Multiple creditors collecting on a debt....

[gottastartsometime]

I'm listening to a podcast of Dave Ramsey from yesterday and I've got a question.

Caller states that she has an old debt that multiple creditors are contacting her about. Apparently she paid the debt off in full to the 1st collector and has a copy of her cancelled check and the bill from collector A showing the amount. Now collectors B and C are harassing her about the same debt yet at an inflated price. Dave tells her to make multiple copies ad the check and bill and to go nuts on these collectors when they call and tell them the debt has been paid in full and they're in violation of federal laws for trying to collect on a paid debt.

Question is, if a debt is paid to collector A, in full, can it not be collected on by anyone else even if that debt was possibly sold to collector B and C? I' have 2 entries for the same collection account showing different amounts. If I paid collector A the amount in full, can I tell collector B to kiss off since I've paid the debt in full and to delete their reporting of my debt?

[Anonymous]

You only have to pay a debt once. So if it is paid to A, then you don't have to pay B and/or C. Now, B and C can still have their TLs for the collection on your CR but they must update the balance due to $0.

[llecs]

Ditto to the above.

I love DR. If he didn't dislike FICO so much, I'd call in and suggest everyone visit here if they want help in fixing their credit or handling creditors. He's slightly incorrect on breaking federal laws. It is against the FDCPA to knowingly collect on a debt that isn't valid, but that is what the DV process is for...to determine the validity of the debt. I probably didn't hear that caller and don't know the particulars. It's also against the law, per the FCRA, to knowingly report a debt that's invalid.

Once Collector A gets paid, they can't resell it, because there is no debt. Maybe a lesser amount was paid. Maybe there was added interest that came due. Maybe there was some sort of misunderstanding as to what the balance was. Or maybe Collector A received the payment at the same time as Collector B purchasing the debt, and Collector A never forwarded the $$$. Or perhaps Collector A is a bum. It's always important to DV a CA, even if you know the debt is yours for these reasons. BTW, Collector C is probably innocent in all of this. They probably don't know that they've been scammed.

Back in the day this very thing happened to DW (well, similar). DW owed $$$ to Cross Country Bank (now Applied Bank) on a CO'd CC. DW then got collection notices and in the days before knowing proper repair, we settled with the CA for $250 less. The stipulation was that the $$$ had to arrive by X date. We mailed certified funds via CMRRR. They signed for it before the due date. Months later, this very same CA, slime and all, sold the difference of that $250 to another CA, who then started collecting. That CA bumped up the charges on that $250 and it eventually went to $1000+. We ignored it and to this day they still collect. It's past SOL and CRTP so no worries, but it's interesting to see that at play.