My Credit Repair Task 1: Removal of Inaccurate Collection Reported by SARMA

[ShaggyWannabe]

I'm about to embark on my first task in cleaning my credit report - removal of an inaccurate collection account.

My 20 year-old non-dependant daughter who no longer lives at home incurred a medical expense.  Bills were sent to her address, which she never paid (supposedly because she was waiting for insurance to "take care of it").  The debt was turned over to SARMA (a collection agency).  SARMA decided to list the collection on my CR, because I am the primary on the medical insurance policy (through my work).  Neither I nor my wife ever accepted financial responsbility for the expence.

The medical provider has verbally acknowledged that I never accepted financial responsiblity (and as stated above, they never sent me a bill).

My medical insurance compnay (Humana) has verbally confirmed that being the primary holder of the policy does not automatically impart financial responsiblity.

SARMA has verbally acknowledged that the debt is in my daughter's name, but refuses to remove it because I am the primary on the medical insurance.

I would think this should be easy to get off my CR (and then work with my daughter to pay the debt, but that's a seperate issue). Any recommendations as to specific language, laws, precendents, etc to put in my dispute letter would be greatly appreciated.  I'd love to start my credit repair journey with a success!!

[RobertEG]

Why did the creditor refer for collection, naming you as the responsible debtor, if they seem to state that you are not?

I  dont see how the debt collector is the decision-maker here?

[ShaggyWannabe]

I asked them that very question, and their only answer was that I was responsible because I am listed as the primary holder on the medical insurance policy.

I suspect that, regardless of their justification, their motive for naming me is they figure they have a better chance of collecting from me than from a 20 year old college student.

[pizzadude]

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@ShaggyWannabe wrote:

I asked them that very question, and their only answer was that I was responsible because I am listed as the primary holder on the medical insurance policy.

I suspect that, regardless of their justification, their motive for naming me is they figure they have a better chance of collecting from me than from a 20 year old college student.

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I agree that is very likely the reason that they placed it on your CRs.   I suspect that you'll probably have to play hardball with them to get it removed.

I'd send them a certified letter informing them that they are willfully reporting inaccurate information and unless they remove you will take legal action for their violation of the Fair Debt Collection Practices Act ( FDCPA ).

[RobertEG]

+1, except I would cite violation of FCRA 623(a)(2), and not the FDCPA.

I would also consult an attorney, and get legal opinion that you are not responsible for the debt.  If I had clear legal basis for asserting no legal responsibility, I would do more than threaten legal action.... I would file an action in small claims court.

[Booner72]

This is my biggest fear in putting my 20 year old stepdaughter on my insurance!  I'm not mailing her the cards now.

But I will say that I've sent two CA's "intent to sue" letters relating to medical issues, and both have immediately removed the collections from my reports. I think this will do the trick.  If not come back here with what they said (to this post) and we can help further.

[ShaggyWannabe]

After consulting with an attorney (and it was difficult to find a local attorney that would deal with credit/debt issues, other than declaring bankruptcy), I am considering moving forward with a lawsuit.  She feels we have a case for willful and/or negligent failure to comply with the FCRA, although she's going to do a bit of research before making a commitment.

She may be willing to take the case for no up-front fee, to be paid only if she wins.  It's likely that any judgement would be small enough to pay her fee, but all I'd get out of the deal is the entry removed from my CRs.  I'll only get a few dollars in the unlikely event of the judgement exceeding her fees.

If I choose this route, there is no "going back". In other words, if I decide to stop legal action before a judgement, then I will have to pay her fees up to that point.  So if  SARMA responds to her initial filing with an offer to remove the entry from my CR in return for dropping the lawsuit, then either 1) we refuse and legal action continues (with no guarantee that we will win, or that they will even be forced to remove the entry), or 2) we agree, but I have to pay my attorney's fees.

To this point, SARMA has refused to budge, although I have not yet sent a certified "intent to sue" letter.  I feel there is a decent chance of SARMA taking me more seriously and removing the entry if I send a certified letter, which is much simpler than going with an attorney.  But I'm concerned if I send such a letter (and SARMA still refuses to budge), I may jeopardize my ability to file a lawsuit.

Any thoughts?