Thursday, December 19, 2013

Debt Collection Scam

I don't have any experience with debt collectors, because we always make our payments on time, etc. So...I was a little surprised when a debt collection agency called "Dynamic Recovery Solutions" (more on them later) called me several months ago, claiming I owed $157.97 to "Columbia House" for some DVD rentals or something from 2007. Umm...no?

"But...are you sure? That was a long time ago. Maybe you just forgot?" Umm...no? I've never done business with this "Columbia House", and I don't rent DVDs at all, really. Then, a couple of days after the phone call, they sent me a "bill" in the mail, and mailed another one (the same one) again a week later.

I did a little research before taking my next action. Turns out, there might be a couple of levels to this.

Now...I understand that debt collection agencies aren't the most popular companies out there. Generally, if you research a debt collection agency on the internet - even a legitimate one - most of the stuff you come across will be negative: "these guys are TERRIBLE", "do NOT do business with them", and so on and so forth. I don't hold it against debt collectors in general; getting people who are late on payments to pay up can't be easy, and sometimes the most effective way to get results is to be, well, persistent. I get that. So, just because the internet has a strongly negative view of this "Dynamic Recovery Solutions" doesn't mean they're not a legitimate and law-abiding debt collector.

Besides, maybe this apparent scam is more about Columbia House than the debt collection agency itself. A little more Google research reveals that Columbia House has been involved in some high-profile scams of their own, such as sending you unsolicited CDs or DVDs in the mail, and then billing you for them later. Except that I've never even received any such thing from Columbia House. Maybe the people who lived in our house before us did? Who knows. Either way, no.

Well, my final conclusion was that this is just a scam, initiated by the debt collection agency. It's certainly possible that "Dynamic Recovery Solutions" does, in fact, partake in legitimate debt collection. In fact, I bet they do, if nothing else to help keep law enforcement off their back regarding their bogus debt collection efforts. Naming a company with a particularly shady track record like Columbia House as the creditor? That makes it at least sound credible. That amount of $157.97? That might be "the largest amount that some people are willing to pay without asking too many questions". Any more, and the alleged debtors will put up more of a fight. Any less, and DRS doesn't make as much money off the scam, of course. And of course, a bill of $157.97 sounds more legit than a nice and round $150.00 would.

And here's another fun thing: when Dynamic Recovery Solutions calls you, they fake their caller ID so that it looks like the call is coming from a local number. That way, you're more likely to answer. Because if you get a phone call from an area code you don't recognize, or an "unknown" number, you don't answer, right? (I don't.) And it's a different fake phone number every time, so you can't just block their fake number. (It wouldn't surprise me if all debt collection agencies do this, actually.)

I'm not the only person who has been accused by these guys of a Columbia House debt that didn't actually exist. And I bet some people actually paid up, too, just to get DRS "off their back". But not me.

So, what to do in a situation like this? I sent Dynamic Recovery Solutions something called a Debt Validation letter, or DV. You can find various DV templates online, but the gist of the letter is this: "Provide written proof that I owe this money, or else you are not allowed to contact me again under federal law." After I sent that in the mail, wouldn't you know it, I never heard from Dynamic Recovery Solutions ever again. And that's smart from their perspective: by not chasing after people who are more willing to fight back, they run less risk of someone taking them to court and potentially bringing the entire scam down.

So, be on the lookout for these Dynamic Recovery Solutions guys. If they contact you claiming some BS debt from several years ago, don't pay it. (Unless you actually do owe the money, in which case, maybe you should try to pay it.)

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