When debt collector seeks payment, who has burden of proof?

Don't expect to end the collection effort by simply denying that a debt is owed. State and federal officials are increasingly focusing on such issues.

The business world is fond of presenting consumers with Catch-22s. Richard Leza received a real beauty from a debt collector.

"They basically told me I had to prove something that doesn't even exist," he said.

Here's the crux of the problem: Is it the debt collector's responsibility to prove that money is owed, or the consumer's responsibility to prove that it isn't?

State and federal officials are increasingly focusing on such issues as debt collectors turn up the heat after the prolonged economic downturn.

California Atty. Gen. Kamala D. Harris has made overzealous and fraudulent debt collection a priority for her office, as has the Consumer Financial Protection Bureau in Washington.

Leza, 45, lives in Orange County's upscale Dove Canyon neighborhood in Rancho Santa Margarita. He works as chief financial officer for a division of a major title insurance company.

He is not the sort of guy who skips payments.

Yet Leza was contacted by a debt collector called Enhanced Recovery Co. last summer with news that he owed $374.40 to the phone company Verizon.

Leza didn't think he owed any money. "I've never been late for anything," he said. "I'm pristine."

And that's what Leza told the debt collector. "They never bothered me again," he said.

In December, though, a different debt collector, Midland Credit Management, or MCM, reached out and touched Leza for the same $374.40. Apparently, the first collector had sold the purported debt to another firm.

"I told them what happened the last time I was contacted about this," Leza said, hoping the second collector would similarly make itself scarce. "But I also said that if they could show me a valid invoice, I'd pay it."

MCM responded that Verizon had all the necessary documentation. But when Leza contacted Verizon, a service rep said any documentation would be in the hands of the debt collector.

A fine how-do-you-do.

Leza pressed his point with reps for both Verizon Wireless and Verizon Communications, his land-line company. Surely, he said, their computers would show if he owed any money after about a dozen years as a customer.

"They finally said they had no record that I owed them any money," Leza said.

Neither Verizon Wireless nor Verizon Communications would discuss Leza's accounts with me.

The next time MCM called, Leza related what he'd learned from Verizon but reiterated that he'd be happy to pay if the debt collector could provide evidence of money owed.

"That's when the guy at the collection company said that they didn't have to prove that I owe anything," Leza recalled. "He said it's my responsibility to show that I don't owe it."

I shared this with Chris Koegel, assistant director of the Federal Trade Commission's division of financial practices.

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