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There’s a virtual “NO PARKING” sign planted smack in the middle of your credit report. It means that debt collectors can’t report your debt — or your supposed debt — to credit reporting agencies without first trying to check with you.

That’s a key takeaway from the FTC’s case against Midwest Recovery Systems, LLC. The FTC says Midwest used “debt parking” to collect fake or questionable debts. Debt parking is an illegal practice where collectors post debts to people’s credit reports without first trying to contact them. Many people don’t learn about the debts until they apply for loans, jobs, or housing, and someone pulls their credit report. Some people pay the debts to clear their credit even if they don’t owe them. Others never discover the debts but lose job offers or other opportunities because of the information.

The FTC says Midwest parked more than $98 million in fake or unverified debts on credit reports, including certain medical debts and debts for fake or unauthorized payday loans, sometimes called phantom debts. The FTC says Midwest continued collecting the supposed debts even after finding that 80% to 97% of the debts that people disputed each month were inaccurate or invalid.

Under a settlement, Midwest and its owners must stop all unlawful collection practices, ask credit agencies to delete any debts they previously reported, and take other steps to assure they only report and collect valid debts.

How can you protect yourself against debt parking? Check your credit reports regularly. Equifax, Experian, and TransUnion each must give you a free copy of your credit report every 12 months. And, all three are offering free weekly online reports during the COVID-19 pandemic. Dispute any errors or inaccurate information you find.

If you plan to apply for a job or financing, check your credit reports at all three agencies before you apply, even if you have to pay for a report. That will let you clear inaccurate information from your report before it causes problems.

If you’re dealing with debt collectors, know your legal rights. And, if you spot deceptive or abusive collection practices, let us know at

Check Your Credit Report video link

Note: This blog post was updated on March 4, 2021 to reflect the extension of weekly free credit reports.


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Katherine NM
November 30, 2020
Thank you so much for letting us know this. I would never have discovered TWO such parks on mine.
November 30, 2020
Utility companies and celular providers often do this sort of thing.
November 30, 2020
Why aren't the owners of Midwest in prison for messing up people's lives, causing job loss, and adding to the problems Americans are facing during this pandemic? What "settlement" Paying a fine? Criminal behavior deserves a prison sentence, especially now in the worst of times.
Curious george
November 30, 2020
You state that credit agencies can issue free credit reports. What about freezing your credit? What are the pros and cons?
December 01, 2020

In reply to by Curious george

Criminal prosecution was the first thing that popped into my mind as I read this. I would like the FTC to respond to that. For all intents and purposes that was theft if they posted fake debts and then collected on them.
November 30, 2020
Thank you for the important job you do, and making sure we are aware and informed of these most important facts of information. I share it with family and friends all the time! Again, thank you for making a great difference to us(the uninformed)and I am so glad to be a subscriber!
November 30, 2020
Very informative,thanks
November 30, 2020
as much as I tried. I could not get all three reports. Think it is Experian that would not respond on computer or on the written form for the 3 credit reports.
Ulimatu Kamara
November 30, 2020
Thank you for letting us know this things, I’ve always wondered why do they have the right to just post things on our credit files and the credit bureaus just let them.
November 30, 2020
I tried to dispute something on my Experian report and couldn’t even file the report. They told me to file online but it wouldn’t accept the report, it kept telling me it needed a valid phone number, which I HAD put in the requested report. So what do we do in that case?
December 01, 2020
I found out when researching for a "Home Buyer's Loan". I was told there's several charged off, but this enabled me to be approved for a loan. But there are fraudulent collections, still trying to get me to pay them.
December 01, 2020
Iv been trying dinner July 2020 to dispute a charge off on my credit report and can’t seem to get any help understanding what everyone is doing. Sure not helping and old lady anyway to understand what is going on!