Vanquish a phantom debt for good

The phone rings. You don't recognize the number, but you answer anyway. It's a debt collector demanding immediate payment on a debt that doesn't belong to you, or one you've already paid. Suddenly you're facing a phantom — a phantom debt, that is.

That debt might not belong to you — but telling that to the collector won't earn you a reprieve. Here's how to do away with phantom debt.

HOW IT HAPPENS

Last year, 41 percent of the debt collection complaints received by the Consumer Financial Protection Bureau concerned repeated attempts to collect a debt the consumer didn't owe — more than any other type of collection complaint.

Phantom debts have two main sources:

— Misinformed debt collectors: Debt files can be sold from one collector to another, and over time errors and incomplete information can build up. This might lead a collector to contact you about a debt you've already paid or one that was never yours in the first place.

— Scam debt collectors: If you receive a call from a collector demanding immediate payment on a debt you don't recognize, you might be talking with a scammer. The same goes for a call about a debt you recognize, but with an incorrect balance.

High-pressure tactics and references to a debt you don't recognize are red flags.

"What makes phantom debt so tricky is that there are a lot of unknowns around the debt," says Cristina Miranda, project manager at the Federal Trade Commission's division of consumer and business education. And a collector's goal isn't generally to provide answers — it's to get you to pay.

Even a legitimate collector might not be very helpful. And scammers will "deceive and intimidate and harass people into paying debts they don't owe," Miranda says.

Don't make any rash decisions, such as sending a payment to appease the collector. "When you get a call like that, just stop," Miranda says. "Think about what your legal rights are and what you can do to assess if it's a real debt or not."

VANQUISH PHANTOM DEBT IN THREE STEPS

Your consumer rights under the Fair Debt Collection Practices Act give you tools to fight back against collectors hounding you for a debt you don't owe.

1. GET THE DETAILS: You have the right to demand information from debt collectors, including their agency's name, physical address and phone number.

The first time a collector calls about an unfamiliar debt, ask for a validation letter confirming details. If the debt is legitimate but already paid, these details will help you identify the account. And scammers might be scared off by the request.

Communication should be a one-way street, with information flowing to — not from — you. Safeguard personal data, such as your bank account details and Social Security number, no matter how hard a collector presses you to "confirm" them.

2. ROUND UP EVIDENCE: Send a written request that the collector stop contacting you for payment on the debt. The FDCPA says collectors must comply.

If you're dealing with a misinformed collector, use this time to gather proof you paid. Then notify the collector; consider sending a copy of proof of payment and using certified mail to ensure receipt.

Finally, check your credit reports to verify the debt is listed as paid. If not, dispute the credit reports that have the error.

If you're dealing with a persistent scammer who wasn't scared off, cite your FDCPA rights and demand no further contact. That might be enough to make scammers move on to an easier mark.

3. CALL IN THE BIG GUNS: If the collector won't back down or respect your consumer rights, file complaints with authorities who have the power to investigate: the Federal Trade Commission , the CFPB and your state attorney general's office.

"Be very proactive in regard to any debt that a collector is asking you to pay, especially if you don't recognize it," says Vivian Padua, a certified financial coach in San Francisco. "Take care of these accounts . (so) you can move on with your life."

This article was provided to The Associated Press by the personal finance website NerdWallet. Sean Pyles is a writer at NerdWallet. Email: spyles@nerdwallet.com. Twitter: @seanpyles.