WASHINGTON – Michael L. Hughes started getting the harassing phone calls several months ago. He figured they were from scammers and he tried to ignore them.

Sometimes he’d pick up the phone just to hang up on them. Finally, he decided to find out what they wanted. The caller said Hughes was $12,000 in debt.

He checked his credit report and realized what had happened: The debt collectors had the wrong person. His credit report showed a $12,000 debt – for Michael B. Hughes. They even worked at the same company. And now one’s money troubles were dragging down the other’s credit.

“They don’t give a flip,” said Michael L. Hughes, of Danville, Va. “They’re not paying people to sit in an office and correct people’s mistakes. They’re in there to collect money.”

Credit experts liken the incident to a financially dangerous game of tag that has become increasingly common as consumer-default rates hit record highs.

Debt tagging prompted a Federal Trade Commission investigation of Credit Bureau Collection Services, or CBCS. The company agreed to pay more than $1 million to settle charges that it violated federal law by inaccurately reporting credit information and by pressing consumers to pay debts they often did not owe.

Hard times for consumers have meant boom times for debt collectors. And some can get their hooks into people who have never missed a debt payment.

In the uncertain economy, people are especially sensitive to anything that can hurt their credit rating. The FTC said it recognizes that third-party collectors contact millions of people each year, and it receives more complaints about the debt-collection industry than about any other.

In its 2010 annual report on the Fair Debt Collection Practices Act, the FTC said it received 119,364 complaints about third-party and in-house debt collectors in 2009, up from 104,766 the previous year.

But people who receive mistaken calls from debt collectors don’t always contact regulators. In Hughes’ case, he contacted fraud resolution specialist Identity Theft 911 to help repair the damage to his credit report. He said he hasn’t heard from collectors since.

Complaints

Mark Schiffman, spokesman for the Minneapolis credit and collection trade group ACA International, said his agency has always worked with the FTC to get more clarity on its complaint data, but that it hasn’t happened yet.

“There are complaints, but we take them seriously and are resolving them to the satisfaction of our consumers,” he said.

Valerie Hayes, general counsel for ACA, said debt collectors can err when the debtor has a different phone number from the one first used. Sometimes telephone companies assign debtors’ phone numbers to someone else. Or someone who moves into the home of a debtor might receive the person’s bills or other communications.

Those seemingly random connections can pay off for collectors. Some will pursue a person who might cave under pressure.

Mark Fullbright, fraud specialist at Identity Theft 911, said CBCS called one of his clients, Molly Harrington, and managed to get her to divulge her Social Security number. Then Harrington, 75, got a bill for $4,197 from an electric company for power at a home in Putnam, Conn.

But she was from Chepachet, R.I., and had never lived in Connecticut; someone reported the debt under her name in her credit history early this year.

Fullbright ended up making the phone calls to remove the debt from her file. When he challenged CBCS for proof that Harrington owed the money, he said, the collection agency didn’t tell him much until he threatened to report them.

If consumers see inaccuracies in their credit files, they can dispute them, as Hughes did. The credit reporting agency will then go to the source to verify, according to Susan Henson, a spokeswoman for Experian, one of the major reporting agencies.

“The onus is on the original creditor to provide the proof,” she said. The process takes at most 30 days and then Experian sends the corrected report back to the consumer.