The Consumerist is reporting a reader received an offer from the debt collector who is offering “debt reduction” in the form of a pre-approved Visa card in which his $1,364 debt would be reduced to a $1,200 balance if he accepts the card. He would need only to to pay off the balance under the terms of the credit card to eliminate his debt. You can see a picture of the offer here.
The current paper holder on this debt is none other than one of the biggest offenders in the business….LVNV funding. The credit card offeror is Resurgent Capital Services, LLC, a subsidary of Sherman Financial, which also owns LVNV. If you want to see some consumer complaints about this company, here are numerous complaints on the website the Ripoff Report. The BBB reports over 497 Billing or Collection Issues for this company.
Even if this company had less people complaining about it, would this offer be a good idea? Nope. The Consumerist analyzed the terms and found some pretty frightening aspects:
- According to the terms, your first minimum payment is $37 which is due 20 days after you receive your statement. If you don’t pay in time there is a $19 late fee.
- This card is designed to make you spend over your credit limit. Your balance starts at $1,220 and the credit limit is $1,270. Considering your interest would be about $20 dollars a month at 19.9%, a small purchase could easily put you over your limit, incurring an additional $19 fee.
- According to the terms, if you miss a payment in the first 3 billing cycles, the card will be revoked and your original debt of $1,364 will be reinstated even if you have paid off some of the balance already.
Has anyone received an offer like this from a collector? Post a comment!
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4 responses so far ↓
1 harison // Jul 10, 2008 at 8:29 am
using credit card is like having poison in our pocket i dont like to use credit card
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harison
Credit Card Debt
2 Kristy // Jul 10, 2008 at 11:54 am
You just have to have self-control with credit cards.
3 KentWA // Jul 10, 2008 at 3:41 pm
This is even more insidious than that, most all of these are SOL debts. The second you sign their agreement the debt is rolled into a brand new account. You give up your right to verification and they can sue you for a debt they could not before.
I have received a few of these on Zombie debts from an identity theft that occurred over 10 years ago. In each case they looked like regular credit card offers and an unsuspecting consumer could be tricked into thinking they are being offered a valid credit offer.
4 rachel // Sep 5, 2008 at 5:08 am
we are currently suing this collection agency, when recieved notice about debt, asked for verification, company did not comply, attempted to coerce payment by the offering of rolling over debt to a credit card, according to the fdcpa if ask for verification of the debt collection agency cant contact you again until debt has been verified, Company did not respond in LVNV they sent offer in resurgent capital name which makes them in violation of fdcpa( fair dept collections practices act) in addition too, when the credit card was not offered. lvnv filed suit against us, which is a nother violation of consumer rights, ” collection agency can not call, write, send offers, or file suit,if debt has not been verified. they also filed a suit with no attachment of the bill, contract, or anything with our name on it. they have many judgments against people all around the world for debts that are not valid debts, they are debt purchasers and do not have proper and correct information about any debts they are collecting on and its against the law, to pursue a person in this manner, trickery bribery, and corecement of money, beware, some are well informed, and we intend to let the public know as well. beware!!
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