Hi all, I need some help.........'one of my CA's (yes they have a licence) validated with original contract, accounting statement -although the balance says zero on it, they claim once it was sent to collection, the OC coded it as a status 60 which means a write off with balance and that shows a zero balance on the OC's computer and that's an accepted practice and completely legal- is this true? If so, they go on to say that they never indicated to me that they themselves owned the debt and that they were collecting on the OC's behalf- I guess that means it's assigned. My questions: 1. if it's assigned, can they report it on my file? 2. if they can report, do i just fess up and pay it? 3. do i threaten with FDCPA/FCRA violations?- FDCPA - never contacted me before i sent them 30 day, hence never informed me of my rights to dispute. when i sent validation that was the initial communication between me and CA and they never gave mini-miranda nor the five items outlined in section §809(a). FCRA - never listed the account as disputed but instead validated in my investigation with the CRA. (maybe in their mind it was validated, who decides that btw?) Sorry for all the questions but I'm completely shocked that they had all this stuff. Any help would be greatly appreciated.
Thanks Butch! I probably should have been a little clearer on my post, I apologize. This was my second letter to them an in it, I said they had just proved my point that I had a zero balance. In their second reply to me I got the BS about status 60 blahbalh. However, the accounting statement sent to me is 1 summary page where the total charges and total payments match and total balance states zero. They also sent a 4 page detailed printout of all account activity showing description, charges, dates, payments, balance after payment. On the last page of that it says: Description: trnsfo to colle Charges: 0 Payments: 2177 I guess my question is, is it normal practices for an OC while transferring an account to collections to list the outstanding balance under payments? Ok, this doesn't make sense and I can't explain it. Can we scan documents on here? One almost have to see this crap to, hard to explain. Or, do we have an accountant in the house who can tell me about the "status 60 means write off with balance showing a zero balance"? The thing is, the outstanding balance is listed under payments so if one looks at it, it looks as though I made that payment. Also, the last payment I had made was on 5/25/99 and the Trnsfr to colle date is 5/25/99. So according to them, I had made a payment and 5 days laster they transferred it to collections? Also, it says on my credit report that it was assigned:3/99. But according to their statement, I had made payments of $1600 in 3/99 I made payments of $1600. WTF!!!! Feel free to tell me I'm confusing the hell out of you..
Hi Sarah, I think that once an OC writes a debt off they must show a zero balance, although I have no idea what a "status 60" is. They would do so to remove the account from the "accounts recievable" column without actually deleting the account. Once a co. writes a debt off, which means they claim a tax deduction, they no longer anticipate recieving any money so they zero out the balance. Meaning the OC doesn't expect a recievable. Now the CA does, so you'd still owe the debt. I think this is a "Generally Accepted Accounting Principle". We'll see what Mitch says.
That does ring an uncomfortably familiar bell from Accounting classes It is a valid debt, I'm just trying to weasel myself out of it. Although they have the balance wrong, I have a copy of a cashed check from the OC that's not listed on the statement. Would your advice be to go for violations or send a copy of the check and try to settle?
Sorry Sarah, I figured I'd tell you what you needed to know, not what you wanted to hear. Keep racking up violations. In fact, bait them for violations. You're good enough to "elicit" violations from a CA. LOL Not that hard. Once you have enough potential violation on them to overrun the debt, tell them if they don't settle for $20 you'll sue. Don't forget, they will only get to keep about 40% of what they collect so you're probably already there. If I were this CA, I'd want to strike a deal with Sarah rather than lose my shirt. Suing a CA for FDCPA and FCRA violations has NOTHING TO DO WITH THE UNDERLYING DEBT. The printout you got IS NO GOOD because there are payments missing. Let me think about it some more.
Appreciate the honesty I'm not here to have my ego stroked but rather learn how to master them little leeches into shivering puppets. Since I've done 30/15 day validation I'm not sure what my next communication should contain. How would one bait them into more at this point? The debt is really only 2100 and my un-reported check 1000 so that'd be one violation, although I'd prefer to have a slew of them. On that note btw, I've been trying to study (I'm a newbie) and I'm still in a stage of confusion as to the $1000 question (per violation or action) Is there a final verdict on that? Thanks for your help! Eagerly awaiting your expert advice Put on your thinking cap
Butch is correct on this one. The company must write the debt off their books in accordance with GAAP, since they have determined that the debt is uncollectable. They can not continue to recognize the asset on their B/S since it is no longer a viable asset. The "status 60" is more than likely an internal systems code indicating write-off to bad debts expense. Do not confuse this with your legal requirement to repay the debt. As long as you had a valid contract in the making of the debt, the company may still continue collection efforts.
Little more info... When you initially entered into the transaction. The company recognized the sale and thus increased their net income which they paid taxes on, usually around 40-50% for corporations. When they determined the debt was uncollectable they wrote it off to bad debts which has the effect of reducing net income, and thus they no longer had the burden of paying the taxes on the original sale. In other words they got their taxes back on the sale previosly recognized under accrual accounting. This is the theory behind the transactions. When you think about it it makes sense, why should the company have to pay taxes on revenue generated from a sales transaction that was never completed. In practice corporations use an estimate for bad debt expenses and an allowance account. Companies do not make money by writting accounts off. They make money by completing sales.
Well, I was speaking in generality, there are always exceptions to the rule - maybe a tax shelter idea...
Thanks Mitch, Unfortunately that's what I thought. Since this is Sarah's thread tho, I wonder what she could do now in light of this info. Ya know what I'm thinking? I might just go ahead and file suit for the violations and then agree to drop it when they remove the account and drop collection efforts. Make them settle for what she has already paid, ($1,000+). Whatcha think?
Sounds like if you made a payment not showing on the accounting statement provided, then you have a valid dispute. Since the CA did not notify the CRA that account was "disputed by consumer" then that is a violation of FCRA. Further, if they attempt collection efforts on the amount in dispute then that is another violation. I would continue disputing the payment you made that is not reflected. You shouldn't have to make that payment again. Send them a copy of the check or other proof you made the missing payment. It seems to me that this is a relatively minor violation, and may not result in much even if it were taken all the way to court. I have read that TU does not even has the capability to place "disputed by consumer" next to the trade line. The judge might say that it looks like the CA made every effort to comply with the law by providing validation etc... Why don't you take a moment to list out all the violations you think they have committed so the credit experts can advise you on whether or not they are valid violations, and how successful you might be in court. You also might consider settling and making payment arrangments in exchange for full deletion. If they won't delete, I see no incentive to pay the acount, since it will hurt you either way. That is the flaw in the system.
Sorry for all the questions but I'm completely shocked that they had all this stuff. Any help would be greatly appreciated. SarahO | ================ ******************** looks like you may have them on a few violations. They may owe you more than you owe them. How much are they trying to collect.??
