Bear with me..I'll try to summarize my situation. In Nov 06, I sold an item for $3000 on ebay. It was delivered with a signature. Nearly three years later, I get a notice from PayPal saying they received a charge-back from the buyer. After multiple calls, emails and faxes (and to make a loooong story short), the chargeback ended up going through. PayPal admitted to me several times that I was getting screwed, but couldn't do anything about the CC companies' decision. I fought and fought and fought...and lost. This was literally months before PayPal changed their policy that would have protected me in this situation. Simply put, it was extortion. I would love to have a face-to-face with the buyer, but she disappeared. Anyway, I flat out told PayPal I wasn't paying. Time and time again they apologized for the situation, but said it still may go to collections. It did. First it went to NCO. They called me for about a month straight and I never answered because I was so upset. They eventually stopped calling and it didn't show on my credit report. Now, two MORE years later, I just started getting calls from RE Solutions. Apparently they are another collections agency. I am tempted to not answer any of their calls either, but am very worried about my credit. I have a 780 credit score with no blemishes. So here are my questions: 1. Why didn't NCO report it to the credit agencies the first time? 2. Will RE Solutions not report it either if I don't respond? 3. If they do report it, what will happen to my credit score? 4. Any advice on how to handle this?
1: I don't know why NCO didn't report the alleged debt. Maybe because they did not feel that they had enough information (such as DOB and SSN) in order to satisfy credit reporting guidelines. Maybe because they didn't wish to spend the money to report to the credit bureaus. 2: That is not a logical connection. If you have taken the time to read a collection agency dunning letter, you will see that if you do not dispute the validity of the debt (in writing) during the first 30 days, then they can presume the debt is valid and continue their collection activity. One of the tactics which collection agencies perform in order to coerce people into paying (at least people who care about their credit rating) is to put a negative tradeline on the person's credit reports for the alleged debt. 3: If they do report this so-called "debt" then obviously your credit score will go down. How much so is difficult to say. If this is the only negative account on your credit report, then I suppose you could file a dispute letter with the collection agency, and they are supposed to in turn add a comment to their tradeline on your credit reports that says "Comment: Consumer disputes this debt information". Also, you are legally permitted to file a consumer statement with the credit bureaus that will be added to your credit report. If this is the only negative, you could add a brief explanation saying that the alleged "debt" was not a loan or a bill for services rendered to you, but rather an attempt by Paypal to bill you for losses resulting from a fraudulent chargeback filed by an unknown third party that purchased merchandise from you on Ebay. 4: Unless you are planning to buy a house in the near future, I would simply ignore the debt, but make sure to dispute timely with each collection agency that contacts you. Since there is no promissory note, no evidence that the "debt" is for goods or services purchased by you, etc, there is almost no chance that anyone would be dumb enough to sue for this debt. In the unlikely event of a lawsuit, you would simply go to court and assert those defenses. Also, the debt is required by law to "fall off" your credit reports exactly 7 years from the date of first delinquency, i.e. the date when this money was "due" from you but never paid. Since I disagree with the so-called "debt" out of principle, I wouldn't pay a dime, just to satisfy this "credit report extortion". Of course if you are trying to close on a house, then the mortgage lender will not allow you to have any open collections on your credit report, so then your hands are tied. Myself, I'd just stay in a rental for the next 2 years until this B.S. comes off the report on its own. Besides, owning a house is not necessarily a good investment in this economy.
Welcome to Creditnet! I'm sorry to hear about your situation with PayPal and this buyer. It sounds like you really got the short end of the stick on this one. Here are my thoughts: 1.) I don't know, and frankly I'm surprised they didn't report it. You got lucky. 2.) I think there's a good chance they will. Whether you respond or not probably won't have an effect either way. 3.) With a 780 FICO score, you can count on it dropping dramatically due to a collection. It's tough to say exactly how much, but your scores may even drop 100 points 4.) DV the new CA to start the process and protect your rights under the FDCPA
First of all, thank you so much for the responses. They are extremely helpful. I just have a couple more questions if you don't mind. 1. At this point, is there any reason for me to speak with RE Solutions or have them validate the debt? It doesn't sound like it will have any bearing on whether or not they report this to the credit bureaus. If not, I'll just continue to ignore them and not pay. 2. Is there a statute of limitations for something like this so I don't have to worry about legal action? 3. Bcohen2010, you're saying that this will be struck from my credit report 7 years after the date of the chargeback? The chargeback was sometime in early 2009. The date of the sale on eBay was Nov 06. Which date will they go by? Also, I already own a home (well, at least paying a mortgage) and we don't plan on moving anytime soon. And this would be the only bad account on my report. The thing that makes this even crappier is that she initially filed a claim through paypal a couple of months after the sale and lost the case. Yet the credit card company decides in her favor. Such b.s.
1: No, there is not any reason to speak to the collection agency over the phone. You're not going to pay this, and telling them that fact over the phone will not stop them from calling. In fact, if you answer the phone even once and acknowledge that you are the person they are looking for, then most collection agencies will bombard your phone with calls--especially robo-dialed calls--since they know that this is a valid phone # for you! 2: In most states, the SOL is 3 years, but in some states it is as long as 6 years. The SOL begins with the date of first delinquency. You will need to research the laws in your state. However, given the nature of this alleged debt, I am not sure that you are legally liable for it anyways. I also very seriously doubt that anyone would even attempt legal action to collect a debt where there is no promissory note, no concrete evidence of goods or services purchased/received by you, and no evidence that you have ever made any payments on the account, or otherwise acknowledged that the debt is valid. In fact, the only basis that Paypal has for claiming that this money is owed is some clause buried deep in the so-called User Agreement (which most people never read) saying that you agree to reimburse them for any losses due to payments being reversed. I am not sure that a court would find that legally binding, as long as you show up and contest the debt. 3: This alleged debt is legally required to come off your credit report 7 days from the due date on the first invoice which Paypal sent to you asking that you reimburse them for this loss, not the date of the Ebay sale or chargeback. So, if for example they sent you an invoice in August of 2009 saying that payment in full was expected by September 30 2009, then when that date came and went and you didn't pay, that would be the date of first delinquency. Therefore, the negative notation should come off your credit report 7 years from that date.
Once again, thank you very much for your advice. If anyone else out there has additional advice, I'd welcome it. Thanks!
I'm sorry to hear what had happened. This is something that's hard to think why. Was there by chance that you have the address of the buyer or either phone number? this is something that has to be settled. The longer the battle the faster it fades. However, don't attempt paying it.
