Diversified Consultants, Inc Debt collector's bullying and threats. Jacksonville, Florida

Welcome to the ugly side of the world of credit and debt! You seem new to this, so I will take the time to give you a full-on attack plan. I'm a long-winded fella to begin with, so this will take a while. But I guarantee you that, if you follow the steps I have lined out below, you will have done everything you can do short of hiring a lawyer. Beyond that, you will put a stop to the phone calls and verbal abuse. YOU will take control of this situation.

Debt collectors are some of the nastiest people going, but bear in mind that they have a job to do, and they are a necessary evil in our society. That being said, the way you are doing things right now is giving them all the control. You need to take back the reins. I'm going to try to help you do that in a few simple steps:

1. Take a deeeep breath and let go of your emotions regarding this situation. By getting upset you are putting your anger and frustration in the driver's seat. This will get you nowhere (you've probably figured that out already).

This is a business/legal issue. It's not a personal relationship or anything else worth getting all that upset about. In the long run, this whole matter will be of little consequence.

2. Forget about lawsuits or any other kind of vengeance for the time being. You don't have a case against this agency (yet). They are not required to be nice to you, and what you have described is NOT blackmail. Also, even if you did have a case, you're never going to get more than $1000 out of a lawsuit against a collection agency except in very limited and very complicated circumstances.

Ok, so now let's fix your problem . . .

3. First you need to find out which credit reporting agencies (CRAs) this debt has been reported to. You can do this by going to annualcreditreport.com and obtaining your government-mandated free credit reports (you can only use this service once per year). DO NOT go to ANY other site offering free credit reports. On a side note, NEVER use sites like freecreditreport.com - always use annualcreditreport or go directly to the individual CRAs.

Review the credit reports and look for any entries by T-Mobile (or whatever their parent company is called) and/or this collection agency.

4. Now you need to dispute the amount of the debt through the formal channels set up bythe CRAs. Each CRA has an online dispute form (one of them requires that you print it out and mail it, however). Find and complete these forms. Be as specific as possible. State that you do not owe the debt at all and, if you do owe something, it is not as much as they are claiming. Print/make copies of everything you submit.

Now, everything that you mail out (and this goes for the other steps as well) has to be sent by certified mail with return receipt requested. This way you can show not only that your documents were received, but also when they were received. This may be necessary down the road.

Once the CRA receives your dispute, they are required to make a notation on your report stating that the debt is disputed. They are also required to demand that the collector/creditor provide evidence that the debt is valid and that the amount claimed is correct. If the collector/creditor fails to provide this evidence, the CRA is required to remove the item from your report. Bear in mind, however, that the collector does not have to prove that you owe the debt. They merely have to come forth with some documentation showing that the debt exists and that you owe it.

5. Next, you need to inform the collection agency that you are disputing the debt. There is no per se requirement that they do anything in response to your over-the-phone dispute. They DO, however, have to take action in response to a written diuspute. Send them a simple letter wherein you explain that you are disputing your liability on the debt as well as the amount of the debt claimed ("I don't owe this debt and, if I do, then I don't owe as much as you say"). Attach any evidence you have that substantiates your dispute.

Upon receiving your dispute, the collector/creditor must inform the CRA that the debt is disputed (yup, this means that both the collector and the CRA have a duty to ensure that your credit report reflects the true status of the debt). Also, if they don't already have it, they must obtain documentation from the original creditor showing that you do have liability on the account and that the amount claimed is correct (again, absolute proof is not required).

If they cannot obtain verification (again! verification is not the same thing as proof!) of your liability on the debt then they will likely be prohibited from taking any further collection action, and they will likely be required to inform the CRAs that the debt should be removed from your reports. Likewise, if they can only verify that you owe a portion of the debt, they should be prohibited from collecting any more than that, and they must then inform the CRAs of the adjustment of the amount claimed.

6. Now you want to stop the collection agency from calling you or anyone else in regards to the debt. A simple google search will provide you with some fine "cease and desist" templates. However, I would advise that you make sure the letter only orders them to cease telephone communications and states that the order is not intended to cover written communications. This way they can still advise you by letter of any changes made to your account, and you won't be forcing their hand (prompting them to bring a lawsuit) by cutting off communications entirely.

7. Sit back and wait. You should hear from each CRA and the collector within 45 days.

8. If each dispute is resolved in your favor (the debt is either wiped out or reduced to what you think it should be), pay off any remaining balance as soon as possible. Check your credit reports 30 days after you've settled the account to ensure that the report has been appropriately updated.

If none of the disputes are resolved in your favor you will have to either: pay the full amount claimed (either in a lump sum or via a payment plan); try to negotaite a lower settlement amount; file bankruptcy; ignore the situation and hope it will go away before they sue you; or take the matter to court and try to obtain a "declaratory judgment" in your favor (a judgment ordering them to reduce the amount owed or wiping out the debt entirely, very complicated and not really practical for a $500 debt).

If any of the CRAs resolve the dispute in your favor, but the collector does not, then the items will be removed from the pertinent credit reports, but the collector will nonetheless still be able to take action against you. However, your ability to negotiate a favorable payoff settlement is greatly increased in this circumstance because they can't hold some or all of the credit reports over your head.

You won't run into the situation where the CRA finds against you but the collector finds in your favor. That's just not going to happen. At any rate, be sure to check the reports a month or so after everything is said and done to ensure that the required updates have been made.

After you have sent out your disputes and the cease and desist letter, and while you are waiting to hear how the disputes are decided, I urge you to familiarize yourself with the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). ALL of the advice I have just given you is based on those two very important laws. You can find both of these Acts, as well as some great explanatory material, on the FTCs website at ftc.gov. Avoid sites that are aggressively anti-collection agency (such as budhibbs.com - I know the RoR readers love this site, but there is alot of misinformation there).

9. If you haven't heard back from everybody within 60 days then you need to make some calls/write some letters to figure out what's going on.

Follow these steps and you'll be in the best position possible without a lawyer. You will want to get a lawyer, however, if any of the following occur: 30 days have passed since you filed your disputes and the item is still on a credit report and is NOT showing up as disputed; ten days have elapsed since you sent out the cease and desist letter and you are still receiving phone calls; ANY other person (relative, neighbor, employer, etc.) is contacted regarding the debt; or, finally, you receive any threat of legal action or an actual summons.

May the force be with you!