Companies use new bill collecting method: 'debt tagging'

Michael O'Toole is just one of thousands of victims of a new bill collecting trend called "debt tagging.''

The Tampa resident said he frequently gets calls from bill collection companies about debts he doesn't owe.

"Sometimes it gets threatening. Sometimes it gets pretty nasty," he said. "I got 11 calls over the course of three days.''

Sarasota personal finance expert Gerri Detweiler with Credit.com said companies buy up old debt for sometimes pennies on the dollar and just look for someone, anyone, to collect from.

"If you get tagged with someone else's debt, it can be a really scary situation,'' said Detweiler. "They can threaten to sue you, take you to jail, ruin your credit. We've even heard threats of violence from some of these companies.''

O'Toole believes the companies are calling all the Michael O'Toole's they can find in hopes of stumbling across the right one.

"Typically, they want your information. They get very defensive when you tell them you are not going to provide an accurate social [security number], when they have the wrong one, or an accurate date of birth.''

Using caller ID, O'Toole started writing down some of the numbers and searching information about the companies on the Internet.

"I was surprised to see how many of these companies were out there that seem to border on scams,'' he said.

O'Toole e-mailed Eight On Your Side asking that other consumers be warned.

Detweiler said: "They're hoping you're so scared that maybe you do owe the debt, maybe you forgot about or maybe your credit is going to be ruined so you're going to pony up and pay the debt even if it doesn't belong to you and unfortunately, some people do.''

Detweiler said consumers do have rights under the federal Fair Debt Collection Act.

Detweiler said if you receive a call about a debt that isn't yours, first, tell the company to put it in writing. Then, dispute it in writing and the company has to stop trying to collect from you.

"They're not allowed to contact you again, unless they are going to take you to court and if it's not your debt, it would be crazy of them to sue you,'' Detweiler said.

Also, there is a statute of limitations on collecting old debt. In Florida, it's four years.