Residents of Southern states file more complaints than other states in the U.S. about creditors trying to collect debts consumers don’t owe, according to a recent study by LendingTree. Eight of the ten states with the most complaints to the Consumer Financial Protection Bureau (CFPB) were in the South, with Georgia leading the way in Southern states for erroneous debt collection attempts.
Meanwhile, on the East Coast, the worst state in the country for complaints filed by consumers claiming they don’t owe a debt that a creditor is trying to collect is Delaware, with Maryland not far behind.
Other findings from the Lending Tree study include:
Many claim they never owed the debt
Nationwide, nearly half (49 percent) of consumers who complained to the CFPB about being hounded for a debt they don’t owe say the debt isn’t even theirs. Another 30 percent report the debt resulted from identity theft. Around one in five say the debt may have been under their name but is no longer owed, with 17 percent reporting they paid off the debt. Around 3% say they don’t owe the debt because it was discharged in bankruptcy.
Collectors still calling about paid debts
Delaware tops the list of states with the most complaints for collection calls about debts consumers paid off or discharged in bankruptcy, with 11.7 complaints per 100,000 adults. Other states in the top ten ranking for complaints about debts consumers already paid:
- Georgia (10.9)
- Nevada (9.6)
- Maryland (8.0)
- Florida (8.5)
- Wyoming (3.8)
- Texas (7.1)
- Virginia (6.8)
- Tennessee (6.6)
- Arizona (6.4)
Credit card debt a target for false collections
Nearly one-third of complaints were for collection attempts on fraudulent or non-existent “other debt.” And more than one-quarter (26 percent) of consumer complaints to the CFPB for erroneous collection attempts were for credit card debt. Nearly one-quarter (23%) didn’t know what kind of debt they were being hounded for. Roughly 14% were being pursued for a medical debt they say they don’t owe.
Other types of “mystery debt” include:
- Auto debt (3.2 percent)
- Payday loan debt (1.8 percent)
- Mortgage debt (1.4 percent)
- Federal student loan debt (0.9 percent)
- Private student loan debt (0.8 percent)
What to do if you’re pursued for a debt you don’t owe
If you’re being hounded for a debt you don’t owe, federal and state consumer protection laws may protect you from having to pay the debt or buy some time while not being harassed by a collection agency.
Visit the CFPB website to file a complaint if you’re being pursued for a debt you don’t owe. If you dispute a debt within 30 days of initial contact by a collector, the creditor must stop all collection activity until it provides verification that you actually owe the debt.
“There are federal laws that limit what collectors can do,” says LendingTree chief credit analyst Matt Schulz. “Generally speaking, debt collectors can’t claim to be from the government, threaten to have you arrested for not paying your debt, force you to pay debt that you don’t owe or harass you verbally or physically. If that starts happening, don’t stand for it. Complain to the CFPB and make sure that you’re heard.”
