Expert: Kathleen Eads - 6/20/2006

Question
I received a summons at the end of May (I was on vacation at the time and my boss accepted it but they have not mailed a copy of the summons to complete substitute service)and I am being sued by a collection agency over a phone bill from 2002, which was taken over by a collection agency in 2004  I used to have a phone line and dsl service with pacific bell and the phone line was limited to no long distance and no 900 #'s.  Charges for calls to a 900 # in madagascar started showing up on the bill and complaining to the phone company didn't help and new charges continued to show up.  When I finally refused to pay they disconnected my service at the end of October 2002 and sent me to collections.  During that whole time I lived in the same house and received no communication from the collection agency.

In march of 2006 as the hit is on my credit report I contacted the collection agency about trying to clear it up as I was in the process of
trying to by a house.  I told them that I disputed the charges but needed to clear things up to close on the property.  They told me they had no record of me disputing the charges with the phone company and that my 30 day limit for dispute was expired.  They were unwilling to comprimise and had attached interest and other fees to the original amount.  In the end we were able to close without needing to clear the mark on my credit.  When they contacted me later to ask when I was going to pay I told them that as it was unnecessary to clear for closing I was going to continue to dispute the charges.

I'm now being sued for the original amount ($950)plus attorney's fees plus 10% interest per annum starting from 2002.  As I am in California I
know that if I don't fight this they can garnish my wages.  I don't have any of the old phone bills from that time frame and am having trouble
getting in touch with SBC in order to get copies if I can.

I checked with the courts and got the following response

PROOF OF SERVICE OF SUMMONS IS RETURNED BY COURT FOR THE FOLLOWING REASON(S): NEEDS TO BE SERVED AS SUED   

I'm not sure on this meaning but plan to file a motion to quash the service of summons since as far as I can tell it was improper and have sent demand for validation letters to the collection agency and thier lawyer. Would a laches defense work here since they sat on this until I contacted them this year and the sol only had a few months left?  

Answer
Melanie,

I think you have sound reasons to continue to dispute the bill, and I would send a certified letter to any one you can find to copy (return receipt requested so you have proof they got it) indicating your dispute.  Give them a time frame, as you did me, to show you dispute the charges and leave it at that.  If they sue you, it will go to court as disputed and it's doubtful they will win anyway, given the statute of limitations and your position on the matter.  

I firmly believe agencies go to this extreme hoping to intimidate people into paying.  You obviously have no intention of paying the disputed bill.  Technically, they can try to collect forever; however, the statutes only allow them legal recourse for a specified amount of time (I've included a link for you to reference).  

http://www.cardreport.com/laws/statute-of-limitations.html

When you contacted them to clear it up to close on your house, they probably saw this as an opportunity to collect and moved forward on the matter.  If you had actually made the international calls, my position would be different.  Since you dispute the bill and have tried forever to get them to correct it, I wouldn't pay a dime.  

Find out if there is a date set for the case and show up to defend yourself.  If they tried to serve you and it was returned to the courts, they could get a default judgment in your absence.  You DON'T want this to happen.  

I hope you get it worked out,
Kathleen Crabtree-Eads