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Discussion in 'Credit Talk' started by Lori, Jun 20, 2000.
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They do it all the time. If it is illegal, many creditors are in violation of the law.
Typically, a credit card company will send unsecured accounts to two to three different agencies before the accounts are actually considered "uncollectable." The new agency will likely negotiate a settlement when the account nears the end of the "window of opportunity" which is typically six months. If you wait it out, they will probably send a similar settlement offer to you. If not, I suggest you start with an offer of 35-45% and figure they will accept about 50-60%. Send them certified letters and don't talk to them by phone, since they will likely try to bully you into payment in full. They will want it in one lump sum.
Read up on negotiating the deletion of the item as part of the settlement (here and other credit repair web sites). It will save you a lot of headache when you try to get rid of the derogatory listing later (unless you don't mind waiting many years for it to disappear).
My understanding is that they can sell to another agency after they have written if off. But one additional piece of information is that you can request from the new agency that they prove they actually own the debt. I found out from the FTC that there are many ways these days that people can get your information and claim that they have purchased the account when if fact they haven't.
Try calling the FTC--they give great advice and I had a VERY BIG victory because of advice they gave me and that I followed to the letter regarding a collection agency!
Tell us about your victory!
Hi Barry (and all), I did post this story once before under a different topic recently but I'll try to make it brief.
I had a collection agency contact my and my mom (my co-signer) regarding an old car loan. The car was purchased in 1996, the bank went under, (not a merger) another bank took over and was to send new payment books out and new payment address. It never happened but I kept contacting them to get the addess info so I could send my payments in. After about 3 months--nothing--so I called the number on the letter. They literally had me on hold for over 45 minutes and came back and said they had no record of the account! I waited another month or 2 and tried again--still no record. So I figured I'd just wait and they would find me when they got their act together. In the mean time--they were bought again--this time by US Bank but still I didn't hear from them. The 5 years later (a few months ago), I received a letter from a collection agency at the same time my mom received a phone call from them. I called them and got the usual--telling me that I owed the full amount of the car as if I'd made no payments whatsoever! I did realize that I owed them some but at that point had kept no records any longer but figured the amount owed was no more than $3500. They were claiming over 10,000! They claimed they would settle for $3000 but wanted a lump sum which I didn't have. I tried to raise it because I legally had time. But after I realized I couldn't I was honest with them and told them so. At that point, they threatened me and got very ugly. Up to that time, I was very pleasant with them and they were with me, I didn't avoid their phone calls, when they would leave me a message, I'd call them back! I was truly trying to work with them. After I told them that I couldn't raise the money I offered to make monthly payments which would have had the $3000 paid off in 1 year or less. They wouldn't go for it. I told them to just come and get the car and their reponse was "we don't want the car--just the money" which I thought was very odd! So in the mean time, I had called the FTC to find out my rights. I was told a couple of things:
1. Some states require collection agencies to be licensed in the state in order to do business there. Check to see if they are licensed. If not, they are practicing illegally and nothing can be enforced.
2. Because of the availability of very personal information these days, collection agencies can get your information as to old debts and CLAIM to have purchased it but really have no rights to it. But because you know you really owe the debt, you don't question it. So tell them you want proof of the debt and proof that they OWN the debt!
3. Send the "cease & desist" letter, via certified mail.
4. Keep records of everything!
I did all of the above: discovered that my state DOES require that they be licensed and they weren't. (They were out of another state). So I filed a complaint with the state agency that regulates collection agencies and banks. I asked for proof of the debt which they never provided and for proof that they owned the debt. I sent the letter via certified mail and they kept calling me and my mom anyway. I had my mom keep track of dates and times that they called and they were also calling outside of the legal hours. The final straw came when my doorbell rang before 7:00 am one morning by a guy in a huge tow truck coming to get my car! (Yes, I still had the vehicle). Because I knew my rights and the laws of this state, I told him he wasn't getting it and he left. Then a couple of days letter I got a summons to appear in court because I was being sued by them. Then I contacted a lawyer. After calling several and explaining the situation and faxing them copies of everything, they said I was screwed--that there was no way that I could win even if they were in violation so they wouldn't take the case. But I did find one that did take it---she was very impressed with what I had done up to that point and contacted them. Told them that they were in violation of many laws and apparently at that same time, that received a letter from the State Attorney General demanding answers! They buckled under--It seems that they were the true owners of the debt at that point. But they violated many laws because they underestimated me! I settled--for a small financial amount, and that the debt be removed from mine and my mom's credit report and that they release the title. They agreed and everything was final in about 2 weeks!
The odd thing about this whole situation that I still don't understand and what helped my case is the oddness of events. I have lived at the same address for the last 8 years, same phone number as has my mom. No one tried to contact either of us before that. I had no proof of past payments at that point because I was paying by money order and after a certain period of time, didn't keep the receipts. I think at some point, even though they wouldn't admit it, the collection agency knew something was screwy because they couldn't believe that I still had the car and that it hadn't been reposssed!
Anyway, that was much longer than I had planned (sorry). But that's my story! I feel very confident that I wouldn't have been successful if not for the great advice I received from the folks at the FTC!