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Dead Debt Schemers Use Credit Score to Frighten Consumers

By Sally Maison
Published: Friday, November 13th, 2009

Local investigators reported that a collection agency has been contacting Tulsa residents demanding payment on credit card debts that have been marked delinquent for decades even though the state’s statute forgives delinquencies that have been committed five years ago.

Dead Debt Schemers Use Credit Score to Frighten ConsumersAccording to authorities, the demands for payment of dead debts come from RJM Acquisitions Funding LLC, a collection agency based in Syosset, N.Y. Investigators say the company usually tells consumers that they owe thousands of dollars on long-dead accounts and warn cardholders that their credit score will not improve unless they pay those debts.

RipOff Report, an online scam monitor, refers to RJM as a “junk debt buyer.” Such company either buys consumer information on charged-off accounts from original creditors or borrows that information from the credit bureaus. After giving away the information for a very low price, the original creditors will not get anything from the collection since the accounts are already sold.

RJM employees and other junk debt buyers contact people and harass them for old unpaid debts. Experts say those companies take advantage of people who are ignorant about their right, adding that many consumers do not know that they cannot be arrested, sued, or garnisheed for debts that have been marked delinquent for more than five years. Experts also say the junk debt buying business is profitable since collectors have found means to frighten many consumers into paying.

Specialists advise consumers to know their rates, especially those that are outlined by their state. Additionally, consumers are advised not to bother paying debts that have been forgiven since the payment will neither go to the original creditor nor improve a credit score.

Investigators say people who have once been victimized by the scam are likely to get calls from other junk debt buyers who take them as “easy marks.”

The Federal Trade Commission says it is the responsibility of borrowers to meet their obligations with their creditors but not for debts that are considered “time-barred”—those that are already so old that a debt collector or creditor can no longer sue a person to collect debt.

With complaints on such scheme rising significantly in New York, the state’s attorney general, Andrew Cuomo, was prompted to subpoena RJM Acquisitions Funding and 19 other companies in May. Reports say Cuomo is still continuing with his inquiries into these debt collection practices.

Legal specialists in Oklahoma tell consumers to never pay debts which are over five years old since doing so will only revive a debt contract.

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