Collection Agencies – How Far Back Can They Reach?

Collection agencies often buy very old debts for pennies on the dollar, going after long-forgotten accounts. Whether it’s fair or not, you don’t have to be bullied by them.

Surprise Phone Call From A Bill Collector
I got a phone call a few months ago; a bad phone call. You guessed it – it was a debt collector. Never having gotten a phone call from a collection agency in my life, I certainly wasn’t expecting it. The reasonably pleasant voice on the other end informed me that I had an outstanding debt of several hundred dollars, owed to Verizon. Considering the fact that I haven’t had a land line in a few years and that Verizon isn’t my cellular carrier, I was confused and a little irritated.

Scrambling through past residences, I came to recall that I did have residential service through Verizon a few years ago, in California. Could the gentleman possibly be referring to that time period? If so, I certainly didn’t remember abandoning the account with an active balance or anything of that sort.
Amazingly, the outstanding balance on record was actually from 1994, when I lived in Manhattan. 1994. Fourteen years ago! Wow. Even more mind boggling was the fact that there was no Verizon in New York at that time and that the now-well-known nationwide telephone behemoth had reportedly inherited the debt from Atlantic Bell. Go figure.

Unpaid Debts You Don’t Even Remember? Yikes.
Needless to say, I had no recollection of this debt. I wasn’t lying to the guy – I really had no way of saying one way or the other whether I owed the money. Giving the agent the benefit of the doubt, I posed a hypothetical situation in which a person like me really did owe a debt like this. What, I asked, would have to be done to settle the matter and make a person like him stop calling?
He proposed that a person like me would have to cough up, say 50% of the sum owed… a couple hundred bucks, all told. Well, that wasn’t about to happen. My fear, though, had much less to do with the unrelenting parade of hounding I assumed this other party was willing to embark on to try to make me crack. I’m tough though. I have been desensitized by years of having dinner interrupted by carpet cleaning offers and kids selling magazine subscriptions so this collector would get a run for his money from me if it came down to that.
What I did desperately want to avoid was anything that might have a negative impact on my credit. When the agent told me that he did, indeed, have the power to report this to each of the nationwide consumer credit reporting companies: Equifax, Experian and TransUnion. Ouch. I told him I’d have to think on it.

Statute of Limitations – The Three Best Words in the English Language
I hung up the phone, disheartened and a little panicked. I quickly started to do my research. After some poking around on the Internet, what I discovered quickly brightened my mood. As it turns out, there is actually a strictly enforced statute of limitations on collection accounts. That amount of time is seven years – no more, no less. I also understand that individual states have their version of the statute of limitations.
I’m sure at this point the collection agent that I have been speaking with on our next call will conveniently make up some tale about the timeframe on that statute of limitations resetting once the debt was transferred to a new party – in this case, the agency from which he was calling. "Whatever, buddy" I will retort as I readily and joyfully awaited his next call.
I did wish there was some way I could have figured out whether or not the debt was legitimate, as I pride myself on paying all bills on time and in full. That said, it’s really hard to feel sorry for the phone company. I’m sure they won’t miss my money now after 14 years if I even owe it to them. On the next call from the collection agency, “statute of limitations” was all I needed to know before making my decision on how to proceed with the matter. My call with the collector was brief and the collection agency has never called back.
Before you jump in to pay a collection, especially one that you do not know about do your research. You have rights as a consumer and bill collectors have rules to follow to collect a debt from you.
More information on negotiating with bill collectors.