Just what is debt parking? According to the FTC, debt parking is “the practice of placing alleged debts on consumers' credit reports without first attempting to communicate with the consumer about the debt. Some call it “passive debt collection,” but there's nothing passive about the injury it can inflict. Consumers often don't learn about it until a mortgage company, prospective employer, or other decision maker pulls their credit report and spots what appears to be an unpaid debt. With a house, car, or job in the balance, many people feel pressured to pay up – even though they may not actually owe the money.”

An update to the Consumer Finance Protection Bureau's Fair Debt Collection Practices Act, titled Regulation Fand released on November 29, 2021, makes clear that this behavior will no longer be tolerated. Under the new policy, a debt collector must contact the consumer before furnishing the information to the credit reporting agency either by speaking directly to the consumer or by contacting the consumer via mail or email in the form of a validation notice.

This validation notice must contain enough information to reasonably identify the debt as well as notify you of your rights as a consumer and your options for responding to or disputing the debt.

Once the collector has attempted to contact the consumer, they must wait a reasonable amount of time before reporting the account to ensure the consumer has sufficient time to dispute the information. The regulation states 14 days as the amount of time collectors must hold off on reporting alleged debt. They are also responsible to reattempt communication if they do not reach the consumer directly or if the mail is undeliverable.

If you believe there is an invalid debt sitting on your credit report that you were never made aware of, you may be able to bring a claim under the Fair Debt Collection Practices Act (“FDCPA”).