Clark Howard: When identity thieves don’t pay, companies may take you to court

Criminals are borrowing money using stolen identities, and debt collectors are coming after those identity theft victims when criminals default on the payments.

So much of our personal information is in the hands of criminals that Channel 2 Action News consumer advisor Clark Howard warns consumers to be weary if a company asks you to pay a debt — whether you owe it or not.

Nearly 200,000 complaints were reviewed by the Consumer Financial Protection Bureau since 2019.

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Complaints said consumers were threatened with legal action, alleged debt collectors made false statements, and some said they were solicited about a debt they did not owe.

Howard said if you’re contacted by someone claiming you owe a debt don’t just pay it, but don’t ignore it either.

The absolute first thing you need to do is ask for proof of the debt.

The debt may be expired, which happens after seven years, or may be debt you never owed.

Debt buyers will often purchase old debt, sometimes called zombie debt, for pennies on the dollar and try to collect the original amount.

Harassment and threats of filing a lawsuit are common, Howard said.

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They may even offer to leave you alone if you pay a portion of the debt.

Do your research before you pay a dime.

If you do receive a court summons, ignoring it automatically makes you responsible for the debt. Howard said call the court and demand proof that you are the owner of that debt.

Howard said the best way to protect yourself from this type of fraud is to stay on top of your credit report. You’re entitled to one free credit report each year. Go to Annual Credit Report. Sign up for Credit Karma.

Next, pay your bills on time and keep a budget. Don’t spend more than you make and don’t use a credit card if you can’t pay off the balance each month.

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