Way Off Topic: Be real careful with your family's unpaid fees.

Bmachine

Well-Known Member
Site Donor $
Site Donor $$
Messages
3,525
Reaction score
1,779
Location
Northern California coast
One of my kids was renting a dorm while in college two years ago. Upon moving out, there was an extra charge of $150 for something or other. Because mail was sent to the old address, she did not know about it. Lo and hold a year later I get a letter saying this amount was sent to a collection agency. I call them up and explain the situation. They said "Are you willing to pay the fee so we can close this account?" I said Sure but there wont be any reporting of this, right? "Oh no, we do not report for such a small amount." Today we tried refinancing our house so the bank ran a credit report. The guy calls me back and says "What's going on with this collection you had?" Uhhh, what? "The credit bureaus have taken 58 points off your FICO score because of it" WHAAAAT? He told me that this seriously affects the refi rate and that, over time, this could result in more than $10,000 of missed savings on a better interest rate we could have gotten. All of that for something I had nothing to do with... apart from being listed as the guarantor on the student apartment lease. UNREAL !

Needless to say, I called the collection agency which, conveniently enough, is closed because of east coast time. But, from what I hear it could take from 30 to 90 days for any resolution to filter down to the credit bureaus. Who knows where the rates will be at that point... Infuriating to say the least.

Moral of the story... be sure to follow up on everything that has your name on it, even simply as a guarantor for your kid's dorm room!
 

CSteve

Well-Known Member
Site Donor $$
Messages
3,765
Reaction score
1,279
Location
Bucks County, PA
Thanks for the wake up call. I am, as far as I know, only a co-signer on my daughter's 2018 Chevy Equinox. She and her husband have secure jobs, so I am not worried. At least not at 7:51 EST.

Are there people you could hire to expedite this situation. You know, like getting your kids into Stanford on the jai lai team when they can't even pronounce or spell it?

A warning for all of us.

Thanks
 

Markos

Well-Known Member
Site Donor
Messages
13,369
Reaction score
7,502
Location
Seattle, WA
I had a 9 month stint doing data work in recovery, which is collections after a 180 days. I would build the debt portfolios to sell for pennies (points) on the dollar. Places like Bear Sterns (remember them?) would buy bankruptcy and deceased debt, others would buy standard debt. Basically a closed auction.

These companies that buy two year old debt have an excel spreadsheet with an amount, name, and contact number. They have really no context for the debt, and it is their goal to collect on a small portion of the portfolio based on intimidation and harassment. They also have little in terms of skip tracing resources or tools like Lexis Nexis to find individuals. They are like the guys at the beach with metal detectors. :D

A couple of things to note. The fair credit collections act requires that they prove that you owe the debt. Now your daughters school could have easily proven. A collector at the bottom of the food chain doesn’t have the time or resources to do so. You write them a certified letter and they have 30 days to prove. If they can’t the debt is is null and void. They can’t contact you again or sell the debt. Keep in mind that the debt keeps getting resold until buyers are paying a few dollars for hundreds of names.

The other thing to know is that you can settle, even before the 180 day mark. You see it a lot with hospital debt (which I still work with), but it applies to all debt including credit cards. The older the debt, the lower the acceptable settlement.

I’ve been fortunate enough to never have collectors after me got any valid reason, but my boss was a career collections manager. She thought me many interesting things. I must say it is a creepy industry though. We were wined and dined by Bear Sterns quote a bit, so that was fun at the time.

My only run in with a collector was coincidentally while at that job. My previous cheap-ass employer said I owed them for paid time off. Since it was a satellite TV provider, I wrote the collection agency saying that I closed my TV account with a $0 balance (absolutely true). I gave them no context about my employment there. Basically sent them barking up the wrong tree and they were unable to prove that I owed the company any money.

If you have someone calling you for a relative, neighbor (bad skip tracing - especially apartments), etc. Fair Credit Collections act requires that they must give you their mailing address. You send them a cease and desist and they can’t contact you again legally via phone. They will keep calling until you write the certified letter.

Mentioning the collections act on the phone is their “awe hell” moment. :)
 

Bmachine

Well-Known Member
Site Donor $
Site Donor $$
Messages
3,525
Reaction score
1,779
Location
Northern California coast
Very interesting background info Mark. I will use that Fair Credit Reporting thing when/if I can talk to someone there. Note that in this case, I paid the “debt” off as soon as I heard about it so that is not the issue. The problem is 1) they reported it even though they said they do not and 2) they reported it under my name even though I did not have anything to do with it.
 
Top