Expert: Michael Brotherton - 6/8/2007

Question
I received a phone call yesterday from a gentleman in Georgia stating that he is a private investigator working for an agency trying to collect a debt on an old payday loan. I remember taking some out about 3-4 years ago but thought they were all paid. The story basically goes is that they want me to pay them now over the phone or by 7 p.m. they will alert the original lender I'm refusing to pay and an arrest warrant is to be immediately issued since they now know where I live in Houston and a check was originally used for the transaction. They are just doing this as a courtesy to me by letting me know whats going on according to one person I spoke with. They gave me 2 different amounts owed and two different time frames when I asked as to when was it and how much was it for. I called the original lender and indeed they said I had a default, got an exact date that they turned it over for collection (6-4-04) as well as that agencies number. I called them and found that they did not persue the account but sold it to this new agency on May 10, 2007. How legal are the tactics they are using? It is on my answering machine where the one caller stated that I must return their call in reference to my pending hot check warrant to clear this matter up immediately.  

Answer
Keep the recording. They may have violated the Fair Debt Collection Practices Act. IN most states you cannot go to jail for a check being returned on a pay day loan unless they can prove fraud. You might contact your local prosecutor and ask them generally how they handle matters such as this. I would demand verification in writing and send them a cease and desist letter. Force them to communicate in writing. If you owe it make payment arrangements but never give them a check by phone. Pay by money order only. Make sure they confirm the actual balance in writing.

Good luck.