The Collections Run Around
Have you ever paid off a bill to a creditor, or to a collections agency, only to have two or three or for or more collections agencies call you demanding payment for the same bill? Even worse, have you ever truthfully insisted that you already paid the bill, but you never saved the canceled checks, or proof of payment?
When you owe money to a creditor or business, and you send in the money just before the last deadline date, it’s often too late. It can take the business up to ten days to record your payment, and by then your account has been referred out to a collections agency. That’s where your problems begin. The original creditor quite often, fails to notify the collections agency of the payment, and when you contact the original creditor, they will tell you it is now out of their hands, and that you must talk to the collections agency. The collections agency will tell you that they will contact the original creditor for verification, but they don’t really bother.
If the first collections company can’t collect on a bill you have already paid, it will eventually get sent to a second agency, and the paid bill just keeps moving further down the line. Now, because of the failure of the original creditor to do their job responsibly and collections agencies that won’t lift the phone or fax to help you because there is no money involved, your credit is slipping further down the credit score hill to the mud puddle at the bottom.
I can’t emphasize enough how important it is for you to keep copies of all of your payments, for several years. This includes all of your money order receipts and bank checks. You should also demand a letter from the original creditor, or collections agency showing that the account has been paid off and is now closed.
Don’t trust the creditor or collections agency to notify the credit bureaus that you have paid off the account. Contact the credit agencies yourself, and send them each a copy of the letter. At www.directcomplaint.com you can do this for free by going to our free services link to each of the credit bureaus.
If a collections agency takes you to court over the payment that you have made, and you have proof, let them. This might give you grounds to sue them for damages later.
If you are not the assertive type, or if you just need help, visit www.directcomplaint.com or call 877-969-3463 for assistance.
How Bill Collectors Get Paid
In most collections companies, the collectors are paid in several different ways. The collector usually receives a base salary, between $9.00 and $20 dollars per hour. Then the collector usually receives a commission of one to three percent of all or part of the money they bring in on a monthly basis. Some companies will even offer their employees a bonus if the collector reaches a pre-set goal, or the entire office reaches their minimum monthly quota set by management.
Most collectors, are required to make at least 125 to as many as 200 calls out a day. Most collection agencies now use an automated dialer system that calls the debtor, and brings up the file on the computer screen. Usually, before the “debtor” is sent a letter or called, the collection agency has already pulled the credit report, employment history, and validated the most up to date address and phone numbers available via their national data bases, and industry designed search engines. The pre verification process, or “skip tracing” is designed to give the collector all the information available about you before they make that first call to your home or place of work.
Some collections agencies only service accounts in their own state, and have their own in-house legal department for the cases that end up going to court. Interstate collections agencies often retain attorneys licensed in each state where collections are taking place. Unfortunately, many of the attorneys who work for, or represent collections agencies show up in court with very little or in-accurate information provided to them from the collections agency. Often, the attorney doesn’t even have the authorization to offer you a settlement or workable payment plan. It’s really a big game, the attorneys get paid from $20 to $50 for each case called before the court, but they usually can’t even help resolve the collection complaint. This is more a tactic designed to scare the debtor because they are in a legal environment surrounded by people in suits. Most debtors stand a better chance of getting a settlement or low payment plan if they go before the judge or magistrate, so don’t be scared.
There are generally two types of collectors, and two types of collections agencies. There are agencies and collectors who believe in aggressively attacking and verbally abusing the debtors into a state of fear in order to get the money as quickly as possible. If you are ever faced with a collector like this, report them and their company to your states Attorney Generals office, or to the Federal Trade Commission. If you can, record the conversations. Most agencies are however beginning to use a more gentle kinder softer approach to get you to agree to pay off your “bad debt”. This is partly because states and the federal government are both clamping down on agencies who conduct bad practices and because collections agencies are finely realizing that being nice and more understanding actually does pay off.
No one wants to ever get a call or letter from a collections agency, but it will inevitably happen to most of us at least once. Collections agencies are slowly realizing that just like any other call center or internet based form of business, friendly responsible reliable customer service is what brings in the big bucks.
As a consumer, even faced with a collections company sending you nasty letters, or making friendly courtesy calls to your home or work, you do have options, and the power is still in your hands. Use it.
For more information, www.directcomplaint.com or call 877-969-3463, or e-mail us at support@directcomplaint.com
Don’t let collection agencies scare you!
I hate it when collection agencies call people and make threats, or offer payment plans that people can’t possibly keep. All too often, the collection call or letter will put fear and fright into a persons mind.
The fact is, collections agencies are suppose to adhere to specific federal and state standards, (FDCPA) Fair Dept Collections Practices Act established by the federal government, but many of them use tactics that go way beyond what the laws allow. Often, when an agency can not collect from you, the account is given to another more aggressive agency that will stop at almost nothing to get your money. In some cases, the agency calling you is a scam. They get your information from credit reports, or boxes of collection agency reports improperly discarded.
Here are a few suggestions I recommend when you are first contacted by a collection agency.
Keep an accurate record of the agency name, the callers name and ID number, and the time and date of the call or each letter you receive.
If you don’t believe the bill is yours, send them a letter or e-mail requesting all of their supporting documentation, including original credit applications if applicable. This is not only your write, but a legal requirement if requested. Remember to keep copies of any letters or e-mails you send to the agency.
If you don’t want to be called at home or at work, send them a letter, e-mail or fax to let them know. If you tell the agency in righting, they have to stop the calling.
Never, and I mean never give anyone your Social Security number, date of birth, or banking information. Ask the caller what they have for information, and only verify the accuracy. Do not correct the information if it is incorrect, just politely tell the collector it’s not accurate, but don’t ever correct it for them. Scam artists will often use the information YOU provide to gain access to your credit or banking information.
If the letter or especially the caller is threatening or rude, contact the original creditor, and file a complaint about their collection practices.
Don’t panic if they threaten or begin legal action. If you don’t owe the money, can’t make the payments they offer you, or even if the bill is not yours, and you can prove it, you stand a much better chance going in front of a judge or clerk magistrate.
If you are on a fixed income, such as Social Security, veteran’s benefits, or public assistance, offer to send the agency proof of your limited income. Federal law and the laws of some states prohibit collection agencies from using certain public or government assistance as a form of repayment.
Lastly, if you have already made payments to the original creditor, or another collection agency, offer to send proof of your payments, but only after you verify that the company is a legitimate collection agency. To do this, you can check with your states Attorney Generals office, or your states consumer protection agency.
If you need help, or an advocate to help you, you can call us at 877-969-3463, or log on to www.directcomplaint.com to fill out a Collections Complaint form in our Consumer Complaint Center, or send us an e-mail at www.support@directcomplaint.com
As a consumer, even when it comes to collections, the power is in your hands, use it.
