Some consumers may easily believe banks have our backs and will always look out for our best interest. Then there are the consumers who are a tad more realistic and know banks can be trusted as far as we can spit.
In 2016, Wells Fargo was fined $185 million for fraudulently opening checking and saving accounts. Some of these accounts included credit cards which some had an annual fee. Since the “fraud” accounts with the annual fee were unknown to consumers and went unpaid, Wells Fargo sold the accounts to third party collection agencies.
In 2017, the CFPB reported a total of 234,817 complaints from consumers who had checking accounts as well as loans opened without the customers knowledge. The unknown loans were then sold to third party collection agencies. Consumers complained they were being hounded and harassed by third party debt collection agencies on behalf of accounts sold by Wells Fargo.
Banks, financial institutions and debt collectors are finding new ways of scamming consumers into paying money for illegal, illegitimate debt in order to raise profits. Consumers need to be aware of their financial institution selling debt to several collection agencies. This is illegal and against the United States Consumer Credit Code and the Fair Debt Collection Practices Act.
Do NOT pay or promise to pay anything until you have requested the validation of debt and you know that;
- the debt is yours
- the debt is not out of statute of limitation
- the collection agency attempting to collect the debt is licensed under the state attorney general’s office (IN YOUR STATE).
According to the FDCPA if you dispute a debt or any portion thereof, the collecting agency is to comply and mail to you (within thirty days of when they receive the letter) the validation of the debt. This includes the contract with your signature. If the acting collection agency fails to respond to you within the allowed thirty days, then you do NOT under any circumstances owe that debt.
Use the law text below to mail a dispute letter to the collection agency.
Fair Debt Coll. Prac. ¶ 1.06
Fair Debt Collection Practices: Federal and State Law and Regulation
Current through the January 2013 Update
Chapter 1. Federal (FDCPA Analysis)
¶ 1.06. Prohibited Conduct and Disclosures
¶ 1.06 DISPUTED DEBTS
If the consumer notifies the debt collector in writing within the 30-day period described in section 1692g(a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector may not continue attempting to collect the debt, or any disputed portion thereof, until he or she obtains verification of the debt or a copy of the judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. The Act does not specify what constitutes verification, however, leaving that as an issue to be fought out between consumers and debt collectors.
If the debt is founded upon a written agreement, it is certainly advisable to provide as verification a copy of that document. That, however, may not be enough, as a copy of a contract does not explain the charges being collected nor the manner in which the balance was calculated. Regardless of whether a contract signed by the consumer is available it seems appropriate to furnish an invoice, statement of account, or some other document that would evidence both the debt and its relationship to the consumer. Merely writing back to the consumer and stating: “I hereby verify that you owe the debt” is an invitation to be sued. Congress gave consumers the right to request and receive verification, and that right is meaningless unless the verification sent to the consumer conveys some useful information.