A Matter of Life and Debt (Collectors)
May 13, 2015 1:55 PM Subscribe
A while ago, I stopped paying off an old credit card from college - I couldn't afford the payments for a while. However, once things did look better for me financially, I had forgotten about the debt. I also moved, meaning I did not receive any letters that were sent. The balance is well under $500; I know the exact amount of this debt. I just got two phone calls from debt collectors and caved to one. Did I handle this situation correctly?
I received a call from a debt collector (Collector A); thinking that it was a scam (I've never received a call like this before), I declined to verify my name and telephone number. I'm assuming this debt got moved, because I received a second call from a debt collector (Collector B), with whom I made an arrangement to pay off the balance in full on a specific date that isn't today. I made the person repeat their name, institution, and the process by which they affirm my debt was settled, over and over, before authorizing that charge. I requested a written confirmation that the arrangement was made, then written confirmation that the debt was paid in full. They agreed to this, but I did not record it on my phone. They also agreed to withdraw the collections note from my report.
While paying it off in full will still create a financial hardship for me, I am spooked by the impact that this delinquent debt has on my credit score. Even without this on the record, I made a bunch of poor decisions while trying to survive in college and have not been able to recover from them since (because I've lived paycheck to paycheck since graduation). The company to whom my debt was sold is not accredited by the BBB, which means that they can screw me over and I'll have little recompense.
Given that, these are my questions:
1) Are they *really* recording those conversations, or can they legally lie to me in order to recover the debt?
2) Was authorizing this company to charge my account via telephone a good idea?
3) While Collector A was registered with the BBB, Collector B is not, which means they can pretty much ignore any complaint that I lodge against them. If they keep reporting my debt to Experian, et al., how can I get them to stop after the debt's paid in full?
4) Given what just happened, what next steps would you take to make sure you a) weren't charged beyond the exact amount owed and b) that the collection note is removed from your credit report?
I'm now at a point in my life where having a poor credit score is going to have profoundly adverse effects on where I live and who hires me after I move on from my current gig, and that terrifies me. This is not the only debt that I have to pay off, but it is the *only* one to have moved to collections and I'd like to keep it that way.
Also, advice on how best to recover my credit rating in relation to this situation would be immensely appreciated (MeMail if it's too chatfiltery).
Thank you.
I received a call from a debt collector (Collector A); thinking that it was a scam (I've never received a call like this before), I declined to verify my name and telephone number. I'm assuming this debt got moved, because I received a second call from a debt collector (Collector B), with whom I made an arrangement to pay off the balance in full on a specific date that isn't today. I made the person repeat their name, institution, and the process by which they affirm my debt was settled, over and over, before authorizing that charge. I requested a written confirmation that the arrangement was made, then written confirmation that the debt was paid in full. They agreed to this, but I did not record it on my phone. They also agreed to withdraw the collections note from my report.
While paying it off in full will still create a financial hardship for me, I am spooked by the impact that this delinquent debt has on my credit score. Even without this on the record, I made a bunch of poor decisions while trying to survive in college and have not been able to recover from them since (because I've lived paycheck to paycheck since graduation). The company to whom my debt was sold is not accredited by the BBB, which means that they can screw me over and I'll have little recompense.
Given that, these are my questions:
1) Are they *really* recording those conversations, or can they legally lie to me in order to recover the debt?
2) Was authorizing this company to charge my account via telephone a good idea?
3) While Collector A was registered with the BBB, Collector B is not, which means they can pretty much ignore any complaint that I lodge against them. If they keep reporting my debt to Experian, et al., how can I get them to stop after the debt's paid in full?
4) Given what just happened, what next steps would you take to make sure you a) weren't charged beyond the exact amount owed and b) that the collection note is removed from your credit report?
I'm now at a point in my life where having a poor credit score is going to have profoundly adverse effects on where I live and who hires me after I move on from my current gig, and that terrifies me. This is not the only debt that I have to pay off, but it is the *only* one to have moved to collections and I'd like to keep it that way.
Also, advice on how best to recover my credit rating in relation to this situation would be immensely appreciated (MeMail if it's too chatfiltery).
Thank you.
The company to whom my debt was sold is not accredited by the BBB, which means that they can screw me over and I'll have little recompense.
This is false. The BBB doesn't actually provide any recompense (it merely files complaints which tend to result in compensation). Courts can provide recompense whether or not the company is accredited by the BBB.
Are they *really* recording those conversations, or can they legally lie to me in order to recover the debt?
This question is a bit of a misnomer - recording a conversation in no way prevents or enables them to lie to you. Their recordings would only be made available to you via a court case, so you would have to take them to court to get those recording if they did actually lie to you (and even then, the recordings might "accidentally get deleted").
Yes, debt collectors can record conversations in all states if notification is given to you (and without notification in most states). They are likely to do so in order to avoid FDCPA suits. Yes, debt collectors have been known to lie to debtors. That is illegal under the FDCPA, but no enforcement action will likely happen against the agency unless you pursue it in the court of law. No, saying that a conversation is being recorded does not obligate them to actually record the conversation, nor is it a great idea to expect them to retain that conversation if a lawsuit is not filed.
Was authorizing this company to charge my account via telephone a good idea?
No. If they renege on their agreement, than the only proof of the agreement was either lost (if the conversation wasn't recorded) or in their hands (if the conversation was made).
how can I get them to stop after the debt's paid in full?
You can sue Collector B for violating your agreement. Whether or not that is worth doing is a complicated legal question that is a function of your locale and evidence that may or not be available.
what next steps would you take to make sure you a) weren't charged beyond the exact amount owed
Close the bank account and send a letter to the debt collector revoking their ACH (automated transfer) access to the bank account.
b) that the collection note is removed from your credit report?
Wait for the written agreement they said they'd provide before providing them with your new bank account information and ACH authorization.
advice on how best to recover my credit rating in relation to this situation
This is pretty much solely a function of paying your bills, not adding more debt, and sending letters to try to get settlement agreements and/or items removed from your credit report. In my experience, CreditBoards is the best place to ask this question. Said in the best of intentions, it is full of people that don't pay their debts and don't like that fact to be on their credit report, which seems to be what you're looking for.
posted by saeculorum at 2:28 PM on May 13, 2015 [3 favorites]
This is false. The BBB doesn't actually provide any recompense (it merely files complaints which tend to result in compensation). Courts can provide recompense whether or not the company is accredited by the BBB.
Are they *really* recording those conversations, or can they legally lie to me in order to recover the debt?
This question is a bit of a misnomer - recording a conversation in no way prevents or enables them to lie to you. Their recordings would only be made available to you via a court case, so you would have to take them to court to get those recording if they did actually lie to you (and even then, the recordings might "accidentally get deleted").
Yes, debt collectors can record conversations in all states if notification is given to you (and without notification in most states). They are likely to do so in order to avoid FDCPA suits. Yes, debt collectors have been known to lie to debtors. That is illegal under the FDCPA, but no enforcement action will likely happen against the agency unless you pursue it in the court of law. No, saying that a conversation is being recorded does not obligate them to actually record the conversation, nor is it a great idea to expect them to retain that conversation if a lawsuit is not filed.
Was authorizing this company to charge my account via telephone a good idea?
No. If they renege on their agreement, than the only proof of the agreement was either lost (if the conversation wasn't recorded) or in their hands (if the conversation was made).
how can I get them to stop after the debt's paid in full?
You can sue Collector B for violating your agreement. Whether or not that is worth doing is a complicated legal question that is a function of your locale and evidence that may or not be available.
what next steps would you take to make sure you a) weren't charged beyond the exact amount owed
Close the bank account and send a letter to the debt collector revoking their ACH (automated transfer) access to the bank account.
b) that the collection note is removed from your credit report?
Wait for the written agreement they said they'd provide before providing them with your new bank account information and ACH authorization.
advice on how best to recover my credit rating in relation to this situation
This is pretty much solely a function of paying your bills, not adding more debt, and sending letters to try to get settlement agreements and/or items removed from your credit report. In my experience, CreditBoards is the best place to ask this question. Said in the best of intentions, it is full of people that don't pay their debts and don't like that fact to be on their credit report, which seems to be what you're looking for.
posted by saeculorum at 2:28 PM on May 13, 2015 [3 favorites]
I don't want you to worry more than you should, but here is a link to an advice column from Dave Ramsey about giving access to your bank account to a debt collector (and for good measure, a recording from his radio show where he gives similar advice).
I had a very small utility bill (less than $30) that went unpaid when I moved years ago (long story, totally not my fault, I swear!) and it wound up going to collections. My conversation with the debt collector who called me was wild in my opinion and they wanted electronic access to my account. I had happened to hear Dave Ramsey's podcast previously and remembered the advice so I refused and insisted on sending them a money order with a signature confirmation upon receipt. They hemmed and hawed, but it worked.
I know that this advice can't help you right now, but it might help you if this debt (or any other debt) crops up again.
posted by pinetree at 2:36 PM on May 13, 2015 [3 favorites]
I had a very small utility bill (less than $30) that went unpaid when I moved years ago (long story, totally not my fault, I swear!) and it wound up going to collections. My conversation with the debt collector who called me was wild in my opinion and they wanted electronic access to my account. I had happened to hear Dave Ramsey's podcast previously and remembered the advice so I refused and insisted on sending them a money order with a signature confirmation upon receipt. They hemmed and hawed, but it worked.
I know that this advice can't help you right now, but it might help you if this debt (or any other debt) crops up again.
posted by pinetree at 2:36 PM on May 13, 2015 [3 favorites]
In my experience with my own credit, having a couple of things go to collections and get paid off promptly has not caused me any problems. I have been able to get a mortgage and other things that require credit checks; I had a job at one point that required a credit check. It's not a good idea to let things go to collections, of course, but honestly - I assume that lots of people (like me!) find out that an unexpected medical bill or similar has been misdirected and thus not paid, or somehow slip up on something minor as you did.
As I understand it, having reasonable debt and paying on it steadily while avoiding having accounts closed is the standard way to maintain acceptable credit. For instance, having reasonable mortgage and paying it every month boosts your credit; having a credit card and paying on it every month boosts your credit.
I would not worry too much about one thing going to collections as long as the rest of your credit report is okay and as long as you've got the collections thing being paid off.
posted by Frowner at 2:38 PM on May 13, 2015
As I understand it, having reasonable debt and paying on it steadily while avoiding having accounts closed is the standard way to maintain acceptable credit. For instance, having reasonable mortgage and paying it every month boosts your credit; having a credit card and paying on it every month boosts your credit.
I would not worry too much about one thing going to collections as long as the rest of your credit report is okay and as long as you've got the collections thing being paid off.
posted by Frowner at 2:38 PM on May 13, 2015
Response by poster: Said in the best of intentions, it is full of people that don't pay their debts and don't like that fact to be on their credit report, which seems to be what you're looking for.
Respectfully, that is not what I am looking for. My primary focus when throwing that question in was improvement, not wiping my history clean.
posted by Ashen at 3:13 PM on May 13, 2015 [2 favorites]
Respectfully, that is not what I am looking for. My primary focus when throwing that question in was improvement, not wiping my history clean.
posted by Ashen at 3:13 PM on May 13, 2015 [2 favorites]
OMG
ADMIT TO NOTHING. SEND A LETTER ASKING THEM TO VERIFY THE DEBT.
I don't want to scare you, but these guys (or similar) might not even have a right to collect on this debt. They will add interest and service fees to it, tho, and they will eventually sue you in court.
Be really really careful. Contact the original credit company and see if you can pay off the debt in installments. Proceed with caution and get professional advice if you need it.
$500 of credit fraud I was unaware of turned into $12,000.00 for me. It was ugly.
posted by jbenben at 4:29 PM on May 13, 2015 [2 favorites]
ADMIT TO NOTHING. SEND A LETTER ASKING THEM TO VERIFY THE DEBT.
I don't want to scare you, but these guys (or similar) might not even have a right to collect on this debt. They will add interest and service fees to it, tho, and they will eventually sue you in court.
Be really really careful. Contact the original credit company and see if you can pay off the debt in installments. Proceed with caution and get professional advice if you need it.
$500 of credit fraud I was unaware of turned into $12,000.00 for me. It was ugly.
posted by jbenben at 4:29 PM on May 13, 2015 [2 favorites]
Lying to you is not legal, but that doesn't mean it wasn't done.
Debt collector's job is to buy up a debt for pennies on the dollar, then figure out a way to squeeze money out of the debt owe-er for MORE than he paid for it. The difference is their profit. And debt collectors frequently resells their debt to some OTHER debt collector if they don't think that debt is going to pan out. Sounds like your debt ended up going from card company to A to B.
There's a ThisAmericanLife episode, I think, that had this guy talking about his little outfit, about how sympathy rather than blustering threat yields more $$$. Or was it planet money? I forgot.
IMHO, as jbenben said, you need to find the original debt owner (i.e. credit card company) and talk to THEM and get started on a repayment plan. Don't deal with the bottomfeeders. Just call up the bank's credit card department and you want to talk to collections, give your old account number, and say you were in a bad place and now you're ready to pay back, please send any further correspondence to your current address (give it to them) and blah blah blah. And if they say they had closed your account, tell them that's why you want to talk to collections, as you would like that off your credit report. Be persistent, but polite. Eventually you'll get to someone who may be willing to reopen the account to repayment.
Good luck.
posted by kschang at 10:07 AM on May 14, 2015
Debt collector's job is to buy up a debt for pennies on the dollar, then figure out a way to squeeze money out of the debt owe-er for MORE than he paid for it. The difference is their profit. And debt collectors frequently resells their debt to some OTHER debt collector if they don't think that debt is going to pan out. Sounds like your debt ended up going from card company to A to B.
There's a ThisAmericanLife episode, I think, that had this guy talking about his little outfit, about how sympathy rather than blustering threat yields more $$$. Or was it planet money? I forgot.
IMHO, as jbenben said, you need to find the original debt owner (i.e. credit card company) and talk to THEM and get started on a repayment plan. Don't deal with the bottomfeeders. Just call up the bank's credit card department and you want to talk to collections, give your old account number, and say you were in a bad place and now you're ready to pay back, please send any further correspondence to your current address (give it to them) and blah blah blah. And if they say they had closed your account, tell them that's why you want to talk to collections, as you would like that off your credit report. Be persistent, but polite. Eventually you'll get to someone who may be willing to reopen the account to repayment.
Good luck.
posted by kschang at 10:07 AM on May 14, 2015
This thread is closed to new comments.
What? No, the BBB is a joke. It doesn't do anything more than Yelp does.
To your questions:
1. Yes, I am sure they were recording. It's to protect themselves in case of a FDCPA claim from a debtor. A debt collector cannot lie in debt collection activities pursuant to the FDCPA.
2. Not the best idea. I probably would have sent a money order.
3. Again, the BBB doesn't do anything. If a debt collector does not report the current information regarding the payment of the debt, it may be liable under the Fair Credit Reporting Act as well as relevant state law. Companies pay attention to lawsuits, not letters from the BBB.
4. I would monitor my bank account and credit report.
Recover your credit rating by paying your bills timely and not taking on too much debt. There are many guides online that talk about how to improve a credit score.
posted by Tanizaki at 2:23 PM on May 13, 2015 [3 favorites]