How to deal with bad debts

Debt collection disputes can be a nightmare to manage, especially when the debt in question is passed from one company to another for collection.

By the time Anca Popviciu opened a letter from Baycorp, it was with four different companies and she had already proven herself to be a victim of fraud, not a questionable debtor.

“I thought it was done. I thought it was over and I fixed the problem,” Popoviciu said.

The new mum had fought to clear her name almost two years ago.

“My limited knowledge of Baycorp is that they are way bigger and I’m going to have an even bigger fight on my hands now.”

Her first fight had been with Genesis Energy and the company she sold her debt to, Southern Receivables, which in turn is part of another debt collection firm, Collection House.

Apparently, she had a “bad debt” – a badly overdue electricity bill – of $419.75 with Genesis Energy, but Popoviciu knew it couldn’t be hers. The account was seven years old and was open for an address in Rotorua, when she lived on the Kāpiti Coast.

“I had to go prove it wasn’t me, so I had to file a police report. I then had to provide proof of where I was living at the time.

In early 2021, Southern Receivables accepted that it had to be fraud – a clear case of identity theft – but only verbally, over the phone.

Plus, she had to resubmit all that evidence to Genesis Energy. She also asked how someone could have misused her name to open an account.

“They didn’t want to tell me anything, and they never wrote anything down either.”

Harassed and pregnant, she gave up thinking the matter was solved – after all, that’s what two companies had now told her.

Eighteen months later, she was forced to start over with Baycorp now suing her for a debt that had come back to life.

Back on the phone, Southern Receivables again admitted to Popviciu that it appeared he hadn’t closed the case properly before it was sold back to Baycorp, along with a slew of other debts to collect.

“I basically begged the guy to please put this in writing, please alert your team leaders,” she told Fair Go.

Baycorp escalated the matter when Fair Go called – and promptly apologised.

“The account was assigned to us in error. We have now closed the case,” says Amanda O’Neill of Credit Corp, the Australian owner of Baycorp.

The owner of Southern Receivables added, “Unfortunately, due to human error, the account was not closed properly.”

“This happened despite notification from the client for which we apologize,” says Collection House NZ Country Manager Lance Crooks, who also sent Popoviciu a signed letter confirming the account was closed without any debt from His part.

Genesis Energy says someone misused a copy of Popviciu’s driver’s license to open the account which “came back from the external credit-checking agency with a maximum passing score and no issues,” the official said. company spokesman Chris Mirams.

“Anca contacted us several times to obtain confirmation that the debt had been retracted and what had been provided to open the account.

“We focused on the debt being retracted and not on the other information she had requested. We will apologize to her for that.

Genesis also offered to arrange a credit with the power company that Popviciu actually uses. She now considers this case closed.

For those who are still in doubt that they owe a debt, it is important to remember that you should dispute it as soon as possible with the collection company and insist on written communication. You will need to prove your case, but you should only do this once.

According to the Federation of Financial Services, according to their structure, most debt collection agencies must be registered in the register of financial service providers (FSPR).

“A requirement of this registration is that all of these entities must belong to a government-approved independent dispute resolution system,” said the Foundation’s executive director, Lyn McMorran.

Whichever one the debt collector uses, he must say so prominently on the invoice he has sent.

If a debt collector is to belong to a scheme, it will be one of four officials: the Banking Ombudsman Scheme, the Insurance & Financial Services Ombudsman (IFSO), the Financial Services Complaints Ltd (FSCL) or the Financial Dispute Resolution Service (FDR) .

Contact details for dispute resolution mechanisms

Banking mediation program

0800 805 950 – [email protected] – www.bankomb.org.nz

Insurance and Financial Services Ombudsman (IFSO)

0800 888 202 – [email protected] – www.ifso.nz

Financial Services Claims Ltd (FSCL)

0800 347 257 – [email protected] – www.fscl.org.nz

Financial Dispute Resolution Service (FDR)

0508 337 337 – [email protected] – www.fdrs.org.nz

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