NCO is a junk debt buyer that re-ages debts for the purpose of being able to continue to report old debts which have expired either under the state Statute of Limitations for collections or the Fair Credit Reporting Act (FCRA).
I found this company listed on my credit report last year in two places. Not one to do anything blindly, I did some research. I discovered that NCO had been sued by the Federal Trade Commission for reaging debts and fined a whole lot of money!! http://www.ftc.gov/opa/2004/05/ncogroup.htm After this decision, NCO started calling itself a "factoring company" so that it could continue its illegal practices. However, a factoring company buys viable debt, lending small businesses an infusion of cash against outstanding invoices. NCO IS A DEBT COLLECTOR!!
First, I wrote NCO a letter, asking that it VALIDATE (not VERIFY) the debt. I also wrote one to the law firm which sent me a letter on behalf of NCO via certified mail-return receipt. I asked that it provide me with the following:
- Name and address of the original creditor
- A breakdown of the amount it claimed I owned
- Proof that it had the right to collect the debt for the original creditor
- A complete payment history (not ITS computer-generated figures
- A copy of the original credit card agreement
I informed the lawyer that, if he couldn't provide this information within 30 days, I wanted the adverse credit referenced removed from all of my credit reports. I also demanded that he cease all collection attempts during this time period, plus 30 days (which is the time I needed to review his response).
He responded 47 days later with an additional demand for payment. This is in violation of the Fair Debt Collections Practices Act (FDCPA). I responded by again insisting that the debt be validated or I would take legal action. NCO's attorney responded by sending a sheriff to my house with a summons to appear in court!!! I gathered up all the written information that I had, including old credit reports, etc. Then I went to the National Associate of Consumer Advocates website (http://www.naca.net) and found an attorney in my area. She charged me THIRTY DOLLARS to take on my case and countersued NCO for violating state and federal law. I paid her another $300 to sue NCO's law firm. Long-story-short, less than 5 months later, both settled out of court with me, paying me a good little piece of change. NCO was forced to remove the reference from all of my credit reports.
There a several of these bottom feeding collectors such as LVNV, Sherman Acquisitions, Unified Funding, Asset Acceptance, etc. If you get a letter from any company that states on the letter that it is a debt collector and it is not your original creditor, REQUEST VALIDATION!! To prevail in court, they need will need a lot of back-up evidence - none of which they probably have. But they are betting on the fact that YOU don't know that!!
A lot of people lose out by not paying attention to their credit reports and collection letters. Some people don't even show up in court, thereby getting a default judgment against them for a debt they might not owe or might be uncollectible due to the statute of limitations. Now the SOL varies from state to state, from 3 years to 20! CHECK THE STATUTE FOR YOUR STATE!!
Do not confuse the statute of limitations with the credit reporting period which is usually 7 years from the date of last activity, plus 180 days. NCO list the date that it bought the debt as the "date of last activity", which is illegal. That's how it might have ended up on your credit report. Normally, the date of last payment is considered the date of last activity.
First, do not promise to pay NCO "to make it go away". If you owe the debt, it could be beyond the statute of limitations and not collectible. A promise to pay can start the statute running again. You can be in a better negotiating stance if you do want to pay it off if the collection company realizes that it can't legally collect. They paid less than 5 cents on the dollar for the debt so they will take just about anything to remove it from your credit report.
This advice is for credit cards, which are considered "open-ended" debts, as opposed to written agreements like car notes. But, the law on collecting is pretty much the same. Collectors must abide by the federal and state laws. All debts have statutes of limitations but the time is different for written agreements than it is for open-ended accounts.
You can find a nice overview of credit collection at http://en.wikipedia.org/wiki/Debt_validation and a sample validation letter at http://credit.about.com/od/debtcolle...debtletter.htm.
If you are confused, consult with a NACA-referred lawyer first. But you should demand that NCO validate the debt in the meantime. If it doesn't comply, the NACA attorney will have the ammunition it needs to help you.