HandsOnDeck

CA attempting collection on checking acct closed 5 yrs ago

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I recently sent a validation request (CMRRR) to a local CA since it appeared they were chasing a credit card debt being pursued by another CA---the only delinquent debt that appears on my CR. Until now, they've provided nothing in writing...only repeated phone calls to my home, cell, office, employer, and every single member of my family (thus, the validation letter including "do not call" language).

Their mailed response came as a complete surprise since they claim to own a debt that doesn't appear on my CR (and, to be honest, I didn't realize existed)---an old business checking account closed nearly five years ago.

Here's the content of their letter:

- - - - - - - - - - - - - - -

This correspondence will serve as formal debt validation of your delinquent account with [CA name] which is currently due in full.

Account name: [Mine, with no mention of the business...?]

Account address: [My home address]

SSN: [Mine]

Original creditor: Wells Fargo

Original creditor account number: [our old checking acct number]

Original creditor address: Minneapolis

Account open date: 08/11/1997

Date of last payment: [Left blank...?]

Date of charge off: 04/01/2008

Current owner of account: [CA name]

Interest rate: 6 [not %...just the number 6]

Charge off amount: $3,188.77

Current balance owed: $6,320.95

- - - - - - - - - - - - - - -

Is the debt legit? Possibly---according to my past business partner, there *might have been* an outstanding balance when the account was closed, shortly after we closed the business. Since the CA's response to my validation request was minimal, I really DO need to validate/confirm it's correct.

Of course, the whole thing begins with "Do they or don't they" own the debt, since my (possibly incorrect) understanding of the relationships between OCs, CAs, and JDBs is that only OCs and JBDs actually own a debt---CAs are hired by them to collect the debt....?

Obviously, I don't want to do something that adds a new, negative mark on my CR. Currently, there's no mention of the WF account or the CA pursuing it.

Suggestions, please? Am willing to pay the piper, if it turns out I owe the piper money (ideally, for a negotiated, lower dollar amount---especially since the business no longer exists).

Thanks for your shared support and advice!

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Is the RJM Acquisitions?

Also - was the account in your name as a DBA or an LLC or corporation?

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Is the RJM Acquisitions?

I *think* you're asking "Is this RJM...?" If correct, no---appears to be a scruffy little CA located in a local strip center (read: mall + office spaces).

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If you received that letter in response to a DV, then they validated.

If not, then send a DV...

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the letter they sent does not qualify as "debt validation". I would suggest sending a follow up letter stating as much and letting them know absent specific proof (statements, original signed contract etc...) the debt doesn't exist. I would also recommend you note in the 2nd letter that any attempt to collect or report this debt absent proper validation would be pursued as a violation of the FDCPA section 807(8)

"(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."

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Also - was the account in your name as a DBA or an LLC or corporation?

Was "dba" (changed to LLC several years years later, but the bank wouldn't have known that).

Sorry...missed that part of your post earlier.

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If you received that letter in response to a DV, then they validated.

If not, then send a DV...

Was in response to my DV letter. What has me perplexed is:

1. Do they actually own this, or does Wells Fargo? I thought only OCs and JDBs owned debt, then hired CAs to chase it down...?

2. Since bank accounts don't have date of last payment, first date of default, etc., how do I know when the clock began ticking?

I definitely need more info than the little bit that's in their letter, so I can confirm this is correct.

Am also deeply concerned about taking the right steps to avoid this being ADDED to my credit report, since it's nowhere to be seen right now....

Edited by HandsOnDeck

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1. Do they actually own this, or does Wells Fargo?

They probably do....

2. Since bank accounts don't have date of last payment, first date of default, etc., how do I know when the clock began ticking?

I would say that the time began ticking whenever you became overdrawn and did not pay them back, in a sense, defaulted.

There might be a statute of limitations from written contracts, but I'd check to see if there are any state statutes specifically dealing with checking accounts.

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To start with they can not touch your accounts,,,,any of them whether closed or not,,,,without a court order, if they do take money from your account without a court order or your permission that is THEFT.

Second who owns the debt is what they will have to prove if they sue. You will not get much out of them in the way of proof they own the debt unless it goes to court. Validation of debts under the FDCPA is very minimal and what they sent you is enough. If you have questions about the debt you will not get the answers you want to hear from the debt collector.

I would also say since there is a former partner from your business that partner should also be responsible for some of that debt. Id it was an LLC that is a different ball game all together. They can not touch any personal assets from an LLC with out a court order.

Myself I would send them a refusal to pay letter..make it short and sweet

To whom it may concern I refuse to pay the alleged debt you are trying to collect from me. That is all you need to say in the letter. A refusal to pay is the same thing as a cease and desist, only most collection agencies do not know this.

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To start with they can not touch your accounts,,,,any of them whether closed or not,,,,without a court order, if they do take money from your account without a court order or your permission that is THEFT.

...

Myself I would send them a refusal to pay letter..make it short and sweet

To whom it may concern I refuse to pay the alleged debt you are trying to collect from me. That is all you need to say in the letter. A refusal to pay is the same thing as a cease and desist, only most collection agencies do not know this.

Not worried about them touching other accounts---my concern is about them touching my CR. As of now, there's no mention of either the WF checking account -or- any collection activity against the charged off amount; I don't want to make a wrong move that ADDS this to my CR.

I personally don't think you have to pay it at this point right now.

Reasoning, please...? Would love to hear your thoughts on the topic.

They probably do....

I would say that the time began ticking whenever you became overdrawn and did not pay them back, in a sense, defaulted.

There might be a statute of limitations from written contracts, but I'd check to see if there are any state statutes specifically dealing with checking accounts.

MN = 6 years SOL on checking accounts

Is there a way to confirm---one way or the other---without this being added to my CR? For example, I could contact WF, but fully expect to hear either "We charged it off, so go talk to the CA" or "Sure, we'll take your money, but we'll also add this to your CR, which starts the clock NOW, keeping it on your CR for another 7 years."

Definitely a huge step backward.

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I don't think you would hurt your credit report at all by going to Wells Fargo and finding out what's up. They can't report bad checking accounts to the CRAs. If they tell you who the collection agency is, then you can start negotiations with that company, if you want. You can also always dispute the collection if it shows up on your credit report.

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Let's assume the 4/1/2008 Charge Off date is the date that starts the SOL for suit. If that is the case then on 4/1/2014 they are SOL on the SOL for collections. The 4/1/2008 date did, however, start the 7 year FCRA clock, so on 4/1/2013 the account become OOS for credit reporting purposes. That is 4 months away so teh damage they can do to your CRA file, if they report today, would be short term.

First question: The Business - was it a Partnership, LLC or Corporation? It makes a BIG difference.

Second question: When did the business actually lose - its last transaction?

Let's see if we can get a better handle on the SOL for suit.

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Happy to see you here, Flyingifr. Thanks for jumping in.

Let's assume the 4/1/2008 Charge Off date is the date that starts the SOL for suit. If that is the case then on 4/1/2014 they are SOL on the SOL for collections. The 4/1/2008 date did, however, start the 7 year FCRA clock, so on 4/1/2013 the account become OOS for credit reporting purposes. That is 4 months away so teh damage they can do to your CRA file, if they report today, would be short term.

Forgive the newbie question, but...OOS? That one, I'm not familiar with (yet).

First question: The Business - was it a Partnership, LLC or Corporation? It makes a BIG difference.

• When the account was opened: Sole proprietorship (dba)

• When the account was closed: LLC, although the bank didn't know that. The final statement reads [my name] dba [business name].

Second question: When did the business actually lose - its last transaction?

This has been a real eye-opener. Managed to dig up the final three months of bank statements, which showed the following:

Wednesday, 1/30/08

The last "manually initiated transaction" (keep reading...you'll see why I've chosen those words) was a deposit made the same day we officially closed all vendor accounts, with the exception of the checking account.

Thursday, 1/31/08

We had $800+ in the account. In the spirit of full disclosure, I knew we were positive, but had no idea by how much (among the other 4,682 things necessary to close a business, all I needed to know was that we were still in black ink, with no bills remaining).

I'm spitting nails over this next part, so get ready.

Friday, 2/1/08

The very next day, WF processed my regular end-of-month salary auto-pay, pushing the account into negative numbers. Knowing we were positive at month's end---but again, not knowing by how much---the deposit into my personal WF account didn't raise flags. I paid the mortgage, car, electric bill, etc. like normal, under the assumption the company account was still positive. Surely WF wouldn't process an auto-pay if there wasn't cash to cover it, right?

Wrong.

WF withdrew the salary payment from the company account, pushing its balance from $800+ to -$1600. In 24 hours, we went from positive to negative without lifting a finger.

Feb + March 2008

Exacerbating the problem, two vendors (UPS and Merchant Services--the company that processed our customers' credit card transactions) continued submitting weekly/monthly auto-bills for two months after being notified to close our account. As a result, a combination of unauthorized charges and corresponding credits continued to hit the account, right up until the bank closed the account.

The vendors apparently caught the mistakes, issuing credits against the unwarranted charges (while continuing to submit new charges, go figure). This flurry of activity went on without me realizing it.

FYI: If you've ever had a merchant services account, you know that one month (even with no transactions) equates to dozens of nickel and dime charges automatically submitted to your bank. Each of those charges--plus the salary transfer--triggered NSF charges.

3/31/08

WF closed the account with a balance of -$3,178.82:

2,500.00.....The auto-pay that should *not* have been processed or cleared

+678.82.....Bank NSF and "uncollected funds" fees

Should I have caught this back then? Sure. My bad.

But reflecting on the mountain of things happening while we closed the business, sold everything off, stripped the leased space back to eggshell status, wrestled with bonehead landlords (we weren't violating anything in the lease..they're just impossible idiots), and moved me into the new career, it's not surprising I didn't notice all these silent transactions in a checking account I believed to be sitting dormant, with cash on deposit.

It's good that no sharp objects were on my desk when I located those final statements.....

Let's see if we can get a better handle on the SOL for suit.

Or an entirely new game plan. This "little revelation" has my head spinning like a top.

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Let's assume the 4/1/2008 Charge Off date is the date that starts the SOL for suit. If that is the case then on 4/1/2014 they are SOL on the SOL for collections. The 4/1/2008 date did, however, start the 7 year FCRA clock, so on 4/1/2013 the account become OOS for credit reporting purposes. That is 4 months away so teh damage they can do to your CRA file, if they report today, would be short term.

Trying out the Chinese abacus? 2008 + 7 -> 2015.

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Trying out the Chinese abacus? 2008 + 7 -> 2015.

My bad - shifted the wrong number of beads.

Ba jia Chi xiandeng de Xur WU, mei yo Xur SAN.

Edited by Flyingifr

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So, who is the JDB your dealing with?

That's just it---I'm not. As best I can tell after digging, digging, digging, this is a CA, not a JDB (thus my question in an earlier post about whether or not they even *can* own a debt).

How could I find that out, definitively?

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That's just it---I'm not. As best I can tell after digging, digging, digging, this is a CA, not a JDB (thus my question in an earlier post about whether or not they even *can* own a debt).

How could I find that out, definitively?

I'm not sure that's where you should be placing your efforts (finding out if they're a collection agency or JDB). If you were debating on whether or not they can add interest (collection agency no, JDB, yes), then it would be important.

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Update time.... 

 

(You'll see me mention the MN AG's office below. At the suggestion of wise forum members who participated in the other thread noted in my initial post, I did file a complaint regarding the CA's agressive behavior. They've been "in the loop" for much of the back and forth, as a result.)

 

Since my last post:

 

Dec 1, 2012 (approx)

The AG forwarded my complaint to the CA, along with their own cover letter demanding complete and thorough validation, since what little they'd provided to date was insufficient to confirm the alleged debt.

 

Dec 10, 2012

AG sent me the CA's reply that said they'd requested 12 months' of account statements from the OC.

 

Jan 7, 2013

Rec'd three (not twelve) months' worth of statements directly from the CA, beginning with Feb 2008...with an offer to settle for $2,500 instead of the full $6,336.15 (correct me if I'm wrong, but didn't someone say CAs can't add interest?). Now that I've combed through the statements, well...I'm all smiles. Here's what happened on the February statement:

 

 - Jan 31, 2008 we closed the business with a positive balance of $ 835.52

 - The final/January merchant services bill: $ 391.31

 - The final/January UPS bill: $12.45

 - The final/January insurance bill: $ 92.52

 - Monthly bank fee: $ 5.00

 

In other words, we had enough to pay all our bills, which would leave a remaining balance of $ 334.24 + interest.

 

What derailed things? Wells Fargo processed a monthly auto-pay for $ 2,500 against a balance of $ 835.52 on February 1. This auto-pay, as noted above, was my monthly salary. The auto-pay transferred funds from the business account to my personal checking account, at the same bank branch. Had WF either not processed the automatic transfer due to insufficient funds -or- reversed the transfer upon realizing they'd erred by making it to begin with, NONE OF THE OVERDRAFTS WOULD HAVE OCCURRED. Not one.

 

Instead, WF processed the auto-pay, knowing there weren't funds to cover it, putting the account under water. Then they charged us a $34 NSF fee for it. When our legitimate bills began arriving four days later (merchant services, UPS, insurance, etc.), there weren't funds to cover them, which meant more NSF fees. 

 

Making matters crazier, merchant services and UPS kept billing the monthly account fees, even though we'd closed our accounts with them the end of January. They caught their mistakes, reversed all the mistaken charges, but of course, by that time, Wells had tacked on a $34 NSF fee for each and every one.

 

The insurance company didn't submit a charge again (at least one person did their job right in this fiasco).

 

My guess is that the CA figured this out, realizes Merchant Services and UPS will back my story, and is hoping to collect on the $2,500 auto-pay since it was never returned. 

 

Before I respond to anyone, I'd like your opinions about how to proceed.

 

(Yes, I spent the $2,500 auto-transfer, in good faith, having no idea it never should have run...see my post above, dated 28 Nov at 6:16). 

 

Thoughts? Anyone? Anyone?

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Update time.... 

 

Jan 7, 2013

Rec'd three (not twelve) months' worth of statements directly from the CA, beginning with Feb 2008...with an offer to settle for $2,500 instead of the full $6,336.15 (correct me if I'm wrong, but didn't someone say CAs can't add interest?). Now that I've combed through the statements, well...I'm all smiles. Here's what happened on the February statement:

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I HATE the new board editor... it's buggy. I couldn't add comments to the above post... so I'll try that here:

 

So - I'm guessing that you're going to settle by paying the $2500 that you realize that you DO owe. In other words - what they've offered.

 

Also - have you finally found out WHO the JDB is?  I mean, the OC can't sell the debt directly to a CA. If I'm not mistaken, the Current Creditor and the CA can't be one and the same entity...  So I'm curious who the JDB is?

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I HATE the new board editor... it's buggy. I couldn't add comments to the above post... so I'll try that here:

 

So - I'm guessing that you're going to settle by paying the $2500 that you realize that you DO owe. In other words - what they've offered.

 

I'm fine paying the $2,500. Just want to be sure that I do this (read: handle the paperwork) in a way that doesn't add a negative note to my CR, nor opens a door for someone else to try collecting the remaining dollar amount. 

 

Currently, this debt does not appear anywhere on my CR. According to other threads, that's because it's an old checking account, not a credit card. Want to be sure my actions now don't result in the CA posting a negative settlement entry that brings this debt onto the CR.

 

 

Also - have you finally found out WHO the JDB is?  I mean, the OC can't sell the debt directly to a CA. If I'm not mistaken, the Current Creditor and the CA can't be one and the same entity...  So I'm curious who the JDB is?

 

My understanding (again, keeping in mind this is a checking account, not a credit card) is that banks hand off---not sell---closed accounts to CAs for collection. 

 

This is most definitely a CA, not a JDB. 

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I'm fine paying the $2,500. Just want to be sure that I do this (read: handle the paperwork) in a way that doesn't add a negative note to my CR, nor opens a door for someone else to try collecting the remaining dollar amount. 

 

Currently, this debt does not appear anywhere on my CR. According to other threads, that's because it's an old checking account, not a credit card. Want to be sure my actions now don't result in the CA posting a negative settlement entry that brings this debt onto the CR.

 

 

My understanding (again, keeping in mind this is a checking account, not a credit card) is that banks hand off---not sell---closed accounts to CAs for collection. 

 

This is most definitely a CA, not a JDB. 

Get any deal you make with the CA in writing.

You can ask that it be quashed with prejudice and not resold.

 

You can also put in something to the effect that if they do sell it or put it on your CR, that you will be entitled to 10k in damages, etc.  :)

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