Consumers generally not responsible for 'zombie' debts - 3TV | CBS 5

Consumers need to beware of zombie attacks. Not the walking dead, but dead debt that comes back to life. Most times you don#39;t owe a cent, even if the debt is real.

What do you do when a rogue debt collector sends you a letter demanding payment on a really old debt? It happened to Debi Rockey.

This was an attempt to collect a debt and I owed Arrowhead Hospital $300, Rockey said.

Rockey remembers her brief hospital stay and says she paid that debt in full back in 2002. But now, it#39;s come back to life, it#39;s a #3;zombie#39; debt, and the collection agency wants her to pay again.

You#39;ve got to be kidding. This was like thirteen and a half years ago, how am I going to prove to them that I paid this, Rockey said.

Rockey called the collector asking who has records from 2001 laying around. She says the collector didn#39;t care how long ago it was, it was her responsibility to prove that she paid it.

I was talking to my dad and I said I think I#39;m going to contact Dave Cherry and see what he says about that, Rockey said.

Rockey doesn#39;t have to prove anything. Arizona Revised Statute 12-548 sets a six-year limitation on debts. Meaning if a debt has not been collected within six years of first default, the consumer is under no obligation to pay, even if the debt is real.

But some people decide not to fight zombie debts. They figure the amount of money isn#39;t worth the effort. That#39;s a bad idea, know your rights instead.

If it#39;s over six years old, then you don#39; have to worry about it, it#39;s just too old, they#39;ve wasted their opportunity, Rockey said.

Arizona Revised Statute 12-548 does not apply if a judgment or lawsuit was filed against you; in those cases the debt remains valid indefinitely.

But with contract debt, including credit cards, if creditors don#39;t get you to pay within six years of when the debt first goes into default, they have the right to keep asking, but you are under no obligation to pay.

In this case, the collector cannot make a negative notation on your credit report; it is not legal. If they do anyway, file a dispute with the credit bureau and it should be removed right away.

Copyright 2014 CBS 5 (KPHO Broadcasting Corporation). All rights reserved.


Credit Card Glossary: Terms and Definitions

Confused by credit card terms? CreditCards.com's glossary of credit card definitions will help. From account holder to Regulation Z, we have defined the most-common and most-confusing credit card terms.

Zombie debt Zombie debt is old credit card and other debts that are beyond the statute of limitations, so a debt collector cannot successfully use the courts to collect them. Although these debts no longer have the courts as an avenue of collection, there's nothing to prevent debt collectors from asking consumers to pay them. In recent years, the debt collection industry has expanded, creating more agencies and lengthier efforts to collect. So from the consumer's perspective, debts don't die, they rise to live on and on. Like zombies.


zombie debts

“Zombie Debt” is debt that you cannot be sued for because the statute of limitations has run. It’s called Zombie Debt because it should be dead, but unscrupulous debt buyers keep bringing it back to life.

How does this happen? Often, a “debt buyer” purchases debts from another company and then works to collect it using phone calls and letters. Often, these debts are purchased, sold, and resold many times. The lack of information that these debt buyers and collectors have about these debts is alarming. In a 2009 study, the FTC showed concern that debt collectors, including debt buyers, may have insufficient or inaccurate information when they are working to collect on debts. This can result in debt collectors trying to recover from the wrong person, or recover the wrong amount, and/or filing a lawsuit past the statute of limitations.

What happens? The less reputable debt buyers and collectors use intimidation, harassment, deception, or other abusive tactics to get their victims to pay or make payments on the debt. Because the debt buyers have literally bought the debt for pennies on the dollar, any collection on the debt generally amounts to a huge windfall for the debt buyer. Worse yet, some of these debt collectors will receive large payments on a debt from an individual, then sell the same debt to another debt buyer, resulting in a new round of collection tactics by another company for the same debt amount or higher. In the worst cases, some debt buyers will file lawsuits because they realize many people do not know there are consumer protections against zombie debt collection. When a lawsuit is filed, the court only has the information supplied by the debt buyer filing the lawsuit. If the individual being sued does not respond to the lawsuit, or does not respond with a recognized defense, then the debt buyer will seek a default judgement and garnish wages.

What are my rights? Consumer protections provided by the West Virginia Consumer Credit Protection Act and the Fair Debt Collection Practices Act make it unlawful for debt buyers to file lawsuits for Zombie Debt. Additionally, in West Virginia, every debt collector is required to provide notice if they are trying to collect a zombie debt. Unfortunately, some debt buyers still try to collect zombie debts because they don#8217;t follow the rules. These debt buyers won#8217;t provide the required notices either because they don#8217;t do their homework on the history of an old debt, or because they are willingly breaking the rules because they believe the person they#8217;re going after will not seek legal assistance.

At Skinner Law Firm, we represent clients who have been unlawfully contacted by debt collectors. If you believe you have been subjected to unlawful collection tactics, then contact us for a no cost consultation. We can stop a lawsuit in its tracks and even obtain money for our client when the debt collector has broken the rules.

Stephen Skinner is the lead attorney for Zombie Debt cases.

Zombie debts

Since 1969, Skinner Law Firm has been dedicated to helping people with wrongful death, injuries, insurance issues and consumer fraud.


Kill zombie debts that outlast bankruptcy

Zombie debtsWhen people#8217;s debt are canceled by a bankruptcy judge, the #8220;zombie#8221; debt should be cleared from their consumer records, too. The Consumer Reporting Fairness Act of 2015 would make it happen.

Specifically, the legislation would force major banks and other lenders to notify credit reporting firms after bankruptcy. Without the change, the outdated credit information can linger and make the consumers inaccurately appear to be mired in unpaid debt — harming their credit scores and ability to get future loans at low interest rates. The zombie debt could even cost them a job or an apartment. Given that the point of bankruptcy is to give people a fresh new start, these zombie debts should be wiped off once they#8217;ve been legally discharged.

The bill was introduced by Senators Sherrod Brown (D-OH), Jeff Merkley (D-OR), Richard Blumenthal (D-CT), Dick Durbin (D-IL), and Al Franken (D-MN), with the backing of numerous groups including Americans for Financial Reform, Consumers Union, National Association of Consumer Advocates, National Association of Consumer Bankruptcy Attorneys, and National Community Reinvestment Coalition.


zombie debts

So what is zombie debt? Your phone rings and the agent on the other end informs you that you have not paid your debt.

You have no idea what debt he is talking about but his going on about a 6 year old cellphone account you can’t ever remember taking? The debt collector on the other end says: “Just pay R100.00 that’s all we’re asking for” DONT.

Welcome to zombie debt and as most people ask me: “can it come back to haunt me?”

If you#8217;ve ever watched a zombie movie, The Walking Dead or Z Nation T.V. series, then you know all about zombies. These back-from-the-dead creatures are nearly impossible to kill and continue to haunt you despite your best efforts to stop them. Shooting them doesn#8217;t work; tearing off their limbs doesn#8217;t work. Even blowing them up sometimes doesn#8217;t work. Zombie debt or “prescribed debt” as it’s known in South Africa is sort of like that.

Can collectors contact you many years after you last had dealings with a company and demand that you pay some alleged debt? Yes, they unfortunately can!

The Prescription Act is intended to give consumers some protection against debt collectors hounding us to pay a very old, inflated debt which we can barely recall.

But it does not preclude collectors from “chasing” prescribed zombie debts.

It is up to the consumer to know about prescription and raise this as a defense in the face of a demand for payment. If they don’t, they are fair game. If ever there was a case to show knowledge is power, this is it.

How do you know if a zombie debt has prescribed?

Zombie debt or Prescribed debt can be explained as old debt that has not been acknowledged over a period of three years.

More specifically, a zombie debt is prescribed if in the past three years, you have not:

  • You have not acknowledged owing the money in any way or agreed to pay it in the past three consecutive years, either in writing or verbally
  • You have not made any payment towards settling a debt, promised to make a payment to the outstanding debt amount
  • You have not acknowledged or been summoned in respect of it to make a payment by a creditor for the debt within the past three consecutive years

If all fall within this criteria the zombie debt has prescribed, and you can raise this as a defense when asked to pay such a debt.

What type of zombie debt does prescription relate to?

These are examples of zombie debt which can become prescribed if the correct rules are followed:

  • Retail accounts
  • Credit card accounts
  • Telkom accounts
  • Personal Loans / Pay day Loans
  • Gym memberships
  • Cellphone accounts
  • Monies owed on vehicle finance

Not all zombie debt prescribes in three years. A 30 year prescription period relates to;

  • A home loan
  • Municipal accounts
  • Monies owed to SARS
  • Your TV License

What does this mean for you as a consumer?

Everyone has to pay off their debt. It is wrong not to pay it off. “However”, it is also wrong for a debt collector or credit provider to demand payment many years after you have defaulted on the account.

If your zombie debt has prescribed;

It has been dormant for three of more years, a debt collector cannot ask you to pay off your zombie debt and it is against the law if they do.

The National Credit Amendment Act, published 13 March 2015, prohibits the sale and collection of Prescribed Debt.

Thus, you do not need to know about prescription and will not have to raise it as a defence in order to prevent you from having to pay for the debt.

Unless the debt collector or credit provider can prove that your debt is not prescribed, tell them to stop harassing you. It is advised that you also put this in writing, so that there is a record of it.

If they persist, request the original loan agreement/contract, proof of default, the outstanding amount and interest accrued. This should stop the debt collector from harassing you.

If your debt has not prescribed;

If you have acknowledged your outstanding debt within a period of three years or have made a payment, your debt remains valid and you are accountable for paying it off.

If you are finding yourself in this situation where you have been contacted by a debt collector on an account three years old or longer; and unsure as to how to proceed

With over 11 years of specialized experience in the debt legal field Oyisa United Debt Specialists is committed to assisting South African consumers in this regard.

We’ll launch a Prescription Debt Investigation, yet another “FREE” Phalanx© service that we offer South African consumers.