Expert: Jason Milleisen - 4/11/2011

Question
Dear Mr. Milleisen,

I currently own a small business in the state of California.  I have been contacted by a commercial debt collector regarding a balance that AT&T claims my company has incurred, allegedly at a different address. This balance was not incurred by our company, and we do not know the person responsible for this debt nor have we done business at the alleged address. The name of the debtor (Walt Richie)is similar to mine, but spelled considerably differently.  The alleged balance is between $400 and $500.

When we began receiving phone calls regarding the debt I instructed them to product certain documentation such as:

* identify the creditor
* identify the registered agent and address of the creditor
* evidence of the debt
* invoices pertaining to the debt
* evidence that a corporate officer requested their goods or services
* not to contact the company until such documentation had been produced and reviewed.

They have continued calling with lawsuit threats, but have not produced any of the documentation.  

Is it legal for this company to contact us w/o producing such documentation pertaining to this debt?  If not, what legal recourse does my company have against the collection agency to request them to product or give up the collections efforts? Their daily phone calls are annoying, but if I am the one to answer and see their number on caller ID, I just click to disconnect immediately when I pick up the phone and am instructing staff to do the same. Business is tough for us at this time and we do not have the resources to fight this in court.

Thank You,

Wallace Richey
B.J.'s Embroidery & Screenprint
272 E. Smith St.
Ukiah, CA 95482

(707)463-2767

Answer
Hi Wallace,

Thanks for your question.  While I cannot speak to the legality of specific debt collection practices in your state, I think you have done the right thing by asking for proof of the debt if you don't believe that you owe the money.  I would suggest taking it one step further and put your request in writing.  If they have sent letters, I'd suggest sending a letter (certified, with a return receipt) to the address on their letterhead that states that you dispute the validity of the debt.

The threat of law suits is a common practice among debt collectors, so that alone does not guaranty that they will in fact take legal action.  That said, the conservative path to take is to dispute the debt in writing rather than continue to ignore their calls.  If that does not work, and they do in fact take legal action, I would recommend retaining counsel in order to protect your rights. If the cost of an attorney exceeds the amount of the alleged debt, you will need to weigh whether it's worth it to retain counsel.

Best of luck,
Jason Milleisen
Distressed Loan Advisors
www.JasonTees.com