CA goes from $217.09 to $25.00!

Thanks to everyone that contributes to this board.

I have already had a bit of success with one of the CAs I'm dealing with.

Until about month ago I had no idea that this type of credit repair was even possible. That was when I fell into this vast pool of knowledge that is Creditnet and itâ??s members. I've decided to post the correspondence between this CA and myself. I hope someone will be able to take something away from this as I have been able to with so many other peopleâ??s posts. Itâ??s long but itâ??s worth it.

So this CA reported on my credit report that I owed them $217.09.

I sent them a slightly modified validation letter with the Wollman letter attached via CRRR. I'm going to use â??OCâ? and â??CAâ? for the two names since this matter isn't completely resolved yet. Everything else is written exactly as I received it or sent it. Also, the OC was a fitness club.

This was the CAâ??s nicely typed (I didnâ??t know typewriters were still used until now) response to my validation request:

---------------------------------------------

PRIN $ 180.00
INT/MISCL $ 37.09
TOTAL $ 217.09

RE: OC VS MYSELF ACCOUNT#

SUBJ: REQUESTED INFORMATION

We respond to your request for information concerning the account in our office.

We are handling an account on behalf of OC.
The account was assigned for collections back in 07-18-02.

This billing goes back to 05-18-02. The original name on the billing was Myself.

Please advise what payment arrangements you require. Once this account has been paid, we will be able to clear any credit filing that may have been placed.

COPY OF SIGNED CONTRACT AND ITEMIZATION ENCLOSED.

K. BROWN/EXT 208

---------------------------------------------

The CA did also send a copy of the original contract with my signature and an old â??02 printout of the account. I know this doesnâ??t really constituted proper validation and I was going to press the point, but after I took a very close look at the information they did send I changed my tune. My response to their letter might be a little hard at parts to fallow being that you donâ??t have a copy of the contract or printout, but I donâ??t think it will matter much. This was my response:

---------------------------------------------

July 28, 2004

Re: Account # ######/OC

4 Pages Included

K. Browne:

Thank you for your quick response. I have thoroughly reviewed the contract and statement that you submitted. The outcome of my review is as follows.

The alleged dept of $217.09 is very inaccurate.

Letâ??s start with the â??INT/MISCLâ? $37.09 charge. This charge is not from OC, as the statement plainly shows the final balance on the account was $180.00. The $37.09 is clearly being charged by CA, why exactly and under what authority is not as clear. â??INT/MISCLâ? I would take as meaning interest and miscellaneous charges. Nowhere in the contract does it say anything about interest or miscellaneous charges. The only reference to additional charges in the contract are in the last sentence of Paragraph 11, â??The Member will be liable for payment of all costs incurred by the Club in the collection of past due obligations to the Club, including court costs and reasonable attorneyâ??s fees.â? However, none of these types of charges were made, as they are not on the statement.

Ignoring part of my request for validiation, CA did not supply any documents showing a contractual right with the â??Clubâ? to collect on this account. Even if they had, nowhere in the contract does it state anything about my agreement to a third party debt collection agency. Also, Paragraph 1 of the contract states that, â??This agreement represents the complete understanding between the Member and the Club. No representations, written or oral, other then those contained within this agreement are authorized by or binding upon the Club.â? CA has no legal authority to collect on this account, let alone charge additional fees on it. The charge of $37.09 is erroneous at best, fraudulent at worst.

Letâ??s then move our attention to the â??PRINâ? $180.00 charge. I will first address the five (5) â??LATEâ? fees for $10.00 each that were made on 3/21/02, 4/11/02, 5/11/02, 6/12/02, and 7/11/2002. Nowhere in the contract does it state anything about late fees for late payments. The contract does not set a late fee amount nor does it set a timeframe to which a payment would be considered â??lateâ?. Again, the only reference to additional charges or fees in the contract are in the last sentence of Paragraph 11, â??The Member will be liable for payment of all costs incurred by the Club in the collection of past due obligations to the Club, including court costs and reasonable attorneyâ??s fees.â? A late fee is not a cost incurred by the Club by way of the payment being late. It is a completely separate additional charge. These late fees were not specified nor were they agreed to in any way by either party. The five (5) late fees for a total of $50.00 are erroneous at best, fraudulent at worst.

Now letâ??s take a final look at the remaining â??PRINâ? balance of $130.00. This also turns out to be invalid. Notice I signed the contract twice. The first signature was on April 16, 2001. I was 17 at the time, as my birth date on the contract shows. Then on September 7, 2001, when I turned 18, I resigned the contract. The two differently dated signatures are very visible on the photocopied contract that CA provided and Iâ??m sure they are even more distinguishable on the original.

California Civil Code Section 1556. All persons are capable of contracting, except minors, persons of unsound mind, and persons deprived of civil rights.
California Family Code Section 6500. A minor is an individual who is under 18 years of age. The period of minority is calculated from the first minute of the day on which the individual is born to the same minute of the corresponding day completing the period of minority.
California Family Code Section 6710. Except as otherwise provided by statute, a contract of a minor may be disaffirmed by the minor before majority or within a reasonable time afterwards or, in case of the minor's death within that period, by the minor's heirs or personal representative.

OC entered into an illegal contract with a minor. The contract only became valid after I signed it when I was 18. That means from April 16, 2001 to September 3, 2001 I was being billed illegally for a total of $187.50. Then, from October 1, 2001 to February 1, 2002 I fulfilled the five (5) consecutive monthly payments of $25.00 as the terms of the contract state. However, the $75.00 deposit that consist of an initiation fee of $25.00, $25.00 for the first month of September 2001, and $25.00 for the last month of February 2002, was never paid. That would mean that at the end of February 2002, I owed OC $75.00. From March 2002 to June 2002, four (4) payments were due at $25.00 each and then in July 2002, one (1) payment was due for $30.00, for a total of $130.00 for the months of March 2002 to July 2002. With the initial fee of $75.00 that I owed plus the $130.00, I owed a total of $205.00.

In the end it turns out that I owed $205.00 to OC, but OC owed me $187.50 plus $25.00. The $187.50 is for funds that were charged under an illegal contract plus $25.00 for February 2002 that had already been paid by credit card. February 2002 should have been paid by the $75.00 initial deposit from September 2001. In the end, OC owed me $212.50 and I owed them $205.00. So let me restate that.

OC owes me $7.50.

I have included a spread sheet with all the numbers to illustrate what I have just written.

I have also included copies of the California Code that are relevant.

I realize this is all just one big mistake. As of now, I have no want to pursue the $7.50. I will consider this matter completely closed with a signed letter from CA stating that this account, # ###### has been completely resolved and that the credit filing with Experian and any other filing has been completely DELETED.

I look forward to another quick response.

Sincerely,
(signed)
Myself

---------------------------------------------

 

- Continued

Everything that was written in my response is 100% true and accurate. I did in fact sign the contract the first time when I was 17 and again when I turned 18. The contract does not contain any other statements in regard to the points that were brought up. The California Codes are all current. The billing timeline is hard to follow, without the supporting docs, but again is 100% accurate.

And this was the CAâ??s response to my $7.50 claim of being owed to me:

---------------------------------------------

After a through review of your account and the information that you submitted on July 28, 2004, CA has found that you have several valid points.

To complete your review package you will need to send us a copy of your drivers licenses to verify you age. We will then send the package to the OC for final review.

Or you can send us $25.00 and we will consider this matter settled.

Let us know your decision.

---------------------------------------------

I just received that last letter from the CA today. As happy has I am that they have clearly buckled, I canâ??t help but be rather insulted by the $25.00 offer for a settlement.

Is there any way that sending them a copy of my drivers licenses would cause a problem? I donâ??t really see one. So I will be going that route.

Again, thanks to all those dedicated people that put so much time in on this board. I know I am still a "newbie" when it comes to credit repair and I still need to learn a lot more and I will. However, I really hope this post does help someone. I guess the underlying theme to this post is even if an account is validated or partially validated, always keep a "Litigious Mindset" - doc, always read the very fine print and make sure every penny matches up!

The end for now.

Myself â?? Mattl51 - Matt

 

I don't think that I'll have a problem getting the deletion. I'm pretty sure the CA knows they are going to have delete it if I don't pay the $25. If I were to pay the $25, I think that would basically be an admission of liability and they wouldn't have to delete anything.

This account is a couple years old and the ownership of the club has changed hands at least once since the contract was made, so I donâ??t think the OC will be a problem. The CA is the only one that reported to the CRAs. I suppose the new owners of the OC could try to collect if they bought all the financial accounts from the previous owners. I just can't see them wanting to invest the time and money for a account that is clearly a lost cause for them, but I guess you can never really know.

Over the weekend I will be writing up a final letter to the CA seeking a signed letter from the owner of the CA that this account is completely resolved, a signed letter for the deletion, and the original contract. In return I will also consider this account completely resolved.

Any thoughts on what else I should ask for?

If they try to beat around the bush after this last letter, the CA will receive notices to appear.

Iâ??ll be sure to post the results.

Thanks again everyone.

 

ontrack -

I also considered that argument.

However, I came up with a couple reasons to press the minor issue.

The California Codes say a couple different things that could be applied to this.

1. You can't enter into a contract with anyone under 18.
2. If a contract is made. It can be disaffirmed by the minor before majority or within a reasonable time afterwards (usually 30 to 60 days).

If I had only signed the contract once when I was a minor, I don't think I could argue the contract as being invalid being that I didn't disaffirm it within a reasonable period. Since I did sign the contract a second time when I was 18, I could argue the fact that by signing the second time, I was indirectly disaffirming the contract up until that time. Again, I am not trying to say the entire contract is invalid, only the minor side of it.

But ontrack, like you said, I am also not a lawyer. I didn't find any codes on this situation so I suppose it would be up to the judge to decided if this was a valid argument if it came down to it. For the time being, the CA doesn't look like they are going to put up a fight.

Thanks for the input everyone!

 

Good call.