$10 bounced check in collections ...

[spunk999]

I accidentally bounced a check to the local grocery store and when I went to the store to pay for it, they told me that I would receive a letter in the mail to pay - I thought Telecheck would send me a letter so I waited and waited and nothing came ... then all of a sudden it is on my credit report - I thought I was supposed to get a letter with 30 days to dispute the debt before it was reported? Any advise on what to do? I will of course pay it ... but just looking for the legal options I have in regards to my credit - I am trying to fix it and here I just added something for a dumb $10! It was my fault, but still ...

[nascar]

Ten dollars or ten-thousand dollars ... equally difficult to remove from your credit report. Just start going through the motions; maybe you'll get lucky.

This is just another reminder of just how important it is to creditors, merchants, credit reporting agencies and debt collectors to damage your credit at any opportunity.

[henry1018]

You may want to consider writing your attorney general- most don't want to mess with the AG office since their resources are virtually unlimited and their willingness to pursue a matter is not dependant on the Plaintiff's ability to pay--- just a thought! Good luck!!!

[bevj2]

How long ago was the check written? It must have been a while ago for it to now show up on your credit report. Is it listed with a collection agency? If so, I would contact them and negotiate a pay for delete...for crying out loud, it's only a $10 check, plus fees. I would explain to them that you thought the store was going to notify you of any actions but you didn't hear back from them, and you really want to take care of it. Play the part of the uninformed customer, and maybe they will agree to delete upon payment. If they do, make sure you get it in writing!!

[soveu53]

Hi call the store back and ask them for their check recovery department and speak to a supervisor directly and explain to them the situation also enquire if

you may have been reported to some check system for nsf and if so be sure to have them take you out of the system as part of the whole deal and get everything in writting.

and don't forget to stress that your a loyal customer(if applicable) and the mistake and their misinformation which lead to your cr ding

Good luck on whatever you decide

(Disclaimer: This is not legal advice so what you talking about willis)

Edited January 5, 2010 by soveu38
grammar

[spunk999]

the check was written maybe in September? Was not that long ago ... I tried talking to the store right after I wrote it and they said I would get something in the mail - good call on trying them again - it is a small store, so they don't have a big collection department - I just really thought in WI they have to notify me 30 days prior to listing it regardless ...

[Bigwoodystyl]

From my perspective, it's really unusual for a merchant, especially a small merchant, to simply report you to the CRA without giving you a chance to make restitution.

Is the name/address/phone# listed on your checks up to date?

I don't know about WI in particular, however, in most states, typically what happens when you bounce a paper check is that the company won't even contact you. They will merely convert the item to an ACH entry and electronically debit your account for the amount of the check. Then, they will separately debit your account for an NSF Charge [Note: the merchant's NSF charge is different from the NSF Charge that your bank hits you with]. Ultimately, the charges that debit your bank account are:

1. "Merchant ACH entry redeposited check #xxx"

2. "Merchant ACH entry NSF Fee for check #xxx"

3. "Service Fee- NSF"

WI may be different with all of their consumer protections. Perhaps, merchant's there aren't allowed to run the item through a second time? In most states, merchants can run an item through 3 separate times before contacting the consumer--either twice by paper and once electronically; or twice electronically and once by paper.

[Downto0]

I thought I was supposed to get a letter with 30 days to dispute the debt before it was reported?

I think you may be referring to the implementation of TILA encoded in Regulation Z. Here is section 226.5(

(2) Periodic statements. (i) The creditor shall mail or deliver a periodic statement as required by § 226.7 for each billing cycle at the end of which an account has a debit or credit balance of more than $1 or on which a finance charge has been imposed. A periodic statement need not be sent for an account if the creditor deems it uncollectible, or if delinquency collection proceedings have been instituted, or if furnishing the statement would violate federal law.

The wording is a little confusing, but the purpose is for creditors to keep consumers informed of any charges for as long as the account is collectible and to stop creditors from disclosing information if they fail to make the required disclosures to the consumer.

Imagine there is a $5,000 charge on your account and you are never billed for it, but everybody who gets a copy of your credit report knows that you have this debt, which is probably late because you had no idea about it so you never paid it and now there are late fees and finance charges, etc.

Before reporting/updating information to your CR, an OC (ATTENTION: it only applies to OCs) must disclose the information to you, give you an opportunity to dispute any errors, and then and only then release that new info to third parties.

As a matter of fact, this explains why most account balances/payments are reported to the CRAs at least a month after the billing cycle.

The OC won't tell you" "This is what I intend to report to the CRAs", but all the information listed in section 226.7 that must be in your monthly statement is fair game for the OC to disclose to the CRAs.

This is also why the annual "Privacy Notice" where OCs tell you that they protect your info and only disclose it to their affiliates, subsidiaries, etc. Hidden somewhere among all that stuff they tell you that they may share information about you with the CRAs including charge-offs.

Is the name/address/phone# listed on your checks up to date?

This may be your problem. Your contact information may have changed. The bank, who is the OC in your case, may have sent a letter or email to any known address to inform you of your overdrawn account.

Banks are usually pretty good about informing you that your funds are insufficient after the fact, but within 30 days.

You should download a copy of TILA and read it yourself. You may find several events where the OC, et alia, have not fulfilled their legal obligations.

If you find that your contact information is current and the OC did not inform you, you could sue. However, unless you like litigating for damages only, (the lawyers get all the money) I'd say just pay the nsf fees and be done with the matter.

Edited January 10, 2010 by Downto0

[Bigwoodystyl]

Downto0,

I like your use of Federal Bank Reg-Z. However, I'm not sure writing a check to someone qualifies as "lending".

This may be your problem. Your contact information may have changed. The bank, who is the OC in your case, may have sent a letter or email to any known address to inform you of your overdrawn account.

Bank are usually pretty good about informing you that your funds are insufficient after the fact, but within 30 days.

You should download a copy of TILA and read it yourself. You may find several events where the OC, et alia, have not fulfilled their legal obligations.

If you find that your contact information is current and the OC did not inform you, you could sue. However, unless you like litigating for damages only, (the lawyers get all the money) I'd say just pay the nsf fees and be done with the matter.

I think you're misunderstanding the situation. The bank is not the OC. In this matter, the bank simply acted as a clearinghouse between payee and payer. [The merchant to whom the check was written is the OC.]

Further, NSF fees are not the problem here. The problem is that the bad check [which was written to the merchant] has been reported to the CRA before she was given a chance to make restitution.

I thought I was supposed to get a letter with 30 days to dispute the debt before it was reported? Any advise on what to do? I will of course pay it ...

I tend to agree with this. However, it's important to note that a check is simultaneously both an instrument of payment and a contract. Once the check was bounced, you breached the contract. [This is not to mention that bouncing a check is a crime in every state.]

I still think, however, you should have received some sort of notice or bill from the merchant as well as a dunning letter from the CA, especially if the CA is the one who reported you to the CRA. But, I'm not a compliance officer, nor am I a lawyer. And, as already noted, Wisconsin is different from a lot of other states.

[Downto0]

The op did not say who reported the incident on her cr so we are left to assuming. I don't see where a ca is involved as of yet:

I tried talking to the store right after I wrote it and they said I would get something in the mail - good call on trying them again - it is a small store, so they don't have a big collection department

The "small collection department" is probably the manager or owner or someone with little or no collection experience. A true, experienced collector would have taken the op's money right on the spot.

My assumption was that the check was sent to the bank because when the op asked for the check it was not at the store. Where else would it go except to the bank?

As long as a consumer has a valid account and a check drawn on the account comes in, the banker will happily apply a nsf to the account whether the bank pays the check or not. They only exception would be on a recently closed account which was in good standing. The account is closed and it is not feasibly possible to apply a nsf fee.

Anyway, the op needs to come back with more detail. It would be nice to know who, exactly, reported the incident to the CRA and, what, exactly, was reported.

[spunk999]

Sorry - my fault for being confusing ... and mistaken ...

The issue was that a CA was reporting to my credit report, and initially I was saying that the CA did not give me 30 days to pay or accept the debt with that standard letter they usually send before they just start reporting - I was specifically waiting and looking for that letter so that I could pay this check as the original creditor, the grocery store, would not take my money.

I was going to pay this off right away as soon as I received the letter - I am trying to clean up my credit, not add more crap, especially something that is $10+a fee ... anyway, the letter was sent from the CA - it arrived while I was in labor and my friend cleaned my house before I came home with baby and I missed it and just found it.

The letter was sent October 15th of this year - I was still at the hospital ...

So I know what I have to do - practice my singing voice and call them tomorrow to do a song and dance and see if they will delete it if I pay ...

[Downto0]

You could call but you should follow up with a letter with the details of any agreement that you make with the ca.

This way, if they do not perform to your expectations of the agreement then you can threaten to sue. Otherwise, with a simple verbal agreement over the phone, you have no leverage to enforce the agreement.

Personally, I'd forgo the phone call.

[spunk999]

I was thinking to tape the phone conversation and then take a stab at the tactic discussed here: http://www.debt-consolidation-credit-repair-service.com/forums/showthread.php?t=283375

Except I was going to print on the back of my money order that by cashing the money order, they agree to delete, and if not, the damages would be X amount ... something like that ...

[Bigwoodystyl]

...

My assumption was that the check was sent to the bank because when the op asked for the check it was not at the store. Where else would it go except to the bank?

...

No, you're still confused.

When a check is returned unpaid by the drawing bank, it is sent back to the collecting bank [to be more specific, it is sent back to the bank of first deposit--which is the actual, physical branch location where the item was originally deposited]. Note: the collecting bank is the bank of the payee/depositor and is not the bank of the payer/maker. So, unless you're very confused, why would you think the bank would have the check? [in other words, why would a bank return a check to themselves?!]

To take it a bit further, the collecting bank will then either submit the check back to the drawing bank a second time without even notifying the depositor, or they will return the item to the depositor [and then charge the depositor a returned item fee]. Note: in this case, the merchant is the depositor.

If the check does get back to the merchant, then the merchant is stuck with the task of collecting funds from the payer. Also, the merchant will typically want to recoup the returned item fee that his bank charged for depositing a bad item. Note: once the merchant endorsed the check, he vouched for the validity of the check and he assumed responsibility in the event the check is not paid.

...

As long as a consumer has a valid account and a check drawn on the account comes in, the banker will happily apply a nsf to the account whether the bank pays the check or not. They only exception would be on a recently closed account which was in good standing. The account is closed and it is not feasibly possible to apply a nsf fee.

...

This isn't quite right, either. But, I'm not going to dissect that right now because it's too esoteric and doesn't apply to the matter at hand.

[MG05]

Stick with a debt card in the future!

[Downto0]

So, unless you're very confused, why would you think the bank would have the check? [in other words, why would a bank return a check to themselves?!]

Not confused...op gave a time frame to where the check just left the store.

I tried talking to the store right after I wrote it

[spunk999]

I did try talking ti the store right after I wrote the check, but when I said right away, I didn't mean the same day - I meant a few days later once I got the mail from my bank that the check was being returned ... sorry for the confusion!

[Downto0]

No need to be sorry.

When you first asked if you should have had some sort of warning about the debt being reported, I knew that TILA required such a thing and that it might apply to your situation.

I got the mail from my bank that the check was being returned

Looks like your were informed about the bad check and had your chance to dispute.

You also got notification from the ca:

anyway, the letter was sent from the CA - it arrived while I was in labor and my friend cleaned my house before I came home with baby and I missed it and just found it.

The ca is not a creditor so TILA wouldn't apply anyway.

I read the other thread about NDA. This method sounds risky. I'd write the ca a letter and ask that, after payment, the account would be listed as settled. This would show that there was a problem, but you took care of it.

Any creditor looking at your cr would not give this collection account much thought. I think there are lots of people on this forum who would trade credit reports with you.