Dirty Collection Agency...

[candybarzz]

So a couple of years ago (yeah, you read that right), this CA attempted to collect a debt from my husband. I have POA since he is on and off active duty.

Within 30 days, I wrote them and asked for debt validation which they did not provide. They said, yeah, he owes it. So I said, you have 30 days to respond with DV and they didnt so i said dont contact us anyone, i consider this resolved. There isnt anything on his credit report either.

So every so often they send something say easter special pay now with some crazy amount like twice as much as what they said the original debt was.

So fast foward to now and we receive a 1099-c in the mail from them. These guy are trying to write this debt off and charge us with the income for our taxes for this year. they never proved he owed and debt or they they could collect it let alone write it off.

So now what do we do? any suggestions?

[candybarzz]

ps, i just called the IRS and they wont help at all. they say they assume the 1099 is legit. they say you have to go to small claims court. so unless someone else has some other idea, i guess that is what i have to do.

it seems crazy that anyone can just send someone else a 1099 and then you have to go out of your way to fight it.

[Trish]

Hi candy...
This just doesn't sound right to me. I don't see how they can write off a debt that they can't validate.......and then send you the 1099 form so you have to pay taxes on a debt that may not be yours. :confused:

I honestly don't have any first hand knowledge with this.....so let me see if I can find anything out and I will get back to you.

[Trish]

Ok......now this is totally new territory to me......so I've been doing some reading on this (plus I'm bored and it got me a bit curious :p ).

Turns out that some CAs are doing a lot of these as a way of recouping some of their money.
I did see (on a different forum) that one person had the exact same problem. They contacted their state's AG (this was in WV) and found out it is illegal for a CA to file a 1099 on a debt they cannot validate.

My suggestion is you do the same. Contact your AG and let them know the situation. Another thing you may want to do first is contact the OC and find out if they have already filed a 1099.......because if the OC already filed one, then the CA definitely can't (even if they could validate it).
IF the AG tells you the same thing (that it's illegal), then you immediately start filing complaints. The AG, the CA state's AG if it's different, the BBB, the FTC, ACA international......
Oh and while you're at it, you should check to see if the CA is licensed/bonded to collect in your state.

If what I'm thinking is true........you have a lawsuit on your hands.
If you chose to, you could find an atty through the National Association of Consumer Attorneys and file a civil suit. I would think this could be considered tax fraud. PLUS if you saved your paperwork, you have them on continued collection. So you just may have several violations on them.

Please keep me posted. I'm really curious to see how this turns out for you.

[candybarzz]

ill start researching this monday and ill def. keep you posted. thanks for the info.