It is not necessary to accept everything as true, one must only accept it as necessary.
October 16, 2006 8:45 PM   Subscribe

T-Mobile has eaten away at my soul. What can I do now, if anything? Long rant inside.

On Saturday, I received a telephone call from Bay Area Credit, the collection agency for T-Mobile. I was told that a bill for $60.83 was unpaid since June. This seemed very strange to me, since I have always paid my bills in full and never been late. The collection agent told me the account number for the unpaid bill (which I neglected to write down), and I saw that it differed from my T-Mobile account. I asked the representative about this, and was told that a new account was opened on June 11, and then the line was transferred to my existing account later in the month. (She told me the exact date, but again I did not write it down.) In fact, I had added a telephone to my Family Share plan on June 11th. I didn’t open a new account however. I found my T-Mobile contract, and it is clear that I signed up to an addition line to my existing plan at $9.99 per month. Upon hearing this, the representative said I should speak to a supervisor, but because it was a Saturday, no supervisor was available. She then suggested that I fax in my T-Mobile contract and wait 7-10 business days for an answer.

On Sunday, I called T-Mobile. I wanted to make sure that the collection agent wasn’t some sort of scam, and I wanted to get more information about the delinquent account. The representative looked up my information and saw that I did have two accounts listed, and that one had been sent to the collection agency. I asked him for the account number, explaining that I had neglected to write it down the previous day. He read off the first three numbers, then stopped and told me he needed to put me on hold while he collected some more information. After a few minutes, he came back and told me that because the account was now in the hands of the collection agency, he could not give me any more information. I asked to speak to his supervisor. I asked her the account number and she answered “We do not have that information to give out.” I asked her what address the bills were sent to, and received the same answer. I asked her the total amount of the bill and got the same answer again. I pointed out to her that it was clear that T-Mobile does in fact have the information, since I was just given the first few digits of the account number, and she finally explained that she does have all the information I was requesting, but she was obligated not to tell me anything and that I could only deal with the collection agency directly. She also recommended that I call Bay Area Credit first thing in the morning. If I waited longer, major damage could be done to my credit.

This morning, things started getting very strange. I called back Bay Area Credit, once again explaining this whole mess to the agent. I told her that I thought this might be a case of identity theft, since I clearly never opened another account. She suggested I talk to T-Mobile about my situation. After I told her that T-Mobile wouldn’t talk to me, she said that I should just pay the $60 since T-Mobile had determined that the charge was legitimate. I explained that I was willing to pay if I owed the money, but I wanted to know exactly what I was paying and why I had another account open. When she couldn’t help me further, I asked to speak to her supervisor.

Richard Anthony, the Bay Area Credit supervisor, was on the offensive even before I had a chance to speak. He accused me of screaming at his staff and his clients. (In fact, I was able [barely] to stay calm and polite through this entire ordeal.)When I asked him how the account could have been opened without my permission, he sarcastically asked if I thought he was my personal financial advisor. When I explained that I never received any bills for that account, he accused me of falsifying my address to T-Mobile. When I asked if he could send me a written bill, he said I would probably stop payment on the check I sent. He then told me that I had ten seconds to agree to pay the bill immediately by credit card or he would hang up, cut off my current cell phones and destroy my credit.

Of course I paid. $60 is certainly not worth the damage that would be otherwise be wrought. But I am boiling inside. I have never in my life been treated like this. The tangible loss is minor, but the intangible loss is eating away at my soul. What, if anything can I do now?
posted by Etaoin Shrdlu to Law & Government (39 answers total) 7 users marked this as a favorite
 
Best answer: I would recommend sharing the experience with others to prevent others from suffering. Perhaps try posting a question about it on AskMeFi so others know?

You might also try talking to highers-up at T-Mobile and write letters to the VP of Customer Service.
posted by JMOZ at 8:50 PM on October 16, 2006


Best answer: The Consumerist would like to hear about it, I'm sure.

(Link them here. Or cut and paste.)
posted by disillusioned at 8:51 PM on October 16, 2006


I was treated once this way by a collection agency over a delinquent Best Buy credit card account (I had long since paid the balance -- I just kept getting dinged for penalties and interest on penalties). I was going through cancer treatment at the time when they called to harass me -- when I explained why I literally didn't have the energy to get off the couch to go looking through a pile of paperwork to prove I'd already paid the fucking bill, the guy started laughing and said "even if you die, we'll still come after your family and your kids, till they wish they had cancer and died along with you."

So console yourself with the thought that these are sick, soulless motherfuckers who probably hate themselves more than you or I ever could. And check your credit report regularly to make sure the debt is listed as having been paid.
posted by scody at 8:52 PM on October 16, 2006 [4 favorites]


Holy shit scody! If only you could reach into the phone...That guy is a sociopath. Who says shit like that?
posted by wilde at 9:13 PM on October 16, 2006


Best answer: BTW, you could have probably gotten a written notice.

See this ftc page about how debt collection agencies operate.

Additionally, I think they are obligated to send you a written piece of paper and, if you challenge the validity of a charge, they have to send you more documentation to "prove" that you owe the debt. Also, you might be able to sue under federal law (although not for much). It sounds like the supervisor was definitely using various lies to convince you to pay up (which is illegal) if not quite threatening you.

Rachael
posted by R343L at 9:24 PM on October 16, 2006


well, you've kept me from ever considering switching to T-mobile, if it makes you feel any better.
posted by StrasbourgSecaucus at 9:44 PM on October 16, 2006


Complaint letter to T-mobile customer service; Cc: the CEO's office; complaint letter to Deutsche Telekom, T-mobile's parent company; Cc: the CEO's office. These are the effective letters, especially if you detail that you're a customer in good standing and good faith who wants to pay his bill, and that you were prevented from knowing what the hell was going on by their crappy customer service.

In general, in my experience, T-mobile's customer service has been far superior to AT&T Wireless, Cingulair, and (spit) Verizon Wireless. That's why I'm on my 7th year as a T-mobile customer.

Send copies of your letter to the FTC and the German Ministry for Consumer Protection. But don't get your hopes up. Government isn't for protection of the little guy in 2006 (if indeed it ever was.)

And then you're done, there's nothing else you can do. Move on.

The next time a credit agent starts harassing you, politely inform him that the call's being recorded. It'll prevent him from skirting the edge of the law the way he did; credit agencies can't refuse to provide you with a written summary of the bill, although most will change the subject again and again and again when you ask them to send you one. If you're persistent and you tell them the call's being recorded, though, they won't risk going on record breaking Federal law.
posted by ikkyu2 at 10:06 PM on October 16, 2006 [1 favorite]


Best answer: I would suggest talking to the Better Business Bureau in Oakland. Becuase T-Mobile is a large company, they may refer you to someone else. However, they should be able to give you some info on the local collcetion agency.

I had a friend who got screwed over by a credit consolidation agency. She ended up talking to the Illinois Attorney General's office (I'm in Chicago) to get back the money they scammed out of her. Here's the Attorney General in California.
posted by youngergirl44 at 10:08 PM on October 16, 2006


I had tons of bad experiences with T-Mobile. What you need to do is continue to ask to speak with supervisors and managers, document everything in writing, and contact the better business bureau. They are a pain to deal with, but the bright side is that you can pretty much blackmail them into tons of free minutes and even free months because at least they are aware of their incompetence.

I worked on a lawsuit related to shady debt collector practices and nothing you tell me surprises me. Obviously, they cannot behave like that and you need to lodge formal complaints against them (also check out the identity theft link here).

If a debt collector is working your account, one of two thing happened (1) Tmobile outsourced them to work your account and tmobile still owns your account or (2) tmobile sold them your account. the latter is less likely if the line was signed up recently, but it could still be the case. When a debt collector owns the account they buy at a deep discount (8-10 cents on the dollar at the most) so they are always happy to make you pay something - 50% or so - so that they can make a profit and be done with it. If you take up too much of their time they could potentially give up. Continue threatening legal action and if you know any lawyers have them write letters. If you make things difficult enough for these guys, they'll drop it.

Sorry, i know how bad it is, but that's the nice thing about America. If you're annoying enough you can fix any problem and get anything you want.
posted by BigBrownBear at 10:08 PM on October 16, 2006


Agreed, after reading this I will never deal with T-Mobile, ever.
posted by chef_boyardee at 10:26 PM on October 16, 2006


It's really horrible what this bill collectors did to you and the have a special place in hell for thier misdeeds. Educate yourself on how to deal with bill collectors -- we need to take advantage of all the protections that the government has given to us in this matter. ( Hrm, how sad that I think that the government gives us something, when it's us that gives them the power

I hate to stand up for any corporate interest, but it wasn't T-Mobile that did this, it was a bill collection company. T-Mobile did what any decent sized company does, after they have a debt that's not being paid, they sell it to the highest bidder. So that removes T-Mobile from this really -- they sold the debt. It's really just a commodity at this point. I think at this point all T-Mobile would have to do is provide proof that you incurred this debt.
posted by bigmusic at 11:29 PM on October 16, 2006


My guess is that delaying to pay a $60 fee of dubious documentability is going to do little if any damage to your credit (assuming you eventually pay up, if it's legit). Of course, it's easy for me to say that when I'm not on the phone with a guy who spends all day every day practicing scaring people into sending him money.

I'm with ikkyu2; next time, don't send anyone money until you have written documentation showing that you owe them something.
posted by hattifattener at 11:31 PM on October 16, 2006


I have been very happy with my T-Mobile service for about four years. However, after reading this I will certainly think twice about renewing my contract with them. I'd forward this thread to T-Mobile so they can see the damage in customer faith that this sort of predatory practice has caused. At the very least T-Mobile should be made aware of the methods used by this vicious creditor.
posted by wfrgms at 11:42 PM on October 16, 2006


They dicked me out of something like $250 when I moved out of the country. They wouldn't accept anything short of a land deed or new drivers license as proof I was really moving. Not work contracts, not letters from my bosses, nothing.

To be even bigger dicks, my representative cut my phone off the moment I got off the phone with him. My last words were, "OK, I need to let you go. I have people calling asking directions to my going away dinner.

Never again.
posted by trinarian at 1:01 AM on October 17, 2006


err, I guess my answer isn't a good one or even very clear. My response was an decision to never do business with them again and to spread the hate. Mark mine as worst answer, all the others are good... but I'd still stop doing business with them.
posted by trinarian at 1:08 AM on October 17, 2006


Of course I paid.

That's a shame. I wouldn't have.

Sorry you were treated so poorly, but if it's any consolation, I happen to be in the market for a new cell carrier, and thanks to your post, I won't be going with T-Mobile.
posted by Civil_Disobedient at 1:31 AM on October 17, 2006


Best answer: As well as the consumerist I'd recommend mentioning it on GetHuman, more than likely you'll find some even more pertinent info there.
posted by chrissyboy at 2:19 AM on October 17, 2006


I certainly wouldn't have paid unless I felt that fixing the problem wasn't worth $60 of your time. This guy was probably just trying to scare you into paying quickly so he could go back to something else.

And as someone else said, this has little to deal with t-mobile. Yes, they messed up your account when you signed up for the extra phone. But everything else they did was what you would expect from any company. I had a similar situation with another company; I added something to my account, but they messed up and created a new accoun instead. Not knowing about the new account, I of course never paid a bill, and Nine months later, it went to a collection agency. I eventually resolved it and never paid anything.

I wouldn't switch phone companies because t-mobile is generally regarded as having better service than the rest except verizon.
posted by spira at 2:20 AM on October 17, 2006


Response by poster: There are several reasons why I'm not willing to let T-Mobile off the hook here. Firstly, they never sent me a bill nor attempted to contact me. I've had a working T-Mobile account through all of this, so it's not like they didn't know where to find me.

Secondly, T-Mobile and Bay Area Credit are clearly joined at the hip. Bay Area Credit has total access to all of my T-Mobile records, including full notes on my calls to T-Mobile the previous day -- who I spoke to, what I said, my supposed tone of voice. This is not merely a case of T-Mobile selling my debt to an outside agency to cut their losses. Bay Area Credit seems more to be the enforcement arm of T-Mobile, legally separated just enough so that T-Mobile can be absolved of responsibility for Bay Area Credit's heavy-handed scare tactics.

Plausible deniability isn't just for the goverment any more.
posted by Etaoin Shrdlu at 3:01 AM on October 17, 2006


This kind of crap is the reason why I'm tempted to start recording all my phone calls. Canadian law requires "one party consent", i.e. if you are recording your own calls, it's perfectly legal. In the US the law varies from state to state.
posted by lowlife at 4:39 AM on October 17, 2006


Oh, in response to the comment just above mine, I'd like to add some information about how collection agencies and their customers (i.e. T-Mobile in this case) are associated.

I have some experience with the information a large utilities company in North America shares with their collection agencies (yes, they use several). There isn't a huge amount of information going to the collection agency. The aforementioned utility sends contact information, the amount of debt outstanding, and they may also send the age of the debt. The collection agency does not have access to the internal systems at the utility, and they don't need it - the debt has already been bought by the agency, and written off by the utility.

The collection agency may appear to be an "enforcement arm" of their customer, but that's because it's a perception that people are more likely to submit to.

I'm not trying to be an apologist for collection agencies here, I think they're mostly a bunch of assholes.
posted by lowlife at 4:45 AM on October 17, 2006


Former worker in collections here (and I was not an asshole. At least I tried not to be. I hated my job and was as lenient as possible to people.)

Once a company has given a debt to a collection agency, all communication about the debt has to go through the collection agency, not the company. That's why T-Mobile couldn't give you any info.
posted by Lucinda at 5:16 AM on October 17, 2006


Best answer: Fair Debt Collection Practices Act.
posted by footnote at 6:04 AM on October 17, 2006


Response by poster: Yes, I understand that T-Mobile could not give me any information about the account once it went to the collection agency.

What I find inequitable about this situation (and why I believe that T-Mobile and Bay Area Credit are closer joined than the typical client/supplier relationship) is that T-Mobile has continued to provide information to Bay Area Credit after the account has gone to collection, such as the details of my call to T-Mobile the previous day.

Bay Area Credit also has all the information for my current account, never delinquent. Richard Anthony, the Bay Area Credit supervisor, threatened to suspend service on all telephones on my CURRENT account if I did not pay the bill immediately.

None of this corresponds to lowlife's description of the role of a collection agency.
posted by Etaoin Shrdlu at 6:50 AM on October 17, 2006


Response by poster: Thanks everyone! I've sent messages to T-Mobile's Senior VP of Customer Relations, VP of Customer Relations, the Better Business Bureau, the Federal Trade Commision, Consumerist, and GetHuman.

I don't really expect to hear anything back from anyone, but I'll update this thread if anything happens.
posted by Etaoin Shrdlu at 9:39 AM on October 17, 2006


I AM A BILL COLLECTOR.

*cough*

That being said, I can tell you what stops me dead in my tracks before saying anything even remotely rude or snarky to a debtor; the mere mention of the Fair Debt Collections Practices Act. As Bigmusic stated, it's absolutely vital that you learn what is and isn't legal when it comes to collections, because, trust you me, collectors step over that line all the time and if you catch them, it can pay off big time.
Example; I know a collector who, a few years ago when I worked at Conseco, was tired of people using their children to screen calls. One day, a little girl of about 10 years old answered the phone and told him that her parents weren't home. The collector told the little girl that he was across the street and could see that her parents car was in the driveway and that she was lying. Unfortunately for the collector, not only were the parents not home, but he managed to scare the little girl so bad she hung up on him and apparently hid in her bathtub until her parents got home. The parents called in absolutely furious, citing the FDCPA, third party disclosure laws, and dropping the name of their attorney.
Not only was the collector fired, but Conseco ended up forgiving them the balance of their entire mortgage just to avoid litigation.
So yeah - knowledge is power. The collection practices many of you cited in this thread are way out of bounds.
posted by Bageena at 12:03 PM on October 17, 2006


Best answer: Well, you fell for it, OP. The collections guy lied to you in order to get you to pay, and in doing so violated your rights under the Fair Debt Collection Practices Act. You could have sued them to $1000 per violation if you could have gotten them to put it in writing. Maybe you wouldn't even have had to do that, you could have filed suit and subpoenaed the call records, because you know they recorded it.

Now that it's paid, you'll have to monitor your credit reports to make sure that they actually report it as paid as agreed, which they most likely won't, at which point you'll have to file suit to make the credit bureau remove the erroneous record from your file and prevent it from being re-added.

Lesson for next time? Don't talk to any collection agency over the phone, and don't believe anything they tell you. They must provide you with a copy of the original contract from T-mobile and proof that the debt is theirs to collect or they can do nothing to you, not call you, not bill you, nor report anything to the credit bureaus. If you don't pay, the only resource they have is to report it to the credit bureaus. They can't legally take any other action, but they do all the time because it works and people don't know any better.
posted by Mr. Gunn at 12:17 PM on October 17, 2006


I once had a horrible experience where I was genuinely trying to figure out how to pay a debt and this guy just kept screaming at me, YOU'LL NEVER BE ABLE TO GET A LOAN AGAIN, A STUDENT LOAN, ANYTHING. Even though I never would need a student loan, he just kept screaming and ignoring my questions saying that I was playing games, demeaning me until I was sobbing. He called me many times a day. He eventually called my freaking DAD to harass him after I'd figured out a payment plan for the debt. AFTER. This was genuine harassment but I didn't realize it at the time, I've never had a credit card or a loan since he so scared the shit out of me.

Then I learned that that kind of behavior in NYC is illegal. There was a NYT article about it that I haven't been able to find. It was very empowering and I've never been harassed since, since I always point out when they're starting to go over the line. It's always when I'm trying to understand what they're calling about, if I paid that bill already, and they never have the patience to explain it to me. They always take that opportunity to start saying that I have to pay this bill right away OR ELSE.

Anyway, I have nothing to contribute except my personal experience. And yea, knowledge is power.
posted by scazza at 12:29 PM on October 17, 2006


Just a (hopefully) helpful hint to ANYONE who's gotten something on their credit report they'd like removed, legitimate or not:

1. Go down to a local CCCS (credit counseling service) and get paper dispute forms to send to the three major credit agencies (Accurint, Experian, Transunion). It looks like you can also find it here. Do not, and I repeat this, DO NOT file a dispute electronically. It's all to easy for them to lose them or just reject them outright with little to no research.

2. Take said paper form and fill out whatever account your disputing, one per sheet, three sheets, and send them out via certified mail to said credit agencies. Even if you have three different items your disputing, only put one per sheet. The idea is to make whomever's job it is to research these disputes lives difficult by piling on the paperwork.

3. From the time they recieve your dispute, the big three only have 30 days to get the information back from the companies reporting you that the debt is yours and that it's valid. If even one of the agencies can't get something from the company showing that the debt is yours, they have to remove it from your report Once they do that and send you notification of it, you xerox off a few copies and send it to the other two agencies. They will also have to take that item off your credit report.

4. Finally, if all three of them come back within the 30 days and say that the company did verify all the information on your credit report as correct, repeat the above steps again. If they all come back a second time, do it once more but this time either check the box on the dispute form or write in that you want signature proof. Basically, that means the company has to produce the original contract with you showing your signature. Most companies don't keep records longer than a few years close at hand. Remember, if even one of the agencies can't verify that a debt it yours within 30 days, they all have to take it off.

THAT'S how you cheese your credit score up about a bajillion points in just a few months. Trust me - I've done it. =)
posted by Bageena at 1:41 PM on October 17, 2006 [13 favorites]


Oh yeah, and you can get a copy of your credit report for free once a year at this site. It's the law baby!
posted by Bageena at 1:42 PM on October 17, 2006


For the sake of everyone else who reads this, since it's too late for you.

NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER NEVER DEAL WITH A COLLECTION AGENCY ON THE PHONE.

For one, they bamboozle you into agreeing to stuff like this before you can post to Ask and learn what you can really do. There is nothing they can do to you that you don't have at least 72 hours to deal with, up to an including suing you so don't EVER be pressured into compromising your negotiating position this way.

For two, they do all kinds of outrageous things in a way that you can't prove since odds are it's your word against theirs.

The FDCPA prevents them from calling you in any circumstance that's inconvenient. The definition of inconvenient is that you say it is. "It's not convenient for me to discuss this kind of thing on the phone. Please make all your future communication with me via mail." THEN HANG UP.

If they call back, violation. Ka-ching. If you can't record it, make a note of the day & time. If you hang up on them and they call back again, violation. By the way - please stop saying $1000, Gunn - it's $100 per violation up to $1000 per case. There are things that can ratchet that up but it's $100 for sure, not $1000.

Some good links in my past messages here and here and these both look good too.

As far as T-Mobile not being "able" to tell you anything, that's a matter of contract between themselves and the debt collector, not a matter of law. Collections can be transferred back to the original creditor and it happens all the time. Often that's just the first step before it goes to another DC who's gonna take a whack at you, but if you make life difficult for the DC they can toss it back so you can deal with the original creditor.
posted by phearlez at 2:48 PM on October 17, 2006


How about any t-mobile customers out there write customer service and ask them if maybe they have an answer? Something along the lines of will you treat ME this way someday? Also if they plan to continue to contract with the collection agency who has been extremely rude to a decent customer.
posted by occidental at 7:17 PM on October 17, 2006


Response by poster: And the winner is JMOZ, who in the very first answer suggested getting in touch with a VP. I received a message back from John Birrer, T-Mobile's Vice President of Customer Service, who replied very quickly to the e-mail I sent him. Shortly thereafter, I received a call from someone in the Executive Office. They agreed to deduct the airtime charges from the mystery bill (I told them that I have no problem paying the activation fee), send me a copy of the bill, and investigate Bay Area Credit's practices.

Interestingly, it appears that I was right about Bay Area Credit being the enforcement arm of T-Mobile. I was told that they are not a "real" collection agency, and are not capable of damaging anyone's credit.

Thus it seems that Richard Anthony was blatently lying to me in addition to being verbally abusive. I pointed out to John Birrer in a follow-up message that Bay Area Credit was quite clearly in violation of the Fair Debt Collection Practices Act.

I'm quite satisfiied with the outcome of this situation as things stand now, and I'm certainly not going to sue anyone anyway, so I will leave things as they stand. I just hope that somehow T-Mobile really does take a look at the practices of Bay Area Credit and that some good can come out of this whole ordeal for other people who happen to find themselves in the same situation. And I sure learned a lot about collection agencies!

I invited the T-Mobile bigshots to this thread to see the types of responses I received. So everbody be sure to dress well and keep the place clean!
posted by Etaoin Shrdlu at 8:00 PM on October 17, 2006


T-Mobile is generally awarded with favorable reviews of their customer service, though you shouldn't have had to jump through quite so many hoops to get the outcome you desired and deserved. I'm sure they'll pay more attention than you may think, considering how quickly (read: like wildfire) things can spread when you mistreat a customer. And your name is AOL.
posted by disillusioned at 3:51 AM on October 18, 2006


I had a similar thing happen with Cingular. When they "merged" with AT&T, I had to transfer my AT&T line to Cingular in order to change plans. This led to them closing my former AT&T account and opening a Cingular one.

Fast forward a year or so, and I get a call from the Collection Company of America (how's that for a name?) and they claim I owe Cingular $100. When I call Cingular about it, they claim I owe them nothing. Finally, I called the random office that deals with the AT&T/Cingular transferral process, and they manage to find something that shows that my old account had a balance that didn't get transfered to the new account, and this had my old address listed, because the new address I gave Cingular didn't actually propagate over to the AT&T side, and evidently they *don't talk to each other*.

What I can't figure out, in situations like this, why they send this debt to a collection agency at all, when they could just *call you* (it's not like they don't have your number.) They essentially sell the debt for pennies on the dollar to the collection agencies, who make their profit by attempting to recover it.

If they just got their act together, they would recover their money in full (if it's not in error) and they wouldn't piss off so many customers. If I'd gotten a pleasant phone call from Cingular saying, "Gosh, we're sorry- There was a balance on your old account and we didn't catch it until now because we forgot to update that account with your new address. Can you pay us now?" I probably would have responded, 'Do you take VISA?'

In the end, I had to pay the collection agency, and Cingular gave me a $50 credit as an apology.

I've posted a helpful email I received when looking for advice. Hopefully it will help others that are looking for answers, too.
posted by squishy at 10:47 AM on October 18, 2006


They essentially sell the debt for pennies on the dollar to the collection agencies, who make their profit by attempting to recover it.

No.

You are confusing junk debt buyers with collection agencies. Collection agencies operate on a contingency basis where they keep some percentage of the collected debt. The debt continues to be owned by the original creditor, they are merely acting as a proxy. CAs may have a contact with the creditor whereby they get paid a nominal amount for their services as well, but odds are they get in the neighborhood of 20% of the amount collected.

Junk debt buyers purchase the debt from the creditor and it is transfered to their ownership. THEY pay pennies on the dollar, primarily because efforts have been previously made to collect the debt, paperwork may be limited or nonexistant, the debt may be old etc etc etc etc.

Some companies may be BOTH JDBs and CAs. Some JDBs service their own property and some farm it out to other CAs.

But a collection agency is, by definition, not an owner of the debt. They are an agent of the creditor attempting to collect.
posted by phearlez at 12:22 PM on October 18, 2006


That's interesting, phearlez. So how do you know when you're dealing with a collection agency vs. a junk debt buyer?

Honestly, my debt was valid, if absolutely not my fault, but from the first interaction with them to the last, it felt really really dodgy. The first thing that happened was I received calls from unlisted numbers with voicemail messages such as, "This is regarding an important business matter. It is important that you return this call *immediately*, on 1-800-[something]." Nothing more. That, combined with the company name of "Collection Company of America" and no information about why I owed this debt, let me to believe that it wasn't exactly an upstanding business.
posted by squishy at 10:01 AM on October 19, 2006


I have to run to a meeting but in short: it's very hard to know. Certain companies (asset acceptance, to name an infamous one) are infamous. Others less so. There's debate about their obligation to disclose to you if they own the debt.

As far as the vague message, it's because of FDCPA. They can't legally disclose to anyone that you're a debtor or in arrears. So if they leave a message they don't know who will hear it and therefor could open themselves up to an instant $100 fine.

Look in some of my past answers - there's links to discussion boards that talk about JDBs etc. Or google up a dude named FlyingIFR - he's got some writeups on identifying JDBs and dealing with them.
posted by phearlez at 11:33 AM on October 19, 2006


Also keep in mind that many companies have internal collections departments. If a collections department is captive to a company, then they aren't strictly regulated by the FDCPA.

These are often for places like your auto finance company or your mortgage company, and you'd probably only be dealing with them if you're less than a few months past due. These types of situations don't go to litigation or outside debt collection until way, way past due.

Lots of good advice in this thread, though. DON'T EVER PAY until you get all the information. And I mean ALL of it. Get EVERYTHING in writing. Don't pay just because you want to avoid the credit hit UNLESS you KNOW that this is a valid past due payment that you've been avoiding. Fact being that if you pay, you're sometimes opening yourself up to have something reported that wouldn't have otherwise been reported, or may have already dropped off your report. There's plenty of good information about these types of things on the internet and MeFi, tho.
posted by PandemicSoul at 12:25 AM on April 6, 2007


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