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OT-? about credit card settlement

Old 01-17-2009, 08:18 AM
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OT-? about credit card settlement

My daughter received a settlement letter from one of her credit card collection agencies. The debt was for $720 but they agreed to settle for $511. She contacted the company and told them that she could not pay it all at once but would they agree to monthly payments. They agreed and said that they would record the conversation. She agreed to let them have four of her bank checks and they agreed to take out of her account the money. She made an initial payment of $250. They said they will take an additional payment of $100 this month, $100 next month and the remainder in March. They also agreed to send her a letter for her files stating this is what they will do. This was over 2 weeks ago and repeated calls to the collections agency have gone unanswered. The agency has only taken $250 so far but she is afraid that since they still have a hold on 3 of her checks that they might try to take the money out earlier than agreed on or they will take the full amount that is owed. Right now she is only keeping enough in her account to cover their agreement. She is paying her other bills in cash or with money orders. I know that she made a mistake by giving them her checking account info, but I told her to just watch her bank account for now. She has online checking. Have any of you dealt with this before. I know some collections are unscrupulous but maybe this one will do as they say. The unanswered phone calls have her worried. Thanks for any info, Marle
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Old 01-17-2009, 08:44 AM
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I know that debt is sold, pennies on the dollar, to collection agencies. The collection agency is then in a position to negotiate the debt and turn a profit on the transaction. That's their business model.

I am not sure that paying the collection agency does anything positive for the debtor's credit score. Given the bigger economic picture, laws and FICO score computations are changing daily to encourage debtors to settle. So what was, is apt to change ( for the better) going forward.

I am assuming they sent your daughter a form letter to sign authorizing the debits. The fine print may or may not contain language about their ability to also debit a collection or transaction fee. The devil is always in the details.

The whole deal makes me uncomfortable. Google the name of the collection agency/address and " scam" and see what comes up.
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Old 01-17-2009, 08:54 AM
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I would watch the acct or maybe even call the bank and tell them you don't want things taken out. AH signed up his bank acct to make 1 payment only and they've taken the $ out for the last two months unauthorized. He's had overdrafts and a huge mess because of it. He ended up switching accounts and opening up a new one to stop it.
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Old 01-17-2009, 09:24 AM
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.......Bad news......

Even Before all money problems created by my AH.
I NEVER GIVE OUT MY INFO FOR PRE AUTHORIZED PAYMENTS.....
I did once a long time ago......what a nightmare.....they kept on taking money, at the wrong times, I got so messed up, I never knew what they were going to take out etc...
(.....hey kinda like my AH ......hee hee)
(I dont trust anyone with the info.....wish I had applied that distrust to my husband...)
My debt problems now are so huge I'm most likely going to declare bankrupcy...
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Old 01-17-2009, 09:30 AM
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I told her to close that account once things have been settled with them and to never give out info again. To pay all her debts with money orders and to get it in writing before she makes a payment. But hindsight is 20/20 and she is trying to do this herself. She never received an agreement from them. She gave them her check info. I think that we will make a trip to the bank, let them know what is happening and see if she can open a different account with them and only leave enough money in the other account to cover what she still owes the collections company. I might tell her to call the FTC and tell them her story too so that she has it on file with them in case the collections company tries to take more out than what was agreed to. I have googled that company and there were a few complaints but overall they seem to be one of the better ones. We shall see. Hugs, Marle
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Old 01-17-2009, 09:37 AM
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If it was me and I was your daughter, I would pay off the debt and close the account. From my experience with banks and computers, it never seems to be a good mix. Most people will go by what the computer says, and not think much further then that.
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Old 01-17-2009, 09:44 AM
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One other thing that I did tell my daughter was to leave a phone message with the company telling them that if she does not receive their agreement within a week that she would be contacting the FTC and filing a complaint. I know that that worked for me when they were calling here trying to find her last year. I filed a complaint against all the companies that were calling me and I never heard from them again. I have read that they do not like to deal with the FTC. Hugs, Marle
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Old 01-17-2009, 09:53 AM
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Marle,

Did your daughter provide her own bank with instructions to debit her account?
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Old 01-17-2009, 11:38 AM
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Not yet. I told her to take care of that on Monday. But she still wants the agreement in hand so that she can show the bank. Marle
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Old 01-17-2009, 09:18 PM
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Marle, My daughter had a similar situation in paying off a debt. I don't know if she ever tried to contact them after the agreement was reached, but I do know she worked out a deal, gave her account info and had monthly payments deducted. It did work out - They just deducted what was agreed to and then it ended. It was one of those things I didn't know about until it was over (thankfully) She didn't think about worrying about someone having her info. Fortunately it worked out okay. I hope it does for your Megan too. It's really great that she is cleaning up her debts - I suspect HP is watching over her and it will work out just fine.
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Old 01-18-2009, 06:24 AM
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Greet, You are right. Her HP is watching over her. Thanks, Marle
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Old 01-18-2009, 06:53 AM
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Just my two cents here...but definitely talk to the bank and explain the situation. Also, I would send a certified letter to the collection company demanding a written explanation. Check out Dave Ramsey's Financial Peace (google it), and Greenpath Debt Solutions.
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Old 01-18-2009, 07:37 AM
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FullDresser, My daughter did visit Greenpath in Saginaw over Christmas vacation. They advised her to pay off the credit cards first as they are still charging her interest and late fees even though the credit card holder has already charged off the debt. She was offered the settlement with one of her two cards so she decided to pay that one off first. Greenpath advised her to not consolidate her debts because she only has about $4000 left to pay. Hugs, Marle
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Old 01-18-2009, 11:07 AM
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Originally Posted by marle View Post
Not yet. I told her to take care of that on Monday. But she still wants the agreement in hand so that she can show the bank. Marle
It's curious that her bank is allowing her account to be debited without documentation, from her, authorizing the collection agency to do so.
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Old 01-18-2009, 11:21 AM
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Out, She gave them her check numbers so I think that it is the same as when you use a check at Walmart and they take it from your account but give you back your check. She has viewed the check online and it is made out to the collection agency so it must be legal. But she will be visiting the bank tomorrow just to make sure that they know what the agreement was and to make sure that no more is taken out than what was agreed upon. So far it seems to be okay, but I told her to make sure that she checks her account daily online just to be sure. Hugs, Marle
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