I had a credit card charge off. They made me a settlement offer by mail. I called them and told them I didn't have the full amount at that time. They said I could make it in 3 payments. I made the payments within the allotted time. 4 months later I get a letter from a colletion agency saying I owe the rest of the money. I call the credit card and the Cus. Service Rep apologizes and says that somehow my payments went in as regular payments, not as a settlement, and she would have her manager sign off on it and contact the collection agency. 2 months later and more letters from the collection agency. I call the credit card again and the Rep says it was a high settlement offer (yeah, we'll you guys made it!) and he'll show it to his manager to sign off on. Months later it hasn't happened and still calls from the collection agency, which I do not answer. So what I want to know is: Can they make you Settlement offers by mail or verbally, and then not honor them? Or are they just trying to see if they can get more out of me before they sign off on it? This was last October I made my final payment. Don't they have to report something either way for tax purposes? How long can they keep this hanging? What should I do, just wait it out or take some kind of action? Anything legal I can do or threaten to do that will make them sign off on it?
Did you keep notes, and get the names of the people and the dates of your calls? If so, I would outline the complete problem, including the settlement offer they made to you, your acceptance and payment in accordance with their offer, the various people you spoke to who claimed they were going to fix it, including what they said the problem was (they have acknowledged that there is an agreement, and that they didn't handle the posting of your payments in accordance with it), and the fact that their CA was attempting to collect amounts beyond the agreed settlement, and ask them to fix it in accordance with your settlement agreement. Send it to their executive offices, CRRR. They may just claim no such agreement existed, in which case you know what type of company you are dealing with. But they may also correct the account to settled as you agreed.
Hope the collections agency also gave you confirmation numbers for your payments. This would back up the fact that you made the payments . Did you get another settlement offer letter outlining the payment arrangements? If you went off of the settlement offer that you recved in the mail, it normally states that you will have to pay the settlement offer amount in one lump sum and no later than a certain date and a payment plan off of this letter would be considered a payment. And Ontrack is right as well with documentation. Its the key to everything when you deal with a collections agency or with anyone in general.
I made the payments directly to the credit card company before the collection agency was involved. But they're not denying I made the payments, I mean, after all, that can be proven with my bank records. And they're not even denying that they made a settlement offer that I payed off on. But they are giving me a run around by saying a manager has to sign off on the settlement. Which says to me they're hoping to get more from me by letting their collections agency harrass me. I'm just wondering how long that can go on. Indefinitely? I thought they have to report this amount owed to them to the feds so that I can pay taxes on it and they can get some kind of tax benefit from it. Or they have to balance their books each year? Anyone know?
For tax purposes if your settlement offer saved you 600.00 or more then you would be sent a 1099 form to report this savings as "income." So if your debt was 1200.00 and they settled with you on this debt for 600.00 then the remaining 600.00 is what you would report to the IRS as income. So as you know, yes they have to report it to the feds. If the collections activities continue, in my opinion (again i would probably be corrected by someone out there) i would dispute it with the credit bureaus or validate the debt with each collections agency that it goes to. On another note, if you are calling the original creditor and the reps are telling you they will submit for the correction with their manager, ask to speak to their manager yourself and see if you can get it resolved this way by speaking to the manager. Advise the manager that you are still being dunned with letters and or calls from collections agency and will report to appropriate authorities if needed to get this resolved. Again this is just my opinion.
