Wrongly Addressed Bill Leads to Ruined Credit by NCO

Discussion in 'Credit Talk' started by mbjacobs, Oct 17, 2009.

  1. mbjacobs

    mbjacobs New Member

    Hey everyone,

    It seems like there are a lot of people on here with a lot of experience. I have never had anything like this happen to me, but I was hoping someone might have some advice.

    I'm 26 years old. About a year ago, I signed up for monthly credit monitoring with freecreditreport.com. I was watching my credit slowly rise from great to phenomenal, finally hitting its peak last month at 761. I have never missed paying a bill on time, usually have less than 15% of my available credit used and have a bunch of accounts (utilities, credit cards, an unsecured loan) I keep in perfect standing.

    Until a few months ago, I was living in New Orleans. I went to the emergency room one night, resulting in numerous bills. I was under the impression that I had paid off every single one of them, and moved to New York thinking I was all up to date.

    I was checking in on my credit last week as I do once monthly and saw to my horror that my credit had dropped from 761 to 654. It turns out that NCO Financial had hit me with a creditor alert (see bottom of message) saying that I had an unpaid debt of $87.32 from a medical bill from the ER. I never received this bill, at least before I moved (which was months after I had originally went to the emergency room). The ER billing department had never contacted me by phone and neither had NCO when they flagged me.

    Naturally, as soon as I saw this, I freaked out and called NCO. They told me that they have an absolute, 100% "no deletions" policy, even though I never received a bill for it. Now that I'm looking through everyone's advice, I can see I did what I should not have done - I immediately paid the bill on the spot to NCO thinking that was the best thing I could do. NCO told me to call Experian but Experian told me that it was completely up to NCO. I filed a dispute online, but was told that there was no change in my status!

    So, am I completely screwed because I have already paid NCO? Do I have no grounds for further dispute? Who should I talk to?

    I feel completely powerless. I have never not paid a debt I've known about in my life and had my perfect name destroyed (98th percentile to 31st percentile) in one day because of a bill I had never heard of in my entire life. Within ten minutes of hearing about the bill (from their first contact with me, which was by flagging my credit report), I had it paid in full to NCO!

    Does anyone have any advice at all? Do I have any grounds to defend myself? Who should I talk to? In the worst case scenario, how long will it take me to begin making a recovery from this? How can I have paid probably $100,000 in bills, rent, taxes and loans in perfect standing for my entire life, and be destroyed by ONE single bill, whether I missed payment legitimately (which I did), or illegitimately.

    Thank you for any advice, and sorry to write such a long thing. I don't know who to talk to.

    Below is the credit flag I got:

    NCO FIN/55Potentially Negative Closed
    Mailing Address:pO BOX 13570PHILADELPHIA, PA 19101More Account Details

    Account Name NCO FIN/55
    Account # XXXXXXXX
    Account Type Collection Department / Agency / Attorney
    Balance $87.00
    Date Opened 8/1/2009

    Account Status Closed
    Mo. Payment
    Close Account Details Past Due $87.00
    Payment Status Seriously past due date / assigned to attorney, collection agency, or credit grantor's internal collection department
    High Balance
    Terms 1 Month
  2. ccbob

    ccbob Well-Known Member

    1st in spite of what free credit report might say, your credit is not destroyed. the new FICO 08 formula ignores collections less than $100 because of the very think you're experiencing. The Free credit report.com score is more for entertainment than anything else.

    [edit] I just re-read that you paid it. So ignore what follows (however everyone else reading this can learn for next time). If you've paid it, it'll be very hard to change so you'll probably have to live with it for the next few years until it's 7 years old and falls off.

    Live and learn. It's happened to others so don't beat yourself up over it.
    [end edit]

    2nd call the hospital billing dept. and see if you can work out the payment with them. Explain what happened and see if they'll recall the account from NCO and take your payment directly. If they recall the account from NCO, the collection entry should go away shortly as well.

    3rd. Be sure to send a dispute and validation letter within 30 days of the date you received the letter from NCO. Whether the hospital takes the account back or not, you'll still want to preserve your rights under the FDCPA.
  3. cap1sucks

    cap1sucks Well-Known Member

    I'm sorry to hear about your plight but it does illustrate how badly people who try to do the right thing and pay what they owe are treated when they pay a debt collector anything. I constantly advocate that people should never pay a crying dime to a debt collector for any reason. Your story should prove my point to anybody who reads about it but they will probably continue to do it anyway.

    Everybody should dispute their debt no matter how small or how large it may be. The very fact that a debt collector has stuck their nose into the problem should logically anger people so badly that they will do whatever it takes to make absolutely certain that the debt collector will never again make the mistake of contacting them in any way whatever. They should do all in their power to make that debt collector cringe in fear at the very mention of the debtor's name.

    Doing that may be time consuming because the debtor has quite a bit to learn. S/he must first of all learn about debt validation and how to write an effective debt validation letter. S/he must learn about the other letters that should be sent out on a timely basis and how they should be written. I believe that the final letter should be a fully prepared federal lawsuit ready to go file accompanied by an properly prepared intent to sue letter and waiver of service of summons. That set of documents should tell any debt collector with an IQ greater than their shoe size that unless they wake up and die right they are going to face some very dire consequences. The debt collector should be given only a minimal amount of time to correct the problem before the consumer actually files the case in federal court which should then be done with no further ado.

    In your case, you paid the debt collector so you admitted that you owed the debt and therefore ostensibly have no recourse but to suffer the consequences for the next 7 years. That is the common thinking but maybe it doesn't have to be that way at all. Maybe there is a possible remedy. The question has to be whether or not the debt collector had a permissible purpose to put that derogatory listing in your credit report in the first place. Did that debt collector prove that you owed the debt before the adverse listing was placed against you? If not then he violated FCRA and is liable to you for $1,000 times the number of months the listing remains in your credit report times the number of credit reporting agencies that wrongfully carried the listing. One year in all three credit bureaus amounts to $36,000 in damages plus any additional damages you suffered due to having been turned down or maybe by being forced to pay higher interest rates or maybe by having been turned down for employment.

    Another question might be whether or not the correct codes were used in getting the listing placed. If they used the wrong code they could be liable for that as well. Did they provide any false information to the credit bureaus? Did they attempt to illegally re-age the debt or attempt to do so causing the listing to stay in your credit reports longer than the time allowed by law? There may be other issues as well but you should do your diligent research to see what they may have done that they should not have done. Others may say that none of that could possibly make any difference now because you paid the debt thereby admitting that you owed the debt. That may or may not be true but there is only one way to find out and that is to do your homework and if you find cause of action then learn how to prepare your federal case and go file it.

    If you do what I suggest you just might come out of it with a clean credit history and more actual cash in your hand than most people will ever hold in their hands at one time in their entire life. So now, the greater question is whether or not you will actually do the homework it will take to do what I suggest or not. If you aren't willing to do that then I'm sorry but you paid the debt and now will have to live with it for the next 7 years or so. The ball is in your court. What will you do with it, dribble it down the court and try for a basket or will you fumble? Its all up to you. Whatever you decide to do I wish you the best of luck.
  4. ccbob

    ccbob Well-Known Member

    It's not like I have a soft spot in my heart for CAs, but I'd like to where it says the CA has to prove to the debtor that the debtor actually owes the debt before they can report it. I can see how each incorrect report could be a separate cause of action, but if I were a CA, I'd say that to the best of my knowledge and based on the information provided by the OC, the reported debt was accurate and we have procedures in place to verify that. Any errors, therefore, are bonafide errors.

    That sounds like a weak case. Also, as is usually the case with this, collecting sufficient evidence to prove actual damages could be a challenge as well. Basing your case on "freecreditreport.com" score (on which no credit decisions were ever based) would also be weak.

    As an example, True Credit said my Experian score was 694 (or something like that) so I thought that if I was ever approved for credit, it would be in the 24% interest category. The bank, however, ran the same credit report and told me my score (insofar as they were concerned) was 768 and they opened up a credit line for me at the lowest rate they offered.

    If there was any wrongdoing, I think you should pursue it as far as necessary. It's quite possible that there could be some errors to unearth to the point where you could file a suit that would cause them to pay to to just go away. If it were me, I would at least research them to see if they are the type to play hardball or pay you to just forget about it before getting too excited about any windfalls. It's kindof like wrestling with a pig: you'll both get very dirty, but the pig enjoys it. If you don't enjoy doing all the research (or paying someone to do it for you) and don't enjoy confrontational "discussions," the cost might exceed the benefit. In any case, you should know what you're in for before you get into it.

    I do agree with this and wish them the OP the best of luck.

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