I never cease to be amazed by the outright lies of collecton agencies and the creditors they represent. Recently I discussed how do deal with a collection agency with a certain reader. She was trying to settle a debt for her daughter and I gave her some advice about how to conduct the debt settlement to insure that it would stay behind them for good. You can read this back and forth discussion by clicking here. Feel free to leave questions or comments at the end of this article.
Luckily she got everything in writing. Now here we are a month later and just as I suspected the original creditor sent her a bill for the remainder of the debt. She correctly handled this situation by following a few important steps.
1) She contacted the original creditor to insure that the collection agency legally represented them (the creditor).
2) She documented the names and positions of the representatives and supervisors with whom she spoke to on the phone (original creditor).
3) She requested that the collection agency fax her a statement saying that this settled amount would 100% satisfy this debt and that the loan would be reported as ‘paid in full’ to credit reporting bureaus.
4) She then called the original creditor to insure that they agreed to these terms and documented the phone call with their names, their positions, their supervisor’s name, and date of conversation.
Now a month later, despite having a letter and documented phone conversations, she sends me the following email:
Hi Barry, It’s me again. Guess what? Yesterday my daughter received a bill from the credit card company for the balance of the debt that supposedly was closed and settled. I have the names of the people that we spoke to at the CC co. back in May saying that the collection agency we were dealing with was authorized to offer us a settlement for them. I also have the letter stating that the account was closed and paid in full. Now what? Thanks
My advice to her was to contact the credit card company and inform them that they have made a mistake. Obviously they have simply made an accounting error which led to this miscalculation on their part. I would then stay on the phone with them until this matter was settled. She’ll probably have to end up faxing them the very letter that they agreed to honor just a month earlier. Bear in mind this is no small credit card company, this is Chase Bank. Luckily she got this agreement in writing. And since she documented the phone calls (where they stated they agreed to the terms that the collection agency put forth on their behalf) she should be able to force them to honor the contract to which they agreed.
However, before this matter is behind them she may very well have to hire a lawyer to force them to honor a contract that they produced. Or this credit card company may sell this ‘outstanding debt’ to another collection agency for pennies on the dollar. The faster she forces their hand the better….
**Update
After having to mail the copies of their settlement agreement to Chase Bank… twice - it appears this affair is over. Chase mailed her a letter stating the account had been settled. So, for now, the matter appears to be closed.
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BB,
Good Info you provide us….
I have a question …. when you said the colecction agencies have to send something in writing you mean it is a letter or it can be an e-mail or fax???
other thing when I send my money after I received a settlement in full letter do I have to send a money order or a cahier check is ok too???? Cashier check can be tracked so ytou can know when it was cashed by the collection agency
Thanks
A fax would work, so long as it’s signed by collection manager.
Cashier’s check is alright as well.
Thank you but I am afraid that if I ask them to validate my debt at this point this might piss them off and then decided to go after all the loans as a whole or even go ahead and sue me. Secondly, should I just ask them to put the settlement contract or agreement in writing and ask them to mail or fax it and exactly what should I asked in the letter. Their signature and what else apart from the agreement itself?
I have a question, whatever this collection law officer get from me, are they going to pay bank of America back any percentage of it or everything belongs to them? I want to know if any money for them will be better than no money or if they can reduce my settlemet to 1k instead of 2k?
Thanks
In their settlement letter you want an explanation of the total amount to be paid, number of months etc, and that this letter states that this payment 100% satisfies this debt obligation. You also want the letter to indicate how it will be reported to the credit bureau. Or if you don’t care about how its reported, don’t ask them to put it in the letter. Make sure the letter is signed by their collection manager and never loose it. Also, and this is very important, the settlement letter should state who the original creditor was and when the account was opened. This way, if someone tries to collect on this debt later on you will have documentation showing that its been 100% satisfied.
And i would send a cashiers check or money order and mail it registered with return receipt mail. But if you’ve already given them you checking account info, which you shouldn’t have, then it really won’t matter.
Thank you very much, I know better not to give them my bank account info especially after reading all these posts and what these people have done to others. I know for a fact that they will insist on having my bank account info but I will not conform to that demand.
Is it still possible for me to negotiate the settlement down and if this is yes, please what is the best possible way to go about this?
The situation at hand now or better yet the verbal agreement over the phone is that my uncle will given me a 1k on this Friday and the lady said if i paid $500, the next following month and then $500 another following month then that will settle the debt. However, the truth to the matter is that My uncle did not promise me anything but I was hoping that they will say ok and just settle for that but instead they ad additional 1k to that, making it 2k, with $500 monthly payment plan.
I would like to settle for a grand which i know i can rally around and pay off now rather this monthly $500which there is possible that i might not able to keep due to my other expense commitment.
Well I would come up with the money first. Then I would call them and tell them I can settle for $1,000. If they will accept that as payment in full, put that in writing and fax it to you, then you will mail them out a money order next day air. This way they get their money the following day and they still don’t have your checking account information. And despite what they may tell you…. yes they can do this.
Thanks Debt Prison, I would try this approach first thing monday morning and will definately keep you posted.
Thanks
THANK YOU FOR ALL THIS INFORMATION…I’M GLAD I FOUND THIS SITE.
MY QUESTION IS : SHOULD I REQUEST A DEBT VALIDATION LETTER, SOON I RECEIVED THE FIRST LETTER FROM THE COLLECTION AGENCY , WHO INFORMED ME THAT ,NOW MY ACCOUNT HAS BEEN PLACED WITH THEM AND I HAVE TO SEND ALL THE AMOUNT TO THE ORIGINAL CREDITOR? (SOUND WIRED ) OR SHOULD I IGNORE IT… I WOULD LIKE TO MAKE A SETTLEMENT LATER ON BUT IN MY FAVOR( I DON’T KNOW HOW LATE…I’M AFFRAID TO SHOW UP IN THE COURT )
HOW SHOULD I DO IT RIGHT ? THANK YOU
If you cannot make any payments at this time then you can ignore it. If you call them and you don’t know your rights, they can lie to you and get you to promise stuff that you can’t pay. You can request validation of the debt if you want but I don’t think it will make much of a difference this early on.
i have an ongoing issue. i got t credit card from chase in 2000 or 2001 not really sure, but due to financial difficulties in 2003 i was unable to continue making payments I told the company to close the account but they kept charging all kinds of late fees despite the fact that they knew i was going through financial difficulty.
I had gotten correspondences and phone calls from the collection agency (not certified- just regular mail) but i never communicated with them.
They recently sent me a Petition with a discovery attached, including request for disclosure and admission.
My question is this, how do i respond to this. Is it okay for me to respond to the court by request for a validaton of debt from the lawyer of the plantiff, wait for their response before attempting to reply their discovery , request for disclosure and admission or is it too late for that?
Does validation of debt request legally cover me if i do not respond to the discovery, request for disclosure and admission?
Thank you in advance
I realize my last question was not clear.
What i am trying to say is if i do not respond to all their request for discover and disclosure and admission can they still get a judgement in default?
Well you need to determine whether or not you are being sued, or have they already sued you. If they haven’t sued you at this time you should be able to request validation of the debt via certified mail. I would also request the attorney produce a copy of the original contract indicating that ever entered into any legally binding agreement with his client.
Hey Angel,
You could also contact the court, act stupid, and ask what all this paperwork from the attorney means. See what they say.
Hello,
I was promised by the collection rep that if i pay my debt immediately my credit file will not be reported.
I learned a few days ago that they reported my credit file.
What can I do?
Hey Didi,
Well you have to get anything they say in writing or it’s meaningless. However, you could contact the credit bureau and file a dispute. Go to google and type in “equifax dispute page” and the same for the other two and see what you can do.