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Paid settlement under duress. Is there any recourse?

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I settled a student loan debt from a school that i had disputed 5 times over a year and a half with the credit bureaus, that came back verified no change each time for my daughter. I really had not been persistant with her file because i thought it would just fall of in 6 months. She found a really good still on a property and they insisted she pay at the last minute 2 days before she closes escrow. I called and got them to except 40 percent, but, she really did not owe this money because the school breached there contract by going bankrupt and the bankruptcy people came in and took all there computor and everything, it was on the news.

The collection company after being told of this situation issisted that because she made a payment in 2000 this re-aged the debt. She never made a payment because she was only in the school for 3 months and the course was for 1 year. We told the lender this debt was past the SOL but, they said because it was reporting on the credit report for less then 4 years they can't take any chances of them going to court and getting a judgement and put a lien on the property. I did not tell them she was in escrow because then they would have insisted on full payment. When the agent looked at the file she even said something did not make sense and went and got her supervisor because they were showing a payment made 3 month before she started the school. Well the supervisor insisted that she must have paid to the school, but, did not have the information in front of her and said she would settle. We went back and forth until i got it to 40% but they would not take it off the credit report. I agreed after she sent me a faxed copy of the agreement and paid by check by phone, because the lender was sending a demand for payoff that same day.

I then waited until they posted the check and sent them letter explaining how they were not reporting correct information on the credit report and that i had disputed this 5 times which they admit from their entries in there computor. I told them how they extorted money from me by reporting inaccurate information on the credit bureau and that i paid under duress because i could not close my loan that i would be content if they would simply delete the acccount from my report.

Do i have a recourse or am i wasting my time because i paid and should my daughter just move on? $500.00 is a lot of money to pay someone when you did'nt get the education you paid for. Not only that she went to another school in another field that same year and we finally paid those off with settlements and deletions. This was the only thing lingering on her credit her score a year ago was 490 and 512, now it is 720 - 750 i am worried that this is going to drop her score since it is going to show paid settlement and they are reporting this as of 2000 last payment which is not true. Now it is going to show paid as of 4/12/2004 which will report for 7 more years.

In that letter i requested validation of the oringinal contract of the date she started and proof of the payment they say she paid, what bank was it deposited in? how much? and what form of payment, who was the payment paid too. and a certified affidavit that they received a payment from her and a copy of their bookkeeping entries proving this payment.

I faxed it and sent it certified return receipt.

What do you think and do we have a recourse?

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First off, just because she just paid it does not mean it gets to stay on her credit for 7 more years. You count the 7 year period by figuring out the date of the first missed payment that led to the charge off, and add 180 days -- 7 years from that date the account becomes obsolete. From my point of view, it shouldn't be on there at all, because I don't believe she owed them a dime!

You might want to consider filing suit against the collection agency for violations of the FDCPA and FCRA. I don't don't see how she owed any money at all if the school went bankrupt in the middle of her course of study. This is not a legal opinion, but why should she owe them anything at all if she did not get what she contracted with them to get? She agreed to pay them X number of dollars and they agreed to teach her something. Sounds to me like the school was in breach of contract. And it's not like they can claim that she got 3 months worth of education, so she ought to pay for it. What the hell good is that to her --- she had to start over somewhere else, didn't she? If anything, I would think the school would owe her a refund for whatever money she already paid them.

When you disputed the debt with the CRAs, how did you do it? Did you send them any documentation showing that the school had gone out of business in the middle of the course? You might have the basis for a suit against the CRAs as well, depending on how you disputed the item.

Here sre some of the violations that I see, someone else might be able to come up with others.


§ 807. False or misleading representations [15 USC 1962e]

A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

. . .

(2) The false representation of --

(A) the character, amount, or legal status of any debt . . .

and maybe this one:

8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

and maybe this one:

§ 808. Unfair practices [15 USC 1692f]

A debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section:

(1) The collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law.


§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]

. . .

(B) Duties of furnishers of information upon notice of dispute.

(1) In general. After receiving notice pursuant to section 611(a)(2) [§ 1681i] of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall

(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency pursuant to section 611(a)(2) [§ 1681i];

© report the results of the investigation to the consumer reporting agency; and

(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis.

(2) Deadline. A person shall complete all investigations, reviews, and reports required under paragraph (1) regarding information provided by the person to a consumer reporting agency, before the expiration of the period under section 611(a)(1) [§ 1681i] within which the consumer reporting agency is required to complete actions required by that section regarding that information.

© Limitation on liability. Sections 616 and 617 [§§ 1681n and 1681o] do not apply to any failure to comply with subsection (a), except as provided in section 621©(1)(B) [§ 1681s].

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I probably do tend to take things too far; and if it were me, I would be pissed that this was on my credit report at all, to say nothing of being made to pay something I didn't owe. You are probably right that it is more trouble than it's worth, but I have never been very good at forgetting stuff like this. It just plain makes me mad!

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The first time i disputed the debt is not mine, the second time, the last payment date incorrect, amount of debt incorrect. The third time i called the school and asked them do they remember the news coming in and the bankruptcy court came in and took everything in the school? They said yes. They would not provide me with any paperwork and said just dispute it with the credit bureau that they did not have her account anymore. I did not have any paper work about the closing of the school it was back in 1997. We just assumed that it was just a mistake. she was not worried about her credit at the time just being irresponsible. The last time i disputed it i told them the story of what happened and the agreed to re-investigate it came back verified no change. I left it alone because i was busy with others. Two days before closing her escrow the lender insisted it get paid because now it was reporting last payment 2001. That is when i went into mold, because they were going to send them a demand for pay off for$1,200 something. I told them to give me 2 hours to straighten it out before they fax over a demand for payoff.

These new last payment dates were not on the other reports. The date last paid was 1998 that was incorrect but, the bureau said they verified it.

When i say i disputed 5 times i mean that the collection company told me" i see you disputed this 5 times and we did not take it off and it is not going to come off until you pay"" i said yes you re-aged it, and that is a serious violation" They insisted she made a payment 2001 which i did'nt have time to keep at it. I disputed 3 times with all three bureaus. I do have the copies of the report.

I have faxed and mailed CMMM them a request for validation so i can correct her credit report because it is inaccurate. I wish i had known about validation and verification when i first disputed over a year ago.

The name of the collection company is Portifolio Services Association also known as PSA. The school was Computor Learning Center on Wilshire they are back opened. they never sent a letter telling the students they could come back or anything.

Just also want to shout out to people ask for validation for everything if you feel it is not correct on your report so this does not happen to you at the last minute!

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Well my friends just an update, got a letter in the mail from Porfolio Recovery Associates.

I am writiing in response to you letter dated April 12, 2002. We just received this fax, so i presume the date you listed is merely a typographical error.

Portfolio recovery Associates, LLC has closed the account referenced above. One of PRA's representatives has contacted the three major credit reporting agencies and requested that each agency remove PRA's trade line from your credit reports.. Enclosed please find a copy of the Universal Data Form that was filed electronically with the credit reporting agencies for this account. Please review this for accuracy and contact me immediately if any of the information on this form needs to be updated. Please allow up to 90 days for each of the agencies to update their records accordingly.

Your request for a refund is currently being processed. Please expect to receive your refund check in the amount of $500 in approximately 3 weeks.

Associate General Counsel

They have already deleted the account from Experian

So, people even if you pay under duress get them to except the payment and then ask for validation if you are in a bind like we were. Validation works. Don't back down!

Thanks everyone for your imput!

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