Zombie Debt and Phantom Debt

The week after Halloween, the Federal Trade Commission announced it had slayed some zombie debt and phantom debt collectors. The zombies and phantoms you saw trick-or-treating on your street did not cause you to lose sleep. But, zombie debt and phantom debt cause real life nightmares for consumers.

Zombie Debt and Phantom Debt Cause Real Life Nightmares for Consumers

The nightmare starts when a consumer is looking for a loan online and enters their personal information (Social Security Number and their Employer’s Name, Address and Phone Number) into website promising to help with loan approvals. The loan may not be approved. The consumer never incurs the debt.

But, the owner of the website sells the consumers’ information to a scam debt collector. 

The scam debt collector turns that information into “zombie debt” or “phantom debt” and starts harassing the consumer to pay a debt they do not oweOftentimes the harassment includes a harassing calls to the consumer’s work that cross the line and violate federal law.

Listen to an example of a debt collector trying to collect a zombie debt by calling a teacher’s principal at the school. Go to the 1:50 mark of this video:

Phantom Debt Collector Calls a Teacher’s Principal

“She needs to come to the phone or we are going to have someone from St. Charles County bring her in for questioning. So we are trying to do it by the phone.”

“Sorry she’s in the classroom right now.”

“Really. So how will the principal feel when someone from the Parish comes out there and pulls her out of the classroom because she is under investigation for committing fraud in front of the students? How about I speak to one of the principals ma’am?”

“I am one of the principals.”

Then the scam debt collector goes on insult the principal and tells her, “We will contact the students and let them know what is going on here.”

Two full minutes of harassing a teacher’s boss over a zombie debt and phantom debt the teacher did not owe.

That is one phone call.

Can you imagine trying to talk reason to that debt collector after he calls you at home, on your cell phone, and at work over weeks and months trying to collect zombie debt and phantom debt?

That is a real life nightmare.

Scam debt collectors are increasingly targeting consumers with zombie debt or phantom debt, which violates the Fair Debt Collections Practices Act. These scam debt collectors count on consumers to pay them a few hundred bucks to end a nightmare the scam debt collector created in the first place.

You do not have pay these scam debt collectors to stop the nightmare of zombie debt and phantom debt. Contact Crowder McGaha, LLP instead.

If you are being harassed by debt collectors, we can advise you whether or not the debt collector is violating the Fair Debt Collection Practices Act.