Expert: Mike Weikle - 7/14/2009

Question
A bank I formerly did business with now claims that I owe them over $7000.00 in loans. I had three separate loans in 1998- 1999 and they were all three paid in full as of 2000. They claim I never maid a payment but can show me no documentation saying that I owe them. Also the collection agency that they have working the claim says the loans were from 2005 yet I have done no business with them since 2000. Is there any thing I can do short of taking them to court. Also I can not find my receipts as they were lost in the two times I moved since paying off the loans.

Answer
In short, the Bank has the burden of showing you documentation that you borrowed the money (unpaid note(s)) and, then the burden shifts to you to show that you paid them.  

Send the bank and the collector (address the letter to the President of the bank with a copy to the collection agency) a certified return receipt letter advising them you do not owe the debt.  Be sure to remind them in this letter that you have previously denied the debt when they have called and they have  failed to produce any documentation of the claimed debt in spite of your several requests.  Then demand they either show you the documentation you owe the money or remove any negative information from your credit report.  


The first question I have is:  how did you make the payments?  Did you pay them with a personal check or how?  If you paid with a personal check, you can have your bank provide you with copies of your statements.  Then you can identify the checks that you gave to the bank to make the loan payment(s) and have the bank make you a copy.

Before going to your bank for documentation of payment, go to the credit bureau and go through your credit report with a representative of the credit bureau.  Advise the representative of any claimed debts you do not owe.  The claimed debts that are likely reflected as being charged-off (loss) by the bank.  

The credit bureau has to make an inquiry on your behalf to the Bank.  If the bank responds you owe them the money.  Tell the credit bureau you do not owe it and the Bank needs to provide documentation of the claimed debt.  If the Bank cannot produce the documentation, the credit bureau(s) have to take it off your credit report.