Hello everyone. I have a quick question. Are the "rules and regulations" for collection agencies the same for a business as they would be an individual? My office is receiving collection letters for a service we cancelled. They state they have a signed contract, we state we cancelled the service they just failed to properly close our acccount etc. etc. It is not past SOL yet. The letters I am receiving are stating they are planning to forward our case to litigation and the letters also fail to outline the whole "we are attempting to collect a debt....." song and dance. I obviously plan to send them a letter back but I just want some advice on which path I should take with this. Thank you for any input!
The FDCPA only covers consumer debts, so no, the same rules don't apply. You will have to look to your state's laws to see where you might get any (if there are any) protections.
What type of service? They may be regulated. Also, does the original provider of the service have a "habit" of similar failures to close terminated accounts?
It was an advertising service/journal in our area. I don't know if they have a habit of not terminating accounts or not but the whole thing was very fishy. We contacted our sales rep. to let him no we did not want to continue service and after getting the bill we contacted the company and they stated "your representative can not cancel your contract for you, you have to call us and do it" to which my response was "then why didn't he call us an let us know that?" they had no response. I'm not sure what I should do about this. I would imagine if they were going to try and sue us they would need to show proof of a signed contract regardless of FDCPA as they would be suing for breach of contract and said contract would need to exist. Should I respond going that route?
Is there in fact a signed contract? Did your contract allow for cancellation? Did it say what you should do to cancel? Was it very specific, or vague? If that sales rep signed you up, and you cancelled thru him, and he did not say you had to cancel directly, nor that he was no longer your sales rep, I would claim that since he was their agent, and represented himself as their agent when he signed you up as well as when he cancelled, that since you had notified their agent of cancellation, they were in fact notified. They are responsible for the representations of their agents. They should not profit from their internal communications or employee failures any more than they should profit by ignoring any customer's contractual right to cancel. File a complaint with BBB, so their other potential customers know what to expect. Include in your complaint that you cancelled thru their sales rep that signed you up, and that they were not honoring that cancellation. What type of advertising service/journal? What service did they provide, and was it worth what you were paying for it up until you cancelled? Did they do what they said they would? Are they purely local to your area, or do they operate in a broader region? Are there any representations that some money is going to a charity, for instance? How fishy was this?
I agree with ontrack. The sales rep has been presented as an agent of the company. There is an implied relationship there, and if the company doesn't notify you they may be legally bound by the implied agency.
Yes I do have a signed contract. It states that "all cancellations bust be in writing and sent by registered mail to the publisher at the address shown on this contract." They advertise many different new products/services etc. They are a national company however the advertisements go into regional directories. They are very expensive, and no they were not worth what we were paying. We never had a single inquiry from their service. They do not advertise any type charity/non-profit work or benefits. Based on what the contract says, we didn't cancel the policy in the proper format. It just still doesn't seem right that the sales representative wouldn't call us back and tell us "you didn't follow proper procedure" or something like that. He basically just disregarded our cancellation. You are right he is a representative of the company and should have followed up with us to notify us of how we should have handled the cancellation or even said "look at your contract for cancellation procedure". Here's another question. The amount on the contract states $1,850.00, plus they had a service charge of 1.5% per month. Which I would likely dispute the service charge because the bill itself was in question and there was no way I was handing over funds without clarfication. The CA is trying to collect $2,600, Plus $270 in Interest and another $600 or so in collection fees for a toal of over $3,000. That doesn't seem right. Or is it? Ontrack, you've got me thinking though. We signed our original contract in 2002, in July to be exact. The journal was not produced until December, 2002. In May, 2003 they wanted us to renew. This is when we signed the new contract. From that point they had only given us 10 days to cancel. How were we to know if we were satisfied with the service or not? It had only been in distribution for four months. Right now my focus is to deal with the CA but this is definetely some good stuff to keep in mind (and on file) provided we do end up being contacted by an attorney.
Did you directly talk to the representative, or just leave a message on his voice mail? If you talked to him directly, and he didn't bring up the "cancellation policy", and just said "I'm sorry to hear that." or something, maybe you should go after him as well. Where did they represent these "directories" would end up, and how many actually ended up there? In other words, did THEY breach your contract by failing to perform, or did they even intend to do what they represented they would do? That is why you might also look into other complaints against this company. There might have been regulatory or legal action against them somewhere if their actions were too shady, in which case they might not want to enforce their contract in court.
If the sales rep simply disregarded your cancellation, you may have a counterclaim under your state's unfair/deceptive business practices laws, fraud laws, or other claims. Check your state law and if you get sued definitely hire an attorney to explore counterclaims.
