INDIANAPOLIS -- Even if you thought your credit card debt was dead and buried, it could come back to haunt you.
Dead companies could be coming after your money years after they’ve gone out of business, Call 6 Investigates has learned.
Mark Harrison, a factory worker in Indianapolis, opened up a credit card 10 years ago and had forgotten about it.
Until he received a notice in 2013 that he owed Great Seneca Financial Corporation $862.
Harrison paid up out of fear they would garnish his wages, but Harrison later learned Great Seneca Financial Corporation dissolved in 2009.
“I’m a blue collar worker working hard to provide for my family,” said Harrison. “They’re going after thousands of people like myself. It’s not right.”
Indianapolis consumer law attorneys Steve Hofer and Keith Hagan said Harrison is not alone.
“We know there are at least 10,000 people in Indiana being affected by dead companies,” said Hofer.
They’ve filed a class action lawsuit alleging debt collectors are not fully disclosing they represent dead companies that no longer exist.
Hagan explained the original credit card company typically takes a tax write-off when they sell your debt to a debt collector.
Indiana law requires those debt collectors to have proof they’ve been “assigned” the debt.
“The debt collector is making a bet they can buy this debt for pennies on the dollar and collect on it, and if they don’t have the right paperwork, they can’t,” said Hagan. “If that assignment isn’t in the court file, they have no right to collect on your debt, and they have no proof of who actually owns that debt.”
Hagan points out companies have 20 years to collect on a judgment in Indiana, so a bad decision could come back to haunt you even if you currently pay your bills on time.
Old debt and judgments disappear from your credit report after seven years, but that doesn’t mean they don’t exist.
“So, the court agrees to garnishment and automatically your pay is taken out and you have no idea why,” said Hagan.
The class action lawsuit, filed last month in federal court, accuses numerous parties of pretending to be “dead companies,” and alleges they violated the Fair Debt Collection Practices Act.
Defendants include Aries Capital Partners, Aries Data Collections, Asta Funding, Palisades Collection, Palisades Acquisition, and Parker Moss.
Moss released this statement to Call 6 Investigates:
“Both the state and federal constitutions provide that anyone can file a lawsuit. At this point, that is all there is, a lawsuit. There has been no determination of wrongdoing by any judge or jury. We do not believe that we did anything wrong and intend to defend this lawsuit to a successful conclusion. However, we prefer to try this case before the judge and jury and not in the press, and therefore decline further comment.”
Call 6 Investigates also reached out to several other attorneys representing defendants in the lawsuit, and is waiting to hear back.
Consumer Mark Harrison wants to warn other people that dead companies can come after their money.
“It can happen to you and it’s happening to people every day, so you have to be careful,” said Harrison. “Do your homework.”
Call 6 Investigates is working for you to help you protect your money.
“If you don’t protect your rights, nobody is going to,” said Hagan.
Hofer said every time a new debt collector is assigned your debt, you’re supposed to get 30 days to dispute it.
“Every time your account changes hands, write them a letter and say ‘I dispute it and what makes you own this?’ said Hofer. “They have to prove they bought your debt.”
Hofer said he’s aware of at least five dead companies you should be on the lookout for: Great Seneca Financial Corporation, Centurion Financial Corporation, Colonial Credit Corporation, Monarch Capital Corporation and Platinum Financial Service Corporation.
Tips For Consumers
· Run a free credit report at annualcreditreport.com and look for outstanding debt
· Know old credit card debt and judgments disappear from your credit report after 7 years but can still exist
· Run your name through court records and look for any judgments: mycase.in.gov/default.aspx
· If you get a letter saying you owe debt or a judgment, you have the right to challenge it
· Ask your debt collector for “proof of assignment” or proof they actually bought and own your debt
· Ask a consumer advocate or attorney for help
· Consumer Advocates: consumeradvocates.org/