The big concern is that a debt collector could put a black mark on your credit report and thereby lower your credit score, which as we all know is critical to getting the best rate on a mortgage or car loan.
This is especially alarming in light of a recent report that shows once a mistake is made on your credit report, it is extremely difficult to get it removed.
"I write down what I spend on a daily basis. I've been doing that for years," Angela Holland said.
So Angela was shocked when Palisades Collection, LLC told her she owes money for an old Verizon bill.
Angela says she's never even been a Verizon customer.
She says she tried to tell Palisades that but wasn't getting anywhere with the company.
Meanwhile, former federal employee Frank Stack is now suing Palisades for intent to harass and deceive and violation of the Fair Debt Collection Practices Act.
"They called me at the base number, on my cell number, and my home number. It was almost every day I was getting phone calls," Stack said.
The lawsuit says even after Stack's attorney sent Palisades a Cease and Desist Order, it kept calling for 13 more days.
And the lawsuit says Stack paid the alleged credit card debt a decade ago.
Action News spoke with Shaun Neal who used to work as a consultant at Palisade's offices in Englewood Cliff, New Jersey.
"My allegations are that they routinely broke the law," Neal said.
Neal has filed a complaint against Palisades' parent company, Asta Funding, through the Department of Labor.
He alleges his consulting company was fired because he informed senior management of wrongful and unethical company activity.
Neal says Asta does nothing to validate a debt exists or that the balance is correct.
"I think it's horrible and that's why I complained," Neal said.
Action News visited the company's North Jersey office.
"I'm sorry but there's nobody you can speak to," a woman in the office said.
Meantime, Frank's attorney says the most important thing for consumers is to know your rights.
Debt collectors cannot call during certain times or call certain numbers you specify.
"You should keep track of when they're contacting you and ask them to send you information in writing about the debt," Amy Bennecoff of Kimmel and Silverman, PC said.
And be advised that in New Jersey the statute of limitations on debts is 6 years, in Pennsylvania it's 4, and in Delaware it's 3 years.
"That's actually a common violation. They'll threaten to sue you when it's beyond the statute of limitations," Bennecoff said.
They may also put a black mark on your credit report. It's up to you to see it and dispute it.
"I'm concerned about it and I'd like to keep it as spotless as possible," Holland said.
Palisades Collection denies all allegations of liability and damages in regard to Frank Stack's case, and says it committed no violations with reference to Ms. Holland, but that the Holland matter is now closed.
Palisades' attorney says that it complies at all times with all federal and state acts and regulations governing its activities.
As to Mr. Neal, Asta Funding denies all of his allegations and says his company was fired for breach of contract. Asta intends to file a Motion to Dismiss.
For more info on your rights and to file a complaint if you feel harassed by a debt collector, check out these links: