Credit Check Collection Agency
Q: I have a $94 debt that has gone to a collection agency. This item has shown up on my credit report. I was not aware (or forgot about) this debt until this week. I will be happy to pay the $94 IF I can get this item removed from my credit report. Can I make a deal with the collection agency where they guarntee to clean my credit reports of this item if I pay the collection agency in full? How should I go about such an arrangement? Should I get something in writing from them?
A: I'm sure there are a few ethical collection agencies out there, but for the most part they seem to be bottom feeders, even slimier than whichever political party(s) you oppose. Among the tactics used by collection agencies: . Tacking on "interest" and "service charges" that are not part of the original agreement. . Making trouble for people by calling them at work, in violation of the FDCPA. . Calling people at all hours of the night and with excessive frequency, again in violation of the FDCPA. . Reporting a debt to the CRAs (credit bureaus) as "current" when it is in fact no longer legally collectible (beyond the Statute of Limitation) or even when it is older than the 7 years that an unpaid debt can stay on your credit report. . Threatening to do things they aren't allowed to do by law. For example, threatening to garnishee somebody's wages when they don't have a judgement, or to send a cop out to arrest them for not paying (as if the cops had nothing better to do than arrest people for something that isn't even a crime). . Out and out lies. I don't mean the ordinary lies that any detective, skip tracer, or cop will use to get information ("This is Joe Jones of Frackman, Frackman and Jones. We have an uncollected legacy for Phil Patman, do you have any idea how we might contact him?") I mean claiming that Phil is in the hospital and needs emergency surgery, but they need somebody to come down and make a deposit against the medical bills. Back in the 80s my wife's purse was stolen, including her checkbook and ID. Somebody forged a bunch of checks. Most of the people who got stuck(*) were willing to eat their losses when I called them and told them they had taken a forged check. A couple wanted her to fill out an affadavit of forgery. But one had turned the check over to a collection agency. They kept writing and calling even after I explained that they didn't have a valid debt and my wife sent them the affadavit of forgery. Finally she told me I could take the muzzle off. I called them up, demanded the name of the person who answered the phone, the person I talked to next, the manager, etc. I told them I was going to sue them all into bankruptcy if they didn't stop bothering us. They told me the debt was "in the computer" and they couldn't do anything about it. I offered to fix the problem for $200/hour. (I'm a computer programmer, but I do R&D, not business, and my salary at the time was more like $35/hour, but if you're going to hit them, hit them hard.) They went away. (*) Apparently cashiers can't tell the difference between a 4'10" overweight white woman and a slim, 5'6" black woman presenting the 4'10" woman's ID. There is virtually nothing collection agencies won't do to get money out of people. It doesn't matter if the debt is valid. It doesn't matter if they have the wrong person (same last name but different first name, somebody who used to live at that address but doesn't any more, somebody who _never_ lived at that address but they somehow got it out of some database). They will keep going until you take effective legal means to stop them. They are one small step up from mob types that will break somebody's leg if they don't pay. Nonetheless, Clark's advice isn't always practical. Sometimes it may be easier to pay the collection agency. Some creditors just won't talk to you after they've turned the debt over to collection. If you pay the collection agency, remember that they bought the debt for pennies on the dollar. So _anything_ they get from you is profit. Use that as a negotiating position. You can offer them half, or less. Or if you prefer you can offer to pay the entire _original_ debt (no "collection fees", "service charges" etc.) in return for them taking it off all the records. But _never_ admit that you owe the debt. That will start the clock over on the Statute of Limitations and make it easier for them to go after you in court, if they think it's worth the trouble. The line you should take is, "I don't admit this debt is valid, but I'm willing to pay $x to settle this matter." Or, "... but I will pay $Y (the original debt) if you agree, _in writing_ to remove all record of the debt being in collection or past due, and not to verify it when I dispute it with the CRAs." If you take the latter course, get a signed agreement from them before you send them any money. It should include their agreement to not report or verify the debt as past due or in collection, but it should NOT contain an admission that you actually owe the debt. Once you're satisfied, go ahead and pay. Then pull up your credit report from all 3 major CRAs, and dispute it with any that show the debt as "past due" or "collection". And then check again 60 days later! If the debt is substantial, pay a lawyer to draft the agreement, maybe with a "liquidated damages" clause to cover the case where they continue to report/verify the debt after you pay them. .
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