Legal Question in Credit and Debt Law in California

You may be able to sue the, but it is very likely not insurance fraud. This is simply a collection agency out of control. Under the Fair Debt Collection Practices Act and the Rosenthal Fair Debt Collection Practices Act, debt collectors are limited in what they can do. First and foremost, if you dispute the debt in writing, they must respond by providing proof of the debt. Upon receipt of proof of the debt, you provide them with proof that it has been paid - in the form of your payment and the insurance companies payment. If they continue to hound you, so them for violating the FDCPA. Additionally, under the Fair Credit Reporting Act, you can sue them for additional damages for improperly reporting this on your credit report. You must first dispute the item reported on your credit report with each of the three major credit bureaus. As with the FDCPA procedure, upon receipt of their response, you provide proof that it was paid. If they do not remove the item, then you sue them for violating the FCRA. Both of these types of actions are pretty technical, so you may wish to contact an attorney. You may also try to sue them in Small Claims Court if the damages are under $10,000, but the Small Claims Court can only award monetary damages - they cannot order the collection agency to restore your credit and/or cease contacting you regarding the debt.

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If the collection agency violated the FDCPA, which they very often do, and you sue, your attorney will be awarded attorney fees by the court, and you will be able to collect your actual damages with a minimum award of $1000 per violation. I would be pleased to hear from you. In addition, you should write a FCRA validation letter (search the internet for an example) and send it to them certified mail return receipt requested. See also creditboards.com. Watch out for legal time limits.