You’ve probably seen the credit bureau investigation results with deletions of collections at credit repair sites along with claims of “proof” of their effectiveness. Of course ANYONE who sends out a few disputes of old accounts to credit bureaus is likely to get NUMEROUS deletions.
Because collections are often reassigned or sold and many collectors do NOT update their credit reporting when they no longer have the account, ONE old account can be reported by several collectors.
The very BEST way to deal with small NEW collection accounts is to settle them BEFORE they are reported.
So when a client received the initial collection letter from a major debt buyer a few months ago, I explained that they don’t report to the credit bureaus for about 30 days and that it might be a good idea to SETTLE the account BEFORE it is reported.
PAYING reported collections will not get you a single FICO score point!
Since my client was capable of RECORDING phone calls and he had previously settled a small collection successfully, he gave it a try.
The account was for slightly over $2,000 and my client stated repeatedly that he definitely did not owe that much, but that he was willing to pay $750 to avoid having his credit destroyed.
The debt collector was OBNOXIOUS and offered a $1,500 settlement — the amount the original creditor reported to the credit bureaus until they sold the account a month earlier. So that offer was a BAD deal and my client did not settle. The debt buyer most likely paid LESS than $50 for the account.
My client then sent the written dispute, but apparently it was not received in time to prevent the reporting of this BRAND NEW collection to all three credit bureaus.
While the account was actually charged off several years ago, FICO scores rate collections by the date ASSIGNED (or opened) and a new collection destroys the FICO scores.
“Fortunately”, the collector continued to call my client and he left several messages. Even better, my client was able to upload the messages in mp3 format to his private CreditFactors forum and the collector violated the Fair Debt Collection Practices Act (FDCPA) on numerous occasions.
Additionally, the collection was reported incorrectly to the credit bureaus as an installment loan, it was NOT reported as disputed and the balance was still over $2000 and steadily increasing.
I explained to my client that he might have to sue or submit his published regulatory complaint to get deletion, but I could try to contact the collector first. My client ordered a “settlement”, provided me with a power of attorney and he didn’t even bother to dispute with the credit bureaus.
I sent a fax to the debt buyer’s legal department with a listing of FDCPA violations along with my disclosure:
I am NOT an attorney and I hope to be able to resolve this matter amicably without having to resort to regulatory complaints, publication of the [redacted] collection practices and referring my client to an attorney.
Please contact me by 3/1/10 to avoid the publication of the illegal [redacted] collection practices and the reporting to regulatory agencies.
This is “reverse” reporting — the collectors often state that they’ll report to the credit bureaus if the account isn’t paid in their initial letter and I notify them that they’ll be “published” if they don’t delete.
As usual, nobody contacted me and I was so sure that this would turn into another published regulatory complaint that I had already created the blog about this debt buyer. But when I made my courtesy call to the legal department to confirm receipt of my fax, I eventually ended up talking to a very pleasant attorney (after over half an hour of disconnects, transfers and tremendous frustration) and she agreed to delete from the credit bureaus and to close out the account.
She promptly sent the deletion fax and after I requested that they not SELL the account, she added that to her letter. She was prompt, courteous and a pleasure to deal with — unlike many other attorneys I’ve had the misfortune to encounter.
I didn’t even have to send her the links to some of my published regulatory complaints:
So I deleted the debt buyer’s blog and decided to post about it here because it’s so important that consumers understand that there are MANY ways to deal with collections and success depends at least in part on THEIR ability to document and RECORD collections calls.
While I can take screen shots of credit reporting, when it comes to collections, the RECORDINGS are often key to success.
Here is the recording of ONE of the collection calls:
As you can hear at the end of the call, the voice mail states that the call was recorded “today.” So make sure you add the DATE of the call to the file name and even better, record the call from your voice mail a few days later. MOST systems will state the DATE of the message instead of “today” or “yesterday” once the message is a couple of days old.
The call transcript:
This is [redacted] with [redacted]. I’m leaving a message for [client name]. I need you to give me a call back. I am a debt collector with [redacted].
This is an attempt to collect a debt. Any information will be used for that purpose.
All calls are monitored for quality assurance purposes.
[Client name] please give me a call at [redacted], my direct extension is [redacted]. I am available until 4 p.m. CST. I’m leaving a message for [client name] or his attorney to give me a call as soon as they receive this message. Again, the number is [redacted], extension [redacted]. Please give me a call back as soon as you receive this message.
If this is not a number for [client name] please hang up. If this is, please continue to listen but not in the presence of others, as it contains personal information.
Please [client name] give me a call at [redacted], extension [redacted].
In terms of FDCPA violations, this is actually one of the more compliant calls. The collector identifies himself as a debt collector and provides the mini Miranda (unlike in his other calls). However, he MISREPRESENTS the urgency of the call and it is hilarious that he asks third parties to hang up at the END of the call. Not to mention that you don’t need to disclose that a call is monitored when leaving a voice mail. It must have been a long day for that guy.
Of course collectors should NEVER leave messages as there is always the possibility of disclosure to 3rd parties.
It is utterly ridiculous to request that 3rd parties hang up. A collector has absolutely NO right to tell ANYONE what to do and I do NOT hang up when I get messages for other people. After all, it’s MY phone. And even if it isn’t my phone, I still have no obligation to do what some collector or robot tells me to do.
When I asked the attorney to leave a message if she was unable to reach me, she said that she could not leave a message on my voice mail due to the possibility of 3rd party disclosure.
My #1 advice to all who get collection calls: