Trying to collect on a settled account

[Corrine]

Okay, here's the problem. Last year I settled a debt. The original debt was for $1,413.69. Van Ru called last year and said I could liquidate the account for $814.00 which I agreed to. They sent me a letter which states:

RE: Total Card

Acct Number: 4809****

VR Acct Number: 2242****

Current Balance: $1,413.69

Dear Mr. Smith

This letter is intended to verify that we have been authorized to accept a settlement in full in the amount of $814.00 for the above referenced account(s). Upon clearance of your payment, this account will be settled in full. This settlement amount is valid until March 28, 2004.....

The check came out of my account on March 24, 2004 for the full amount so I fulfilled my part of the agreement. Then I got a letter from Van Ru after they cashed the check that stated:

Dear Mr. Smith,

Your check in payment toward the above referenced debt has been received.

This check will be deposited by us on it's due date and your payment will be credited against the balance owing on your account...

I received the second letter after the check had been cashed. To me, it was as if they had changed the terms of our agreement after the deal was done. I called immediately about the inconsistancies of the two letters and I was assured it was an error and that the account read as resolved in full. A few months later I pulled my credit report and found that a new collection agency (not Van Ru) was claiming there was a $599.69 account in collection. I sent a letter to the agency in question stating the account had been settled and then disputed the account through Credco. The creditor didn't verify the debt so I thought the issue was resolved.

In October I attempted to get a house loan. Again, the debt showed up through the same company. I gave the loan officer my proof that the account was paid and she said she would help me dispute the account again which we did. The loan fell through (property wouldn't appraise... nothing to do with this account). I am getting ready to go to the bank next month with my new estimates for building a house. I get a letter yesterday from yet another collection agency stating:

Dear Mr. Smith,

You still have a choice. Our Client, Total Card, has extended every possible courtesy to you to pay this seriously past due account of $599.69. To date, you have apparently chosen to ignore your obligation. That choice was yours. In response our client has had to make a choice, and they have chosen to place your account with us, a third party debt collection agency, due to your non-payment.

We hope that you realize that this is a very serious matter. Please do not make legal efforts necessary. The entire balance is due in full. If you do not have the entire amount it is your responsibilty to explore possible funding options through family, friends and/or untapped assets to retire this debt in it's entirety. You need to pay the balance in full now....

What exactly are my options at this point? I know disputing it is one obvious option but this would be my third time and I'm getting fed up at this point. And I'm goint to blow a nut if this shows up on my credit report next month.

[willingtocope]

Ouch...unfortunately, this is the way the game is played. I'm not familliar with Van Ru but I assume they're a CA. CA's make their money by lying and intimidating and trying to circumvent the laws. Once you pay a CA, they smell money in the water and will continue to try get even more from you.

The only way you MIGHT put a stop to it is sue. I say "might" because you never know with these jerks. If you can afford a lawyer, talk with one about your options. If not, then look at the "Sue Creditors" menu item at the top of the page for guidance. I'm not a lawyer, but IMHO you got a pretty good case against Van Ru for selling the balance of your debt.

[divemedic]

To start with, tell us what state you are in.

[Corrine]

I'm in Pennsylvania.

I don't know how collections work. I assumed Van Ru was working on behalf of the original creditor to collect the debt because they said they had been authorized to accept $814 to settle the debt for their client. I figure the creditor was happy to get the money and then found another agency to go after the remaining balance even though the deal was $814 to resolve the entire debt. Here is the letter this agency sent to me:

Dear Mr. Smith,

You still have a choice. Our client, TOTL CARD 2NDS-VISA/CRDT STORE, has extended every possible courtesy to you to pay this seriously past due account of $599.69. To date, you have apparently chosen to ignore your obligation. That choice is yours. In response our client has had to make a choice, and they have chosen to place your account with us, a third party debt collection agency, due to your non-payment.

We hope that you realize that this is a very serious matter. Please do not make further legal efforts necessary. The entire balance is due in full. If you do not have the entire amount it is your responsibility to explore possible funding options through family, friends and/or untapped assets to retire this debt in it's entirety. You need to pay the balance in full now or contact us.

Jane Doe

1-866-***-****

This communication is from a debt collector. This is an attempt to collect a debt and any information obtained will be used for that purpose.

Unless you notify this office within thirty days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume the debt is valid. If you so notify this office in writing within 30 days from receiving this this notice that you dispute the validity of this debt or any portion thereof, this office will: obtain verification of the debt or obtain a copy of a judgment, if any, and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

I called the agency, who was more than willing to discuss the debt with me right up until I told him that I had proof the debt was paid and that further collection attempts on their part was illegal. Suddenly he said he would no longer speak with me and would only discuss the matter with my husband. So I am mailing this letter in response:

February 18, 2005

RE: 4809****

Account Number: ****-***

J.C. Christensen & Associates, Inc.,

You still have a choice. You can inform your client, TOTL CARD 2NDS-VISA/CRDT STORE that this “seriously past due” debt has been settled in full in the amount of $814.00 on March 24, 2004. To date, this is the third seriously illegal attempt to collect on a debt that has been resolved yet your client has apparently chosen to ignore his obligations to cease collection efforts and report this debt as paid to all credit reporting agencies. That choice was theirs. In response, they have hired you to continue their illegal activity.

I hope you realize that this is a very serious matter. Please do not make legal efforts necessary as I am more than willing to report you and your client to the Attorney General if any further collection efforts are made regarding this account. The entire account has been settled. If you and your client chose to ignore your obligations to stop attempting to collect on a settled debt you may have to explore possible funding options through family, friends and/or untapped assets to retire a judgment I will seek against you and your client. You need to resolve this issue with your client immediately or contact me if you have any further questions.

Mrs. Smith

(***) ***-****

Address here

This communication is from a consumer. This is an attempt to make a creditor comply with the law and any information obtained will be used for that purpose. I have enclosed all valid documents of the agreement entered into to resolve this account and my Power of Attorney to handle all financial issues regarding this consumer, Robert McAndrew as per your request. At this time I am also requesting that you verify the validity of the debt, provide me with proof of such debt by mail and that you provide me with the name and address of the original creditor and the current creditor, if different.

Unless you notify me within thirty (30) days after receiving this notice that you dispute the validity of this resolved account or any portion thereof, I will assume the situation has been resolved and that this account will be correctly reported to all credit reporting agencies as a paid account with no outstanding balance. I will be pulling my credit report in March 2005 and if this debt is reported as anything other than a paid account I will seek all legal remedies afforded to me against you and your client.

Thank you for your time in this matter,

Mrs. Smith

Now normally I wouldn't write a letter like this but I am literally at my wits end with this creditor and the rude person I spoke to on the phone today. Should I add anything to this letter?

[willingtocope]

I like the tone of your letter...always nice to throw their BS back at them.

but...

I think what's happened is your debt is now with a Junk Debt Buyer (JDB). The original creditor is probably no longer involved. So you need to word this a little differently. There is some case law (you'll have to search for it...I can't put my finger on it right now) that says that an OC can be held responsible for the actions of its CA. If the orignal CA was working FOR the OC...on assignment, not purchased the debt...then you might get some resolution by sending a letter to the OC saying "...we settled this. Your CA sold the balance. I'll be happy to include you in my suit for breach of contract if you, Mr. OC, don't put a stop to this..."

[willingtocope]

Oh..and by the way...NEVER talk with a CA on the phone. Their business depends on lying and intimidation and you'll never get a straight answer. Always do it in writing.

[Corrine]

How do you know if the agency is working for the original creditor or not? All the letters I have say they are working on behalf of their client which I assume is the original creditor.

[willingtocope]

Yeah..."our client" is all part of the game. At first, the client may indeed be the OC but after the account is charged off or partially settled "our client" becomes a collection agency that another agency (or lawyer) is working for...or sometimes "our client" is the guy who sits at the other desk. The point is their words are never to be taken at face value...they are always trying to confuse and intimidate.

You may find some reference on one of your credit reports. Sometimes the OC will report "charged off" or "settled for less than full amount" with the note that the account was "sold to another lender".

My suggestion is...I think it all depends on how much time you want to spend on this. If you follow through with the DV process and sue the latest CA for violations of the FDCPA, you might make a couple thousand dollars off this. On the other hand, if you just want it fixed...send a letter to the OC, include copies of the agreement and all the other letters you've received and tell them they have 30 days to fix it, or you'll sue.

[Corrine]

I really have no intention of suing. I just want the matter corrected. But I'm really confused now. I thought when we settled the matter the deal was I pay the $814 and they simply forgive the remaining balance. I didn't know the deal was that the remaining balance would then be sold to another creditor. Assuming that's what Van Ru did, what type of letter would I want to send to them?

[retmar]

I love the letter!

The only things I would change are as follows:

1. Do not, for any reason, send them a POA. There is no law that says

you have to, so their request that you do, is BS.

2. Give them only 10 days to respond, in writing, that the account is

closed, ALL TL's have been deleted from ALL CRA's, and that the debt

will not be sold, transferred, or reassigned, to anyone.

3. Failure to comply will result in your retaining an Attorney of your

choice to pursue any and all avenues available to you to assure this

matter is settled amicably. Assure them that the proper complaints

are being filed with your AG, their AG, FTC, and any and all other

agencies that govern CA's. By this you will add at the bottom left of

the letter:

CC: FTC

Address

AG (Yours)

Address

AG (Theirs)

etc., etc.

All you need to enclose in your letter is a copy of the agreement and a copy of the check, both sides. Nothing else. Send it CMRR.

[Corrine]

Here is the letter I am sending to Van Ru. Please let me know if I should change it in any way.

RE: Total Card

Acct Number: 4809****

VR Acct Number: 22****

Current Balance: $0.00

Van Ru Credit Corp.,

It has come to my attention that the above referenced account, which had a $1,413.69 balance and was settled in full in the amount of $814.00 on March 24, 2004 as per our agreement, has since been sold or otherwise contracted out to another collection agency in the amount of $599.69. This was not part of the contract which I had with your agency.

“March 10, 2004

Dear Mr. Smith,

This letter is intended to verify that we have been authorized to accept

a settlement in full in the amount of $814.00 for the above referenced account(s).

Upon clearance of your payments, this account will be settled in full. This

settlement amount is valid until March 28, 2004

This arrangement is for settlement in full of the above referenced account.

Please call this office for payment instructions…

Sincerely,

Van Ru Credit Corporation”

Upon receiving this letter (full copy attached) your office was notified and the agreement was entered into. I gave a check by phone (copy attached) to be cashed on March 22, 2004 and which was cashed by your agency on March 24, 2004 (copy attached). I honored my part of the agreement/contract and in return I expected the same courtesy from your agency. That does not appear to be the case and as such I am left with the dilemma of how to legally rectify this problem.

I have decided to allow you the opportunity to report to all credit reporting agencies that this debt was settled in full as per our contract. I expect this will be corrected within ten (10) days upon your receiving this notice. Otherwise, I will have no choice but to include you in any lawsuit I may file regarding this matter.

Sincerely,

Mrs. Smith

[Corrine]

Thank you for the advise retmar. Will make appropriate changes. They wanted the POA because this is my husband's account and I am trying to correct the problem for him. They said they will not deal with me in any way until I show proof that I can legally handle his financial affairs on his behalf.

By the Way, what is a TL and FTC?

[willingtocope]

TL = Trade Line = an entry on your credit reports.

You could circumvent their request for POA by simply putting your husbands name on the letter. Incidently, in dealing with a CA, I never sign a letter...some of the scummier CAs have been know to scan the signature and use it for other purposes.

And...your last letter looks just fine to me.

[willingtocope]

Oh, and FTC = Federal Trade Commission

There's a sticky up in the "Read before you post" discussion group that explains all the abbreviations. And...yeah, I know...don't worry about it...most people miss that...

[Corrine]

Okay, I just revised both letters to include retmar's suggestions. I also decided to look over the credit report pulled last. There is only one account showing up for the $1,413.69 and that is Plains Commerce Bank (OC). Under current status is says "Charge Off; Type of Account - Revolving; Type of Loan - Credit Card; Whose Account - Individual". There is no mention that the account was ever sold to another lender, paid off or even accepted settlement. What's more, under charged off amount it has the total of $1413 and under balance amount it says $599. Since this credit report was months after I paid Van Ru and there is no mention that the account was sold that they are still holding the account and they are the ones attempting to collect the balance that the current company is now going after my husband for. Should I be sending a letter to them as well or am I just reading the credit report wrong?

One other thing. I disputed this account in May 2004 through Credco and their results were "UNABLE TO LOCATE CREDITOR ; ACCOUNT MODIFIED" but when I pulled his report in July it was right back on there. Is it normal for credit reporting agencies to report accounts when they can't even locate the creditor?

Edited to add:

There is a section that says "Date of last payment- 03/2004; Actual payment amount- $244". That isn't even right. It's $814 not $244.

[retmar]

First off, your 2nd letter will suffice except for the following. You will change it to read that due to the continued activity resulting from their "misrepresenting" their offer to you, they must assure the TL is deleted in it's entirety from all CRA's. This will be accomplished to show a form of "good faith" for their lack of professionalism. It will, in no way, relieve them of any liability if legal action is necessary.

As to the OC reporting as they are, we need some answers. Was this account sold to Van Ru? If yes, then the OC is in violation, as they should be reporting this as "sold or transferred" with a Zero balance. If it was assigned, they are in violation for reporting incorrect information as the letter clearly states the account is PIF. This can get you a total deletion from them if you pursue it. At the least, it could get you a Zero balance with a "pays/paid as agreed". Let us know.

As to the last regarding the deletion and reappearance, this is a violation by the CRA. If what you say is true and this was deleted, then reappeared, the CRA is required to send you a letter within 5 days of the reinsertion. But, if the CA altered anything to disquise it, other than amount, then it would fall on the CA.

[Corrine]

I'm not sure if the account was sold to Van Ru or not. I assumed it wasn't since the letter indicates they were working on behalf of a creditor. And like I said, there is no mention in the credit report that the account was sold or transferred. And Van Ru isn't listed anywhere on the report. I was thinking that if Van Ru owned it their name would be listed as the creditor and they would be the one's showing a balance due, not Plains Commerce.

As to the deletion, I'm clueless. I disputed it through Credco and got a letter saying "UNABLE TO LOCATE CREDITOR; ACCOUNT MODIFIED" and in July it was right back on there reported exactly the same way. All I really want at this point is to have the account reflect that there is no outstanding balance but I'm really getting ticked that they are pulling this business. If they didn't want anything less than the full amount then they shouldn't have made me the offer.

[retmar]

All you need to do is prepare your letters to the respective parties and give each of them 10 days from receipt to correct the problem or be sued. It is that simple. It makes no difference if they are assigned or bought as the same rule applies to all. I only mentioned the debt was sold as this is one of the normal tricks pulled on consumers. Too many times a JDB will agree to accept a lesser amount for PIF, but, to make a few extra bucks, they put the file in another pile of debts and sell it to the next one in line.

Remember, you have absolute, undeniable proof that the debt is PIF, and that the TL was to be updated as per the agreement. No one can argue that, nor, can they pursue any further activity. If the CRA has failed to delete an unverifiable TL, they are in violation themselves. They cannot amend a TL if it is unverifiable, they must delete, or show you absolute proof as to why they can amend only. Therefore, the OC must show a TL that reads the balance is Zero, transferred/sold or placed in collection. The 1st CA must show a Zero Balance and a paid collection, or delete completely, as per the agreement. The new CA must delete as they have no legal right to report as the debt was PIF prior to their receiving it.

[Corrine]

I am so angry I could spit right now. I bought my husband's credit report on line and all our efforts to clean up his credit have apparently failed. There is all kinds of crap on there that I didn't know about. Most of it are repeat accounts. I'm completely lost right now. There is one account that shows a $642 balance due through Trans Union but a paid off $0 balance on the same account through EX and EQ. There's one account reported through TU from 1996! It's paid off but come on. There is a car lease from 1997 and my husband said he's never even leased a car. And Plains Commerce!!! I've really had enough.

They are listed with all three CRA. They say he still owes $599 and he is $180 past due. Now this is where I'm confused. It says it was charged off and reported as a loss by credit grantor. It doesn't say anywhere that the debt was settled. I can't find Van Ru listed anywhere on the top portion of the credit report but at the bottom it says Van Ru and J.C. Professionals are both listed as creditors. I thought they had to notify you if they were going to put something on your credit report.

And here is the killer. I called Van Ru (couldn't help it I was so mad). They put me on hold, or so they thought, right after I gave them the account number. I heard the man saying "This woman is a liar..... Liar, liar, pants on fire..." Mind you I hadn't said anything to him other than the account number. I finally said "I can still hear you" and he said he wasn't talking about me and then said my account went back to Sherman Acq. who I had never heard of. I called them and they said they never heard of my husband either so I called Van Ru back. After telling three different people about the problem they transferred me to an office in a different state. The first woman said I needed to talk to a supervisor and that woman took the cake. She said I was wrong and that I misunderstood the letter. Needless to say, she said they are still going after the remaining balance. Go figure. So now I don't know what to do. I called Plains Commerce about their entry and asked if they were aware the account was paid and she just told me to dispute it through Credco and they would allow it to come off. Any help on what to do about Van Ru?

[Corrine]

Okay. I contacted all three.

Plains Commerce said to send them a copy of the contract and dispute their account with all three CRA's and they would allow it to come off.

J.C. Christensen and Associates said to send them a copy of the contract with proof of payment and they would remove all TL's.

Van Ru told me I was dumb, I didn't understand how to read the contract and that they would continue all collection efforts for the remaining balance.

I called the Attorney General in my state and explained the situation. The woman I spoke to said Van Ru is reneging on the contract and that they will contact them on my behalf to resolve the situation after I file a formal complaint. I am sending all three CMRRR letters asking them to stop collection efforts. I disputed this account with all three CRA's on-line and am also disputing via mail, with proof of paid account as a follow-up measure.

Two questions: Is there anything else I should do at this point? And I'm going to the bank next month to apply for a house loan (probably about two weeks off yet). Will the items I disputed not show up or will they show as disputed

[Champion80]

I have a question for you Corrine, is the CA reporting the CO as disputed the the CRA's, if not, you also have that violation which in turn can pay you back for all your trouble, or give the finishing barganing power. I didnt look into the laws per your state, but I believe this falls under the federal law.

I am sure with your patience, although wearing thin, you will make it through this, I cannot believe that you are having to go through this.

I just wanted to throw that in there, of course Retmar knows a great deal so I am sure Retmar will clarify if I am wrong Good luck.

[Corrine]

No, they aren't. But in all fairness, they haven't received my letter as of yet disputing the account. Once I get proof that they have received notice that the account is being disputed I will check to see if they added it. I'm not going to get my panties in a bunch about it until I get ready to go to the bank. That should give them plenty of time to make the appropriate changes.

[Leadhead]

I think I'd send out the following:

To the current CA: This debt has been paid in full, as per the enclosed letter from Van Ru. You are attempting to collect on a non-existant debt, which is a violation of the FDCPA: Attempting to collect any amount not "expressly authorized by the agreement creating the debt or permitted by law" - 15 U.S.C. Section 1692f(1). A debt that is in fact not owing - Finnegan v. University of Rochester Medical Center, 21 F.Supp.2d 223 (W.D.N.Y. 1998). Should you continue collection of this non-existant debt, I will file suit in federal court, naming you as a defendant, as well as all other paries involved and this matter will be hashed out there.

To Van Ru: It seems you have either sold or forwarded the 'remaining balance' on a debt I settled IN FULL with you to (current CA's name). Per the enclosed letter from you, this debt is paid in full. If this isn't rectified, I will file suit in federal court, naming you as a defendant, as well as all other paries involved and this matter will be hashed out there.

To the OC: I am being harassed over a debt, originated with you, that has been paid in full (see enclosed letter from Van Ru). If this isn't rectified, I will file suit in federal court, naming you as a defendant, as well as all other paries involved and this matter will be hashed out there.

Be prepared to follow through with actually suing, though.

[Guest]

Ooooo my goodness... Golly I wish I was out of college and law school at this point.

Honey I would snatch you up as a client so quick your head would spin.

You have so many violations of the FDCPA and possibly FCRA that you could almost have a nice downpayment for the house you want to buy.

First of all against the credit bureau. They cant find he creditor?!?!?! The account should have been deleted at that point!!

The tradeline is FULL of incorrect information.

The collection agencies are just begging to be sued. If I were you I would seriously start looking for an attorney in PA who handles this type of claim . This could be settled out of court for a nice chunk of change to you and your lawyer for probab.ly very little effort.

The letters you have sent are FANTASTIC!!! I love them.

You also should add that they should not call you or your place of work and that if they do you will take appropriate legal action.

Good luck to ya