Monday, July 28, 2008

My Account is in Collections – But I Still Have Rights

This is a personal subject, but I have chosen to share it with you knowing that this information may someday help someone. Let me also warn you here, this will be a long post, which is the only way I can give you all the necessary background and important details. I considered breaking it into Parts and post a new part each day; but for this particular topic I feel it is best to put it all out there at once.

It is no secret to my blog readers that we are in a financial hard place. Many of our debts are in slow-pay type status, meaning the bill still gets paid, just not on time. However, this has not always been the case.

When I quit working after the birth of my son, many of my accounts went delinquent. As soon as I started working from home, I began to try to fix what had gone bad. However, it was already too late for one of my credit cards that had been charged off and sold to an apparent attorney. I tried to work with the attorney, but he wanted the entire amount “today” and refused to discuss any other options (he even suggested I take a 2nd mortgage on our home to pay it.) After some time of not hearing anything more from the attorney, the account was again sold (I believe) to a collection agency – National Enterprise Systems (NES). I have spoken with NES a few times on the phone and every time the collector on the other end has gotten “nasty” with me and I ended the call. Just recently, I experienced another of these nasty calls.

The following dialog is to the best of my recollection; however, I do not have a photographic memory, so it will not be word for word and I have omitted unimportant details. The dialog starts after NES confirming that I was on the line:

NES: I am calling about your account that is about to go to court hearing next week.
Me: I am not aware of any court hearing.
NES: We sent you a letter July 9; your account will be in court next week.
Me: Where is the court hearing?
NES: In Ohio.
Me: Am I expected to appear in court?
NES: Not at this time. The reason I am calling is because there is still time to settle out of court. You owe $x but we can settle for $x/2.
Me: That’s great savings but I don’t have $x/2.
NES: Perhaps you should ask your family.
Me: I’m not going to ask my family, they are as broke as I am.
NES: Are you saying that you refuse to ask your family and settle this debt; you would rather go to court? If it goes to court you could be held responsible for $2x including court costs and attorneys fees. The court could garnish up to 35% of your wages and if you do not have the income available you may be arrested.
Me: How long do I have?
NES: Until July 29.

At this point in the call, my heart is pounding and I feel anxiety taking over my body. I ask the lady calmly for all important information, her name and number to reach her, account number, settlement amount, etc. and tell her I will make some calls and get back with her. She informs me that I have until 3 pm eastern time that same day to contact her (I’m not sure what happened to my previous July 29 deadline.)

I have already had a bad debt proceed to legal collections. I was served a summons to appear at my local courthouse for court mediation. I appeared, and the matter was settled during mediation and did not proceed to actual hearing. Because of this, I have not only had some experience with debt collections proceeding this far, but I have also done a lot of research on debtors rights. So, after hanging up, there are a few things that stand out to me.

1) NES claimed that notice of the hearing had been sent to me. I have not been served with legal papers. I searched through my mail over the last month and found correspondence from NES postmarked on July 9; a basic “we have acquired your account of so much amount and you have 30 days to dispute the validity of the debt”. Anyone who has had a debt go to collections has seen this type of letter.

2) The court hearing is in Ohio. I do not live in Ohio. At this time, I am not sure what the laws are regarding court hearing locations, but this seemed strange to me anyway.

3) I was threatened with wage garnishment and possible arrest. I know from my previous research that collectors should not threaten debtors.

With these thoughts in mind, I go to my computer for further information on my rights. The Fair Debt Collection Practices Act (FDCPA) was created to eliminate abusive practices (and more) during collection of debts. It creates guidelines under which collectors may conduct business and defines rights of the debtor. After reviewing the FDCPA, and many pages describing debtor rights during collections, I felt sure that NES had potentially violated the FDCPA.

I next proceeded to call the Federal Trade Commission (FTC). I described the phone call to the FTC, who confirmed my suspicion that NES may have violated the FDCPA and filed a complaint. The FTC also confirmed my suspicion that any court hearing regarding the matter would be held in my state of residence. I then called my state’s Attorney General (AG), as directed by the FTC and also filed a complaint with them. The AG office told me that I could send a certified letter to NES requesting that all correspondence between us should be in writing, and that any calls from them after the request would also be in violation of FDCPA. And finally, under the direction of the AG, I filed a complaint with my state’s Office of Finance.

During my research of my rights, I learned that any debt settlement offer should be in writing, and no money should be sent to the collection agency until the debt settlement offer is in the hands of the debtor. The reason of this is because if you do not have the agreement in writing then the collector could say that there was no agreement and proceed with collecting the remaining amount. Also, the settlement should be sent to the collector in the form of a money order or bank check. This is so that the collector does not have access to your personal account information. So with this knowledge, I called back NES (about an hour after my 3 pm deadline) and asked for a debt settlement letter.

NES: Sure, what is your fax number?
Me: I do not have fax available to me.
NES: You don’t have fax anywhere that you can access?
Me: No, could you please just send it?
NES: If we send it, it will not reach you before your deadline.
Me: I’m not going to give you any money until after I have a debt settlement letter.
NES: You could postdate a check and we will send the letter. Then, if you don’t receive the letter you can cancel the check.
Me: (I am confused at this point) I’m not sending you money until I have a debt settlement letter.
NES: Are you saying you are going to let this matter go to court because you refuse to pay the settlement? We could have the letter faxed to you in 10 minutes! (The woman then proceeds to get nasty with me with a raised voice; then, in a much quieter voice.) My supervisor would like to speak to you.
NES Supervisor: I understand you are interested in settling this debt.
Me: Yes, I would like a debt settlement letter, first.
NES Supervisor: Could you provide a fax number?
Me: I do not have fax available to me.
NES Supervisor: Can’t you go to Kinkos?
Me: That costs money.
NES Supervisor: It’s only a quarter.
Me: Just mail me the debt settlement letter.
NES Supervisor: If you send it to us and provide us with a fax number we can have it to you in ten minutes.
Me: Excuse me? It sounds like you expect me to send you something before you send a debt settlement letter.
NES Supervisor: Yes, you need to post date a check before we will release the debt.
Me: I refuse to send you any money until you send me a debt settlement letter. (This is the end of this call.)

After hanging up, I call the FTC back to add this incident to my previous complaint. The FTC informs me to send a certified letter with return receipt to NES requesting that all correspondence be in writing, and a second letter requesting a debt settlement agreement to be provided to me in writing.

This is what I have done since: Remember the letter NES sent to me dated July 9, that states I have 30 days to dispute the debt? Well, the 30 days is not up yet, so I sent a letter stating that I dispute the debt and I am requesting it be validated. The collection process cannot continue until validation is sent to me; meaning they cannot sue me next week (which I think was a scare tactic lie anyway.) Even though I know this debt is valid, it is still my right to request the debt be validated; besides, what if my memory of the debt faulty and my actual debt is actually $500 less.

I also sent a letter stating that they are not to contact me via telephone and all correspondence should be in writing. Both of these letters were sent certified mail with return receipt, this is important! By sending certified mail, the document becomes submittable in court. If for some reason they do not accept the delivery, I will have that as evidence in court that they refused to work with me. If they accept the letters and violate FDCPA and do not follow through with my requests then I will have that on my side in court.

I have also prepared a letter stating that I would like to settle the debt for x amount of dollars and if they agree with the terms to send me a letter of agreement. I do not intend to send this letter until after they have followed through with my request to validate the debt. My letter looks much like this sample. In addition, this page has numerous sample letters for many things credit related.

If you or someone you know is forced to deal with an impossible collection agency, remember that you have rights, too. Consumers have the right to not be abused over the telephone (and more); do not let this happen to you or anyone you know.


Jaime said...

Wow, Amy, you're serious business! This was really interesting and helpful, and took some guts to put out there. Awesome job. I hope it gets resolved soon.

Jill said...

Bravo! Bravo! Bravo!

For your courage, patience, and clear-headedness. You are SO gonna get through this. And I'll be following your story and wishing you well all the way.


Kristen said...

Amy, you are just amazing. Imagine how many people they just scare into turning over what they do not have. You should submit this article to a newspaper/magazine, I'll bet 90% of the the American Public does not know any of this or where to go if it would happen to them.

Dana said...

I am so exhausted and stressed by reading your post! yikes!

What I think is so funny (well, not really funny) is they actually think that insulting you will get them their money!

It's like - they can have what little you have now.. or nothing. Don't let them push you around! You pay what you can when you can. You are wise to get everything in writing. Those phone calls are a waste of your time. If they call again state that you will only deal with them in writing.

You go girl! You will get through this.
You have your health and your family - after that nothing else really matters that much, eh? :)

Congrats, too, for having the guts to state all of this in your blog. Being honest with yourself (and us too) will only help you in the end.



dmoms said...

wow, i just can't believe all that! You stay strong and fight the good fight.

Sambrina's Mama said...

Wow Amy! Good for you and your research and doing something about it! I know you will get through this!!!!

Kateedyd said...

This is fantastic info!!! Thanks for posting it!

I've been in trouble for years...but unlike you, I just don't answer the phone anymore. They don't call that often anyway, I think my acct keeps getting sold off too quickly. I owe eough to make it hard for me but probably a lot less than the average person.

Congrats for not letting your debt problems be your demons! They always say that if you're too ashamed to talk about it, then you're in denial aboout it. Great Job!

CeeCee said...

Good for you for researching your rights and for taking responsibility for your debt. NES should be glad they have someone willing to work with them.