Debt collectors are bad news. Maybe the only thing worse than a collector is a creditor who's mean and nasty.

But there is something even worse than a creditor who is mean, nasty and trying to get you to pay a debt that is not even yours!

It's becoming an increasingly larger problem that collections agencies are after people to pay phantom bills, even though those people never owed a dime. Here's an example: The Federal Trade Commission states that as much as 80% of the debt being collected by Capital Acquisitions and Management (now out of business) was made to people who never owed the debt in the first place. WOW!

Collection agencies get the wrong people all the time, but don't listen to their bluffs; you are not liable for debt in any way if you never spent the money. If you actually owe money, get on a written plan and pay it off using the debt snowball. Just remember that these people lie and break federal law on a daily basis to get their money, so if you don't owe, don't let them bully you into paying.

That being said, it's important to be vigilant about checking your credit report for a few reasons. Obviously, you want it to be accurate, but if people are calling you and telling you to pay up, you might be a victim of identity theft. Someone might be running up debt in your name. Make sure to pull your credit report once a year and make sure it's accurate.

Don't let it sneak up on you. One man was called by a New York agency on a debt that he didn't owe, but he ended up paying it because he was trying to get a loan and the $394 phantom debt showed up on his credit report. He paid it off because he was in a hurry to get the loan. The point is not that you should get a loan (you shouldn't); it simply means that letting phantom debt go for too long will cause you to make bad decisions because you feel pressure.

If you are being harassed over phantom debt, send the agency a certified letter, return receipt requested, stating that the debt isn't yours and for them to stop calling you. If they persist, you can file a complaint with the FTC or your state's attorney general office.

Get your free credit report today.

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