If you ever get a call or letter from a debt collector that you know is a case of mistaken identity, don't ignore it!

I read a Bloomberg report about new abuses in the debt collection industry. In one instance, a collector found a woman who had a similar name to an alleged debtor. So the collection agency simply altered the Social Security number in their files to coincide with this woman's name!

Then they went to court and got a collection against her -- the wrong individual!! Thankfully, she sued and won a judgment against the collector.

In another case, a California senator had a collector try to garnish his wages because his name was similar to that of an alleged debtor.

These are not necessarily isolated incidents. The collection industry has reached a new low. It is a tough business. I know from the inside because I worked as a bill collector during graduate school. But done right, you can collect money legitimately. Unfortunately, too many collectors take shortcuts and flout the law.

That trend has led to a two-year-old law in North Carolina that has the industry hiring lobbyists and spending money to try to overturn it.

North Carolina requires that if a collector goes to court to try to collect on a debt, they must have proof that you owe the debt. That does not sound like a burden to me. Can you believe industry is fighting this?!

If you receive notice from a collector about a court date and it's a case of mistaken identity, go and defend yourself. If you do not, there will be a default judgment entered against you. Then in the eyes of the law, you owe a debt that was not yours to begin with. A collector can even garnish your wages or empty your bank account once they get that judgment.

Do not ignore it. You have to go fight for your rights.