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Pay Collection Agency or Not Pay?


sundevilatx
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I posted here a while back about some issues I had with HSBC/Capital One/United Recover Systems...  Now, I'm back with more questions.

 

My wife and I had a retail account with HSBC.  We were receiving our bills through my email.  The last bill I received was in September of 2012.  Around that same time, we had moved (across town) and we were also dealing with the death of my mother-in-law.  While I should have known better, the email was the reminder to pay the bill.  I don't know if we stopped receiving emails because of the Capital One acquisition, or what, but the last payment was made after the last email came in...

 

Fast forward to a couple months ago, we received a letter from URS stating our Capital One account was in collections.  Not knowing about the acquisition at the time, we weren't sure what account they were referencing.  I called the number in the letter and they said that they did not own the debt, but were acting on behalf of Capital One, who had acquired via HSBC.  They said they could settle everything up with a one-time lump-sum payment.  I arranged a n electronic payment, but something didn't feel right.  I came on here, read about how you should never give a CA your banking info, and cancelled my account and opened a new checking account the next day, in effect cancelling the payment.

 

The day after, I wrote a debt validation letter to URS asking them to validate the debt.  Sent the letter via certified mail, with return receipt.  I received the return receipt a few days later, and it's been nearly 45 days, and there's been no response from URS.

 

We've spent the last few weeks dealing with the death of my father-in-law.  And, now I'm back on trying to get things worked out.

 

I guess I should state my goal.  In a year or so, we'd like to buy a house.  In order to do so, we're going to need all the help we can getting our credit score as high as we can.  Our other big issue (financially) is that we own a house in another state (we moved to TX about 5 years ago) that is underwater, but we are able to rent it out.  Hence, we're going to need as high of a credit score as we can to qualify for a house here.  Also, money is tight right now (we're treating our dog for cancer).  Things will be better in a few months.

 

The last three days, I've been calling HSBC and Capital One trying to figure out if we can pay off through the original creditor.  HSBC said they had no record of the account, and said to call Cap One.  Cap One said the same, and to call HSBC.  After three days of run around, I finally got through to a Cap One rep who said that they did acquire the account from HSBC, and they have since charged off the account, and sold the debt to URS.

 

So, now what?  Given my goal of getting our credit score as high as possible, what is the recommended course of action here?  I will also say that the account balance was approx. $1200 at the time of the last bill we received.

 

From what I understand, without a validation of debt, URS must pull any negative info off my/our credit reports.  But, what happens if six months from now they finally get around to digging up the paperwork.  Can they then put the info back on my/our report?  

 

I realize I need to pull our report to see what exactly is on there, but for now, let's assume the Cap One account is listed as "charge off" and the URS account is listed as "in collections" (or whatever).

 

Should I settle with URS?  If I do settle with URS, is there any chance that I can get them to contact Cap One and have the credit reporting changed to something more favorable as a condition of payment (such as "closed at customers request" or maybe "settled" or something along those lines)?  I realize if I do anything, it should all be in writing.  It also seems as though, this will probably never happen when dealing with a CA.

 

Is there any chance URS is going to take us to court over a $1200 balance (that they probably only paid a couple hundred for)?

 

Not really sure what to do. I've read "don't ever pay a junk collection agency" and I thought URS was listed on a Junk CA list.

 

Just looking for advice on what you'd do in a situation like this?

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I will first give you my opinion on calling any of these first. Do not do it. If you must correspond with them only do it in writing and send it CMRR. 

 

If you are 100% sure that Cap One sold your account to URS then they are acting as the JDB or "owner" of the debt. If this is true then the Cap One balance should be listed as 0. That means Cap One has nothing to do with your account and will not care what happens. Cap One probably never owned your account as an OC anyway. If the account was charged off by HSBC before Cap One purchased it then they could also have been classified as a JDB. 

URS may or may not sue you. If they do you can fight and you have a good chance of winning. @TomnTex and some of the other TX posters can help you here. 

 

If the balance is 1200 then they probably paid less than 50.00 for it. I would not pay them, but if you do settle make sure and get an attorney to read over your agreement. Be warned that they may sell the balance if you don't get it properly worded. URS has absolutely no way of getting Cap One to change your CR, so if even if you pay them the Cap One lines will stay. 

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If URS owns the debt, and has not replied to your DV, they cannot sue you until they do.  If they do, you could counter claim for a violation of the FDCPA and probably get 1000.00.  They have to stop collection activity until they validate the debt.  If you already have negative tradelines on your credit reports, those are not going to go away until the 7.5 years.

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You stated that the letter you received from URS said they "were acting on behalf of the creditor. You need to find out exactly when cap 1 charged off and sold the account to URS. If they sold the debt to URS before they sent that letter they were in no way acting "on behalf" of any one. They misrepresented the character of the debt.

 

Now that you know URS owns the debt it makes it easier to determine what to do. I myself would send them a refusal to pay letter. This will act just as a cease and desist letter and they can not contact again but only to inform you that they will not contact you again.

 

This may force them to file a suit, but the good thing is they cannot prove they own the debt.

 

Expect the banks to tell you that in order for you to obtain a new mortgage that you will need to sell the rental property. I am not saying this is definite but they may require you to sell in order to bring down your debt to income ratio, unless you own the other house free and clear.

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@sundevilatx 

 

 

Just looking for advice on what you'd do in a situation like this?

What I would do is dispute with the credit bureaus right now and see what happens.  It sounds like documentation is sketchy - you might get this removed from your credit report.  Are they actually reporting?

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they can sue, but are not supposed to sue I guess I should say.  It it considered further collection activities without validating.  They can even win, but you may be able to counter with the fdcpa violation, at least recoup 1k from the judgement. :) I have to remember to post all the possibilities.

 

In a 1997 opinion, the Seventh Circuit states "[t]he debt collector is perfectly free to sue within the thirty days before receiving the debt validation letter; he just must cease his efforts at collection during the interval between being asked for verification of the debt and mailing the verification to the debtor." Bartlett v. Heibl, 128 F.3d 497, 501 (7th Cir. 1997) (Posner, J.).

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Did you send a Texas style DV letter? If not, you need to do so. We do things different in TX because we have the TFC-392 to back us up. It is more powerful than a normal DV. Also, make sure you stay off the phone and only write them. Send it CMRRR every time. Don't pay them $1,200.00 for something they paid $50.00 for. You should be past the TX SOL of four years by now. If you pay anything it will reset the SOL.

 

Google and read the TFC-392, all of it, it is very powerful for Texans. Find my TX thread on here and read it. I also place a short example of a Texas style DV on it too.

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Given that your goal is to improve your credit score, I would say that even if you paid the debt in full, you will not accomplish that result. Let's face it - the damage is already done - the account has been charged off and sold to a Junk Debt Buyer - I am certain that can be deduced from what is on your credit report, has been placed there by Cap1 and/or HSBC and paying URS isn't going to put them in a forgiving mood.

 

So.... I don't see how paying URS anything will help you accomplish your goal.

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Subscribing to this thread, as I was recently contacted by URS.  They are the most aggressive CA I have run accross.  THey called my cousin, friend, step mother, and who knows who else.  In my case, at this time I don't know if they are a JDB or working for the OC as a collection agency.

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Subscribing to this thread, as I was recently contacted by URS.  They are the most aggressive CA I have run accross.  THey called my cousin, friend, step mother, and who knows who else.  In my case, at this time I don't know if they are a JDB or working for the OC as a collection agency.

@scarab - Did they mention the collection to your third party?

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I spoke briefly to my stepmother.  She said they didn't say what the call was about.  They just asked: if _________ was my current address and if _________ was my current phone? 

 

They said they had an important business matter to discuss with me and that it was urgent, and to please pass a message to me.

 

When they spoke to my cousin they asked for a current phone, but he didn't give it to them.  I am not sure if he identified them via caller ID or if they told him they were calling from United Recovery Systems, as he told me by email that he got a call from this company.  I will ask my family and friends what URS said to them.

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I spoke briefly to my stepmother.  She said they didn't say what the call was about.  They just asked: if _________ was my current address and if _________ was my current phone? 

 

They said they had an important business matter to discuss with me and that it was urgent, and to please pass a message to me.

 

When they spoke to my cousin they asked for a current phone, but he didn't give it to them.  I am not sure if he identified them via caller ID or if they told him they were calling from United Recovery Systems, as he told me by email that he got a call from this company.  I will ask my family and friends what URS said to them.

@scarab - It sounds like they have their ducks in a row in regards to third party calls.  Just my opinion, and definitely worth exploring in any case.  

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