest debt.

Acknowledging the debt in writing is yet another way you can revive the statute of limitations on a time-barred debt. This is why you must avoid mainstream credit repair companies because most have no clue that a poorly written credit dispute letter can result in an acknowledgment of the debt and restart the clock.

Waiving the Statue of Limitations

As discussed previously, the statute of limitations is an affirmative defense that is waived if you fail to raise it when you are sued for the debt. This is a good reason to seek legal counsel in debt collection lawsuits. A good attorney will properly preserve and argue this, and other, applicable affirmative defenses.

Extending the Statute of Limitations

Extending the statute of limitations, also referred to as tolling, occurs when a person is no longer subject to the jurisdiction of the Utah courts. Most frequently, this occurs when a person moves out of state for a period of time and then returns. When that occurs, the time when the person was absent and not subject to personal jurisdiction is not included as part of the time limited for the commencement of the action under the statute of limitations.

As discussed above, making a payment on the debt also extends the statutory time period for collections. Because of this, some more aggressive collectors will actually make phantom payments on debt they own in the hopes of extending the statute of limitations. Yes, doing so is a violation of the Fair Debt Collection Practices Act but many don’t get caught as it is sometimes difficult to detect and prove who made the phantom payment.

What should you do if a debt collector attempts to collect a time-barred debt?

If a debt collector is attempting to collect a time-barred debt or a debt you think might be too old to collect, don’t make any payments on the debt and don’t make any promises to pay the debt. Find out if the debt is too old first. Otherwise you will reset the statute of limitations and even the oldest zombie debt will be revived. Check the paperwork and your payment history to see if the debt is too old and don’t be afraid to ask the collector for proof of the debt, the contract, and a payment history if you need copies.

If the collector has sent you letters that seem unclear whether or not they can sue you for the debt or they have threatened to sue on a time-barred debt over the phone, contact a consumer protection attorney right away. You could have a claim against the collector for violating the Fair Debt Collection Practices Act which would entitle you to make the collector pay you damages.

You should also contact an attorney if you are being sued for a time-barred or zombie debt. That way you can be sure your affirmative defenses are preserved and properly asserted and you may be able to seek damages from the debt collector.

No matter what you do, act quickly. The statute of limitations will not automatically stop debt collection for an old debt nor will it protect you in court unless you properly raise the defense. In many of these cases attempting to collect the time-barred debt may violate the Fair Debt Collection Practices Act as well which could allow you to turn the tables and obtain payment from the debt collector.

Can an arrest warrant compel debt payment?

Utah debt arrest warrants

There are many misconceptions about whether or not an arrest warrant can be issued by a court of law for failing to pay debt. A recent article from the Standard Examiner entitled “Utah courts increase use of civil bench warrants to compel debt payments” shows how easily some of these misconceptions are spread. And that isn’t the first time the Standard Examiner misreported the issue. In 2016, it reported incorrectly that Rex Iverson died in jail after being arrested for failing to pay debt. If the media won’t report it right how can the average consumer be expected to know whether failing to pay debt can result in their arrest?

Arrest warrants in consumer debt cases are for failing to appear, not for failing to pay

The truth is that, for most debt, the courts may not issue warrants for arrest to compel debt payments. Courts can issue orders allowing creditors to garnish your wages, place a lien on your home, and seize your non-exempt personal property but they cannot have you arrested for failing to pay. The misconception arises because courts can, and justice courts in Utah often do, issue arrest warrants to debtors for failing to appear in court.

But that is a critical distinction. Merely failing to pay debt under normal circumstances will not result in your arrest. True, you can be arrested for failing to pay child support, court fines, or for writing bad checks, but as long as you appear in court and cooperate with the creditor’s efforts to discover your financial assets, you cannot be arrested simply for failing to pay a credit card account or other consumer debt. When you don’t appear at a court-ordered hearing for a supplemental order, however, the court can, and usually will, issue a warrant for your arrest.

The warrant is basically an order for contempt. The court issues the warrant for failing to obey the court’s order for you to appear, not for failing to pay the debt.

These arrest warrants arise in debt cases after the creditor obtains a judgment against the debtor and the debtor fails to appear at a supplemental hearing. These supplemental hearings are court proceedings in which the debtor is required to provide the creditor with details of their assets. That way the creditor can discover the debtor’s bank accounts, employment, and personal assets it can use to satisfy the debt.

An arrest warrant requires personal service

An arrest warrant for failing to appear at a supplemental proceeding is not automatically ordered by the court. Creditors are required to directly serve the debtor with notice of the supplemental hearing before the court will issue a warrant for arrest for failing to appear.

And it is not sufficient to serve another person living in the debtor’s household. For supplemental proceedings the creditor must serve the actual debtor directly. That differs from service of process of the original complaint which is effective upon service of someone else living in the debtor’s household.

In cases where the debtor did not receive direct personal service the court will request an order to show cause and request to continue the hearing to another future date. That way the creditor can try again to serve the debtor.

That doesn’t mean debtors should necessarily avoid personal service, however. Each time the constable attempts service it costs money and that money is added to the debt.

A debtor’s appearance at a supplemental proceeding can be avoided in some cases, but proceed with caution

When debtors are served with notice of a supplemental proceeding to collect a judgment they are provided with a list of questions. The questions relate to the debtor’s assets such as bank accounts, income, and personal property. If the debtor responds to those questions in sufficient detail to satisfy the creditor, the hearing for a supplemental order can be cancelled. Debtors should proceed with caution however, because unless they receive notice from the court the hearing is cancelled they must still appear.

Many times the creditors will still want the hearing to occur if only to put on the court record that the debtor satisfied their requirements. This is good practice for the debtor as well because it can prevent arguments of failing to appear from creeping up later. If the debtor answers the questions prior to the hearing, the court may still want the hearing to occur for the same reasons. Either way, it is best to appear and cooperate to be sure the creditor cannot request an arrest warrant.

The bankruptcy stay can prevent issuance of an arrest warrant

In some cases debtors may be insolvent and simply cannot pay the debt because their living expenses far exceed their income. In these cases, failing to appear will still result in an arrest warrant. One approach to resolving the debt may be to seek protection by filing bankruptcy. Many debtors don’t have enough debt to justify bankruptcy, but in truly desperate situations it can be an excellent tool for starting over. 

Once a bankruptcy is filed and notice is provided, the creditor is required to stop any further attempts to collect the debt. That includes hearings for supplemental proceedings. Again, debtors should exercise caution here because the bankruptcy stay will not automatically recall an already outstanding warrant. If the creditor has already obtained an arrest warrant but it has not yet been executed, the debtor who filed bankruptcy could still be arrested and have to pay the amount indicated in the arrest warrant to be released from jail.

Payment plans

Many creditors will accept payment plans to help debtors pay judgments. They will still likely require the debtor’s appearance at a supplemental hearing but if there are any assets or wages to protect, reaching an agreement with the creditor can be a good way to resolve the debt and avoid bankruptcy.

Payments can also be useful in reducing the debt in some cases. For example, when the debtor has no assets or disposable income creditors may be willing to accept an amount lower than the amount of the judgment. In many cases the creditors only accept less than the amount due when the debtor can make one lump sum payment but some creditors will accept less with monthly payments over time as well. 

In most cases, it is better to seek a payment plan before a judgment is entered. That way the creditor will still have to request a judgment from the court before it can garnish wages, garnish bank accounts, or seize unsecured non-exempt assets.

Consent judgments

The creditor may require a consent judgment in negotiating the debt to avoid the problem of having to obtain a judgment before it can seek garnishments and property seizure to collect the debt. A consent judgment, also referred to as a stipulated judgment, is entered when both parties consent to entry of the judgment with the court. Debtors often enter into consent judgments because they do not understand the consequences of doing so or because they have little to no choice in the matter. There are numerous ways to lose a debt collection lawsuit so debtors can be easily backed into a corner and feel they have no other choice. Overall, it is better to avoid a consent judgment either by prevailing in the lawsuit or by reaching a settlement agreement that doesn’t require entry of a judgment.


It is truly tragic that Rex Iverson died in jail but an arrest warrant was not issued against him for failing to pay a debt. Like other cases in the Utah courts, the arrest warrant was issued because he failed to show up when ordered to appear in court. To Mr. Iverson’s friends and family that distinction is almost certainly irrelevant, but to the average debtor the difference is important.

Debt collection lawsuits do not normally need to result in the issuance of an arrest warrant. Even if you cannot pay you should still appear throughout the proceedings. If you have assets you want to protect negotiate a payment plan or find out if bankruptcy is appropriate for your situation. Either way you should appear in court and cooperate.




Booted by Parking Solutions? Fight back!

Sue Parking Solutions

Parking Solutions, a Salt Lake City, Utah based company, issues tickets and immobilizes vehicles for various businesses around the Salt Lake valley. In some of these cases, they are doing so illegally.

Parking Solutions’ deceptive practices

One typical scenario occurs in the parking lot on the corner of 600 East and 400 South in Salt Lake City, Utah. In that lot, Parking Solutions issues tickets or immobilizes vehicles with a boot when one of the occupants goes to Jimmy John’s which is technically not a part of the parking lot served by the surrounding businesses like Cafe Zupas, Tonyburgers, or Jamba Juice. The problem, however, is that does not automatically constitute a violation of the posted parking rules.

Parking Solutions Salt Lake posted rules at Jimmy Johns

Think about it. If you go to Jamba Juice, a company for which that parking lot is intended, and your friend who drove with you goes to Jimmy John’s, you did not violate the parking rules that are posted on the property. You patronized Jamba Juice as the rules allow. No problem then? Wrong. Parking Solutions has an agent lying in wait to ticket or boot your car because one of the occupants went to Jimmy John’s. He, in his blissful ignorance, believes the patently illogical idea that none of the occupants can leave the property even if the others actually patronize the intended businesses.

Until you use [one of these businesses] you are trespassing.

Daniel Graves, Parking Solutions

Parking Solutions’ past criminal conduct

This problem has grown so bad that Parking Solutions employee Daniel Graves was actually charged with interfering with an officer in discharge of official duties for booting a Salt Lake City Fire Department emergency vehicle and his subsequent refusal to remove the immobilization device under direct orders by the police department. Ironically, Daniel Graves even claimed the police were extorting him when they demanded he remove two boots from their emergency vehicle. Justin Bird, Parking Solutions owner, seems to completely support such ridiculous conduct by Daniel Graves on behalf of Parking Solutions as he personally participated in refusing to remove the boot from the emergency vehicle, has been known to deny valid requests for refunds, and may have lied to government officials in a recent investigation over his deceptive business practices. Justin Bird even plead guilty on behalf of Parking Solutions to criminal charges of operating without a proper business license.

Parking Solutions Salt Lake City, Utah

In any event, Salt Lake City consumers should not be deceived by Parking Solutions’ unlawful and deceptive conduct and they should not pay any extortionate amounts. Instead, save your receipts to show you patronized one of the businesses the parking lot serves and contact a consumer protection attorney who can sue Parking Solutions on your behalf. Under Utah law you may be entitled to a refund of the $75.00 you paid to Parking Solutions and in some cases may even be entitled to a much higher actual damages award if Parking Solutions illegally tickets or boots your car and you can prove you patronized one of the businesses served by that parking lot. Either way, don’t be a victim.

Please note that the listing of any specific company or individual is not meant to state or imply that they committed any illegal or improper act; rather only that an investigation is or was being conducted by private attorneys to determine whether legal rights have been violated. The statements expressed herein are statements of our opinion only.

Stop Identity Fraud Debt Collections

Identity fraud can be financially and emotionally devastating. According to some studies, victims of identity theft suffer the same emotional harm suffered by victims of violent crime. Even those that don’t, still suffer from devastating financial loss and a massive consumption of time to repair the damage done to their credit. Here are a few tips to stop identity fraud debt collection to recover quickly and effectively.

Identity fraud debt collection dispute letters

Lay the groundwork and send identity fraud dispute letters

Place fraud alerts on your credit reports

Fraud alerts are an excellent way to stop future identity theft from occurring. Place one any time your credit is stolen or used without your permission. They are only a short-term solution and do not stop collections for existing debt, however, so it is important to take additional steps as well.

File a police report

Once you discover your credit has been stolen or your name has been used to establish new credit you should file a police report. In most cases, the police will not actually investigate the fraud or prosecute the perpetrator but the report is helpful in disputing the identity theft accounts with the credit bureaus and collection agencies. File a report but don’t hold your breath waiting for police to actually act.

Send identity fraud dispute letters

Your next step is to send identity theft dispute letters to the credit bureaus and collection agencies. Properly done, these letters put the collection agencies and credit bureaus on alert that your identity or credit was stolen and informs them which accounts they cannot report or collect. There are numerous mistakes you can make in sending these fraud dispute letters so be careful and make sure you handle these letters correctly.

Avoid common identity fraud credit repair mistakes

Mainstream credit repair companies

One of the biggest mistakes consumers make in trying to recover from identity fraud or to stop identity theft debt collections is to hire a mainstream credit repair company. The simple fact is that almost all credit repair companies handle identity theft incorrectly. And its not even close. Many are so incompetent that they simply treat your identity theft debt collections the same as they would any other credit listing by sending the same cookie-cutter credit dispute letters over and over again.

The damage this can cause your case cannot be overstated. Sending a form letter like the mainstream credit repair organizations send can waive your legal rights and, if worded incorrectly, can actually result in making you liable for the debt when you were not liable before. Improperly worded dispute letters can also get you sued for the debt even when it isn’t actually yours. For example, in an identity theft fraud case that recently came across my desk the consumer was a victim of identity theft but tried to no avail to dispute the account using a well-known credit repair law firm. After months of sending the same form cookie-cutter credit dispute letters the firm had already sent on thousands of previous cases and the account was still being reported. The collection agency was also still attempting to collect the debt.

Identity theft collection agency letters

Victims of identity fraud can find various websites offering free identity theft collection agency letters to download. Use of those dispute letters is not recommended for several reasons. First, the letters we reviewed do not adequately protect your legal rights. Preserving your rights is the entire point of sending the letter so if it fails to meet that basic requirement you are doing more harm than good.

Many of the identity theft fraud dispute letters we reviewed also do not properly inform the credit bureaus of the theft. In some cases the dispute letters merely state in conclusory fashion that the account is the result of identity theft while other identity theft collection agency letters request information from the credit bureaus that isn’t even arguably helpful.

Other identity fraud collection letters of explanation threaten the credit bureaus or assert legal doctrines incorrectly. Neither tactic is effective or desirable. Indeed, one of the best ways to instruct the credit bureaus or collection agencies that you don’t actually know what your rights are is to incorrectly assert those rights. Credit repair is as much an art form as a science.


If a debt collector is hounding you for an identity theft account or the credit bureaus are reporting a debt that is the result of identity fraud your best course of action is to act fast. Place a fraud alert, file a police report, and send dispute letters to the creditors, debt collectors, and credit reporting agencies right away.

Trying to stop the identity theft debt collections on your own or by using a mainstream credit repair firm however, can cause more harm than good or even trigger lawsuits against you so use caution. Identity theft debt collections are not a cookie-cutter or form letter situation. These cases are fact-specific and must be handled on a more personal level. Stopping identity theft collections is simply too important to leave up to incompetence or luck.

Identity Fraud Reaches Record High Numbers

Identity fraud increased 16 percent in 2016 with a record 15.4 million Americans falling prey to one form of identity theft or another according to the new 2017 Identity Fraud Study from Javelin Strategy & Research. The total amount stolen in 2016 also increased to $16 billion dollars.

Card-not-present online fraud saw the biggest increase

The increases come mostly from online transactions also known as card-not-present fraud. In online card-not-present fraud there was 40 percent increase in thefts and out of pocket costs to the consumers were double the cost when compared to fraud involving point of sale transactions. Experts believe the spike in card-not-present online fraud is due largely to the new chip technologies which protect consumers more effectively during in-person purchases.

Account takeover fraud also increased

Account takeover fraud occurs when a thief hijacks an existing account. Account takeover frauds increased 61 percent in 2016 with victims paying an average of $263 which is five times higher than the average theft. The total amount lost in 2016 to account takeover fraud was approximately $2.3 billion dollars. There is no clear reason why account takeover fraud increased so dramatically but some experts believe the increase is the direct result of a lack of consumer oversight over their own accounts and the delays involved between purchases and billing statements being sent out which increases the amount of time before an account takeover theft can be detected. Unlike new account fraud, account takeover fraud cannot be detected by regularly reviewing your credit reports.

New account fraud

New account identity fraud also continues to plague American consumers and does not appear to be decreasing by any appreciable measure. In new account fraud identity thieves open new accounts in consumer’s names using information they either stole or purchased on the black market. Many of these new account theft cases go undiscovered for years until the consumer either learns of the theft through a review of their credit reports or when they are contacted by a debt collector seeking to collect the fraudulent debt.

Social networking fraud

The study also revealed that consumers who share their social life on digital platforms are at a much higher risk of account takeover fraud than consumers who are mostly offline or who are more private with their information. Social networks allow thieves access to contact information, information about friends and family, and updates on the daily lives of their victims. Some consumers even post travel plans online which allows identity thieves to add charges to an existing credit card or open a new account with less likelihood of being detected quickly.

The simple fact is that active social networkers are far more open about private information and are therefore more susceptible to fraud. The good news for social networking consumers is that, although they are more likely to be a victim of identity fraud, they are also likely to discover the theft more quickly than offline consumers.

Simplify identity fraud prevention

The average consumer does not need to hire a credit monitoring company or lock down their credit reports with credit freezes to prevent identity fraud. The most simple methods are often the most effective.

Start by using more discretion with providing information to strangers online. To be most effective, don’t share anything publicly. If you are going on vacation, just purchased a home, or have been shopping online recently, keep that information private. Identity thieves are masters of using information that seem harmless to access your accounts or open new accounts in your name. Don’t give them the chance.

Another proven method is to use a credit card for purchases rather than a debit card. That way, your losses are limited and theft can be detected more easily. Debit cards allow access to your entire account which can greatly increase any potential loss to identity fraud. If you insist on using a debit card rather that a credit card you can use multiple accounts to reduce your potential loss. Put a limited amount of money in the debit card account each week while keeping the bulk of your hard-earned money in a separate account. That way, the larger amount is protected and only the smaller account is at risk. Of course, nothing you do can prevent all forms of theft or identity fraud but diligent efforts will certainly reduce your risk and potential losses.

CFPB Debt Collection Survey


Today the Consumer Financial Protection Bureau released its recently completed Consumer Experiences with Debt Collection survey.

The survey provides a comprehensive insight into consumer experiences with debt collection activity which occurs when a debt collector, collection attorney, or collection agency contacts consumers to collect unpaid debts. These debts include various past due loan and bill payments.

The following is a summary of the CFPB’s key findings:

About one-in-three consumers with a credit record (32%) indicated that they had been contacted by at least one creditor or collector trying to collect one or more debts during the year prior to the survey. Most of these consumers (72%) reported that they had been contacted about two or more debts.

Past-due medical bills, credit cards, and student loans were among the most frequently cited debts consumers were contacted about. The prevalence of contacts about credit cards and student loans in collection differed across demographic and credit-score groups. In contrast, the shares of consumers who were contacted about past-due medical bills were more comparable across income levels, credit scores, and ages.

More than half of consumers (53%) who were contacted about a debt in collection in the past year indicated that the debt was not theirs, was owed by a family member, or was for the wrong amount. Roughly one-quarter (27%) of consumers who were contacted about a debt in collection reported having disputed a debt with their creditor or collector in the past year.

About one-in-seven consumers (15%) who were contacted about a debt in collection reported having been sued by a creditor or debt collector in the preceding year. Twenty-six percent of consumers who were sued reported that they attended the court hearing.

More than one-third of consumers (37%) contacted about a debt in collection indicated that the creditor or debt collector that had contacted them most recently usually tried to reach the consumer at least four times per week and 17% reported that the creditor or collector usually tried to reach them at least eight times per week. Close to two-thirds of consumers (63%) contacted by a creditor or debt collector said they were contacted too often.

Forty-two percent of consumers with collection experience in the past year said they had asked at least one creditor or collector to stop contacting them. One-in-four consumers who made this request reported that the contact stopped.

Consumers most commonly indicated that they would prefer to be contacted about a debt in collection by letter or phone. Consumers most commonly identified in-person contacts as the way they would least like to be contacted.

Consumers feel it is important that others not overhear a message about their debt from a creditor or debt collector. At the same time, most consumers also want the creditor or debt collector to include, for example, their name and the purpose of the call (debt collection) on a voicemail or answering machine.

Consumers tend to take a more favorable view of creditors seeking to collect a debt than of debt collectors. Consumers were more likely to report that debt collectors contacted them too frequently compared with consumers contacted with the same frequency by a creditor. Consumers contacted by debt collectors were more likely than those contacted by creditors to report negative experiences such as being treated impolitely or threatened.

Identity Theft Protection Company LifeLock Fined $100 Million for Deceptive Sales Practices

Identity theft protection services company LifeLock® has been in trouble for deceptive practices and misleading consumers in the past but lately have been taking even more heat than before.

Prevent Computer Records Access Identity Theft
Computer Records Identity Theft Protection

In 2010, LifeLock entered into a settlement agreement with the Federal Trade Commission after it was accused of making false claims regarding the effectiveness of its identity theft protection services. Under the agreement, LifeLock paid $11 million. Now, after violating that agreement, LifeLock has been ordered to pay an additional $100 million in penalties and refunds. The money will be deposited with the U.S. District Court for the District of Arizona but will be paid directly to consumers harmed by LifeLock’s violations.

“This settlement demonstrates the Commission’s commitment to enforcing the orders it has in place against companies, including orders requiring reasonable security for consumer data,” said FTC Chairwoman Edith Ramirez. “The fact that consumers paid Lifelock for help in protecting their sensitive personal information makes the charges in this case particularly troubling.”

This settlement comes at bad time for LifeLock since it was recently revealed that LifeLock was used by a man to stalk his ex-wife in Gilbert, Arizona. The woman, Suzanna Quintana, had her financial life monitored by her ex-husband using LifeLock’s identity theft protection services. The kicker is when LifeLock found out about the stalking, it stonewalled the Arizona woman and refused to help her clear up the matter. They even refused to provide the Arizona woman with information when she involved the police. Eventually, LifeLock gave in but not before making Quintana suffer needlessly.

“They didn’t listen to me. It’s almost like they didn’t believe me,” Quintana said. “They did not want to admit what they’d done. Since they are an identity-protection company, it was not in their best interest to admit my identity wasn’t protected. They tried to shift the blame to me.”

LifeLock allowed Quintana’s ex-husband to track her financial accounts, credit scores, credit reports, and public records as if he was the subject of the records. Quintana discovered the intrusion when one of her sons found a five-page spreadsheet on her ex-husband’s computer that documented her bank accounts, credit cards, and other financial activity using a LifeLock account in her name.

Kelley Bonsall, LifeLock’s Vice President of Media Relations and Corporate Social Responsibility, said in a public statement, “We’re distressed that someone was able to use our service to victimize his (ex-)wife. There’s often little a company can do to stop someone who is intent on causing harm using the personal information of a partner, but we owe this victim an apology because we did not assist her with the speed and care that the situation required.”

LifeLock® is a trademark of LifeLock, Inc.

Ultimate Credit Score Guide

Understanding your credit score and what factors impact that score are crucial tools for building a healthy credit rating.

Your credit score determines how much you will pay in interest rates to borrow money or even whether you will even get financing in the first place. Credit reports are also used to decide whether to provide you with insurance, housing, and utilities. Even many employment decisions are based on your creditworthiness.

A higher credit score makes you a lower risk to lenders, which, in turn, means you are more likely to get credit or insurance—or pay less for it. It also means you are more likely to get that dream job you worked so hard to achieve.

Keep reading and learn to understand, manage, and improve your credit rating.

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