On this episode of Two Frugal Dudes, we’re learning how to silence debt collectors, fix credit report errors, help with identity theft and prevent property theft while we’re at it. We’re joined by Sonya Smith-Valentine, founder and president of Financiallyfierce.com.
Sonya is a CPA turned attorney who specializes in financial litigation. Her main role was representing consumers who have been wronged by banks and corporations, in a David and Goliathesque legal battle. For Sonya, nothing was more rewarding than watching a corporate giant write a check to the underdog.
Over time, the back-to-back trials became exhausting. Sonya decided to shift her focus from the reactive mindset of legal work to a proactive approach, helping people avoid the problems she’d defend them from in the first place.
There are two types of debt collectors: those who are employed by the company you owe and the third-party agency businesses hire to follow up with you. There are different rules for the two types.
You are not obligated to talk to third-party agencies. You are entitled to tell them to stop contacting you, as is your legal right. If they continue to contact you– and most will, because many consumers are unaware of their legal rights– you can sue the collection agency for not following the Fair Debt Collection Practices Act (FDCPA).
If you follow the Federal law rather than state laws, you can usually have your lawyer fees rolled into your winnings. Sonya has experiences in which clients’ jobs were put on the line due to the constant harassment and children were threatened. According to one high-level manager at a credit agency, dealing with litigation is cheaper for these companies than correcting the behavior.
Some changes have been made as a result of legal precedence in regards to creditor behavior, but there’s still a way to go. Before taking legal action, you can file a complaint with the Better Business Bureau where the collector’s headquarters is located or file a complaint with the Consumer Financial Protection Bureau. The FTC does not handle individual complaints.
Credit Report Problems
If you notice a problem on your credit report that is incorrect, send a letter to headquarters addressed to the office of the president rather than calling or mailing customer service. Rather than struggling upwards through bureaucracy, start at the top of the food chain.
If you think you’re a victim of identity theft, first you should pull all three of your credit reports. Make a list of transactions you believe are not yours and file a police report. Call the credit companies and highlight the issues. You may be required to fill in a lot of paperwork as a result.
You can protect yourself by freezing your credit reports during times you don’t have any upcoming credit-related expenses to consider.
Frugal Tip of the Week
Sean’s bikes were stolen from his nice, safe neighborhood. The frugal tip of the week this year is to always lock up your belongings because unfortunately, crimes of opportunity exist even in nice areas.
Where Our Money Went
Sean took advantage of a Sears clearance and invested in four new pairs of docker shorts to replace his previous four pairs of shorts that got him through the past few years. So far, the self-proclaimed “perfect shorts” have been living up to their marketing claims.
Kevin got to pay himself from his Profit First count, which acts as a bonus on top of regular paychecks. Where will that money go? That remains to be seen.
Show Links & Related Episodes
- Financially Fierce
- Frugal Cashmates Community
- Profit First