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Beware the Zombie Debt Apocalypse

One of the things that may be going on with all the NCTUE letters people in Colorado have been receiving in recent days (see my last two entries) is a debt collection agency fishing for “zombie debt.”

There’s a great deal about this online. It turns on a peculiarity in the law regarding debt and the statute of limitations: If a debt collector can persuade a debtor with an expired debt to pay even a penny of that debt (lying through their teeth that doing so will remove the negative event on their credit report) the statute of limitations can be reset, and the debtor may then be liable for the full amount of the expired debt.

The debt is basically brought back to life to haunt the debtor.

This is the sort of thing that may technically be legal but strikes most people as a species of fraud. Doesn’t matter: Whatever you do, never pay anything to a debt collector to settle an expired debt–or that debt’s teeth will soon be gnawing at your wallet. Brains, feh. All it wants is your money.

We don’t know yet what’s going on involving NCTUE letters in Colorado. But a zombie debt scam is possibly underway. It might working something like this:

  1. A shady debt collection agency buys (or simply invents) a bunch of old (or fictitious) debts.
  2. The agency files these debts with NCTUE.
  3. NCTUE dutifully sends out notices that they’ve received negative information for your account. (These are the letters that people have been getting.)
  4. At this point, the collection agency may begin calling or sending letters to the people named on its expired (or fictitious) debts. They may also simply wait for concerned consumers to contact them. (Don’t! Especially by phone.) They may offer to settle a debt and remove the negative credit entry for a small sum.
  5. A few people may consent to do this. As soon as the collection agency receives the settlement payment, they begin dunning the hapless submitter for the full amount of the expired (or fictitious) debt. That’s the payoff. Note that the collection agency probably bought the debt, and owns it. Whatever money they can get out of those named in the debt goes to them and belongs to them. The original owners of the debt are no longer involved and have no stake in the debt payments.
  6. In the case of truly fictitious debts, the supposed debtor isn’t on the hook for anything–but any money sent to the collection agency is probably gone forever.

This has been done many times before. Note that the scenario is still hypothetical in this case. I’m in the process of checking to see who filed an entry under my name with NCTUE. I’m also waiting for some contact by a debt collection agency. I always screen phone calls, but I’ll be doing so a lot more consistently now. What I do later on depends completely on what I learn in the next few days. Stay tuned.


  1. Bill Helton says:

    I received the same letter last week(I live in Colorado). I contacted through the phone number on the main site not the one given in the letter. They stated they were unable to find any debt and would send out my report. Here’s hoping I didn’t just get scammed by NCTUE.

    1. Bill Helton says:

      A couple things. One I filed a complaint with the CO attorney General who recommended I contact the GA Attorney General or GA BBB.

      I received my free report and it shows two utilities accounts that I have had with no negative information, but it does off to sell me my exchange risk score for $7.95.

  2. Brian says:

    Thank you for continuing to follow up on this. I have no outstanding debt, so this would lend credence to the theory that this may be fictitious debt.

    In an effort to narrow down the source of the problem, the legitimate information the NCTUE would have on me would be:

    1) TV / Internet through Comcast Cable
    2) Cell phone though AT&T
    3) long expired Cell phone plan though T-mobile

    Have you come across away to retaliate against a company that has generated fictitious dept? It seems like the attempted victims should be due some punitive damages.

  3. Steve says:

    Thank you so much for the information and follow through. Perhaps you should contact a local news agency with your findings and get the message out. This should definitely be exposed and further investigated.

  4. Tricia says:

    Thanks, I too received this letter and like the others have not missed a bill. Thanks for doing the research for us! I am in CO as well.

  5. M says:

    We too have received this same exact letter and also have never had a late bill. I did a credit check on Equifax and our credit report has no negative information. We have been Verizon customers for about 9 years…but are always paid in full. I guess we will just see what happens…we too live in Colorado!

  6. TJ says:

    Is this thing for real? I live in Colorado and just got a letter, too. I found it suspect that the letter is on blank white paper with no letterhead. I was somewhat comforted to find the NCTUE website, but alarmed that the contact phone number is different on the website than on the letter I received. Of course, they cannot send you anything without giving them your SSN. I have never had outstanding debts. Is this a scam?

  7. DR says:

    Thanks for this information. I received a letter recently at my legal address in CO. It stated that “in the past twelve months, we have received at least one report that added negative information to your data report.” Impossible I say. For the last 3 years I haven’t lived in the U.S. I do not have utility or TV service contracts. I do have a Verizon cell phone, so just to be sure, I called them to ask if they have ever recorded a late payment from me in the history of being a customer with them…their answer was never.

    So, in my case, it has to be nothing other than your theory of fictitious debt reported to NCTUE. The plot thickens. Looking forward to finding out what you come up with. I will continue my investigations as well.

    1. Please let us know if you turn anything up. I was dealing with movers all day and couldn’t do any sleuthing, since my main system was pulled apart. A couple of people have now said that everybody in Colorado (!!!) got one of these letters. That may be good news, but it’s also something those jerks should not be allowed to do.

      No wonder their Web site was overloaded. Sheesh.

  8. Paulette Cogshell says:

    Thanks, I too received this letter and like the others have not missed a bill. I had called the automated number and I had made a mistake and enter my SS# and mailing address. I don’t know what I was thinking. I would always research online to make sure it’s legitimate and not a scam. I’ll never do that again. I’ll not be sending any information by mail. Yes, it sound like a scam.

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