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Capitol One Re; charge off


donnak
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Capitol One sent me a letter:

Re; Your charges off account xxxxxxxxxxxxx with Discover

According to our records this charged off debt should no longer appear on your credit report, however Capitol One will give you the opportunity to demonstrate your creditworthiness. Plus when your new account is opened all recovery activities will stop. However if you fail to make a payment to capitol one in the first three billing cycles your card will be cancled and your charged off account will be returned to TWA.

Are these people stupid or what? I guess they think I am!!

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I just got a similar letter from Capital One. It is in reference to a charge off that just dropped off my credit reports last month (SOL and DOLA passed). It says this:

Guaranteed Approval Vsa credit card!

Cap One recently purchased your above referenced account. Cap One has guaranteed your approval for an unsecured Visa with a 9.9% APR until 2006 and a 0% APR on your charged off debt, plus no annual fee.

Blah...blah...blah...when you accept this offer your charged off account balance of $323 will be transferred into your new Cap One account. Your account will have an initial credit limit of $1 (woohoo!) that will increase to $50 after your first payment. Then, for every $100 of charged-off debt you repay, you'll receive a $25 credit limit increase up to a maximum of $200.

Why would they buy a debt that they can't even collect? I guess people who are desparate for a credit card might go for it.

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From what I understand, this is a new angle in getting consumers to pay old CO's. I can only assume their purpose is that by offering as they do, a fair percentage of consumers, mainly those who suffered a Medical Emergency, a Layoff, or some other tragedy, and, in the past, was never late, will look at it as another opportunity to prove they are creditworthy and jump on the bandwagon. We can all agree that Crap1 has either purchased these old accounts at pennies on the dollar, or, they are working in unison with another lender to generate income by using old CO's to accomplish this. I am not totally against it, if the consumer involved is one similar to what I was referring to and needs this to better themselves and their families. But, if this could cause a problem in the long run, then do not accept the offer, especially if timebarred and not being reported on the CR.

One must also remember that upon accepting the offer by signing the papers, the account will automatically be reaged. If the amount owed is a small amount, such as the amount mentioned earlier, then I see no problem accepting this, just for the sole purpose of regaining a positive TL. Therefore, once PIF, the account is closed. In short, accept and pay off without using available credit, or, maybe buy one tank of gas a month so the amount charged is paid each month by adding the tank of gas to the amount being paid to reach the Zero balance.

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I had the same thing sent to me.

"Arrow has purchased your charged off account, and Capital one is offering you a new way to re-establish your credit." I thought I did that!

Mines timebarred also.

How are they getting these accounts when they aren't on the credit reports anymore?

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If I remember right, the OC's offer a package deal to whoever. It may contain 1000 CO'd accounts and the cost is maybe $.04 on the dollar. ADUB #1 comes along and buys the accounts, then either goes after them themselves or makes arrangements with the OC for a percentage of all who agree to the offer. I'm not sure if this is true, but, who knows exactly what has transpired.

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