Unusal Amex cancelled account

[Anonymous]

Hi Everyone,

   I've spent some time trolling the boards looking for some information to help me in my situation, but my situation is a bit unusual, and there's not really much out there that's relevant, so I though I might put it forward and see if any of you have some advice.

    So, the set-up is that I'm a dual citizen- US and Australia. I left the US just after I finished college, but I already had 3 credit cards (from back in the days when they didn't ask for your employer or income to give you a credit card) and I'm still living in Australia. Unlike many college students, I actually didn't overspend on my first cards. Recently, for business reasons, I've been carrying a substantial balance on them, but making payments fine. Of course, my credit suffered for this, but living overseas, there was no impact on my daily life, and I was working some large contracts that would clear the entire amount. In retrospect, not the best plan, but it was the only one I had at the time.

    As you can see coming, I recently had a situation where a business I did a contract for went under at the same time that my DH was having some medical problems. As a result of this double-whammy, I missed a few payments, went 90 days on one card, 60 days on another, but didn't miss a payment on the third.

    The 90 day late was Discover. They offered me a payment plan- something like 5% interest for a year, with suspension of charging privilges and deletion of the lates at the end of a year's successful payments. I jumped on that offer, and I'm 3 months into that plan successfully.

    The 60 day late was Amex, and they've cancelled my account. But, here's where it gets weird. They haven't reported me as late on my credit reports, and the account is reported as closed in good standing. I managed to get them a large payment to catch up before they closed the account, so I'm guessing that's why that account was closed in good standing. Because I'm overseas, I didn't actually know that they were closing the account- I just sent money as soon as another of my creditors paid me. I still have access to the account online, and they request a minimum payment every month, that I've actually paid 3 times. Two weeks ago, I printed out all the statements, and discovered that it says on my statesments

      " This statement is for information purposes only. This is not a bill. Please contact you collections agency for account information. Disregard the Minimum payment due, your account is in default and the balance is due in full." You have to actually dowload the pdf to see this, none of the online information says this, and if you use the online payment system and tick the minimum payment box, it gives you the option to pay the same minimum that's listed on the statement that's actually not a statement!

    Needless to say, I haven't heard from the collections agency! I haven't lived in the US for 11 years, so my last known address is a relative's who is no longer there. (I tried to update my addresses before, but they won't allow you to update to international addresses). I do all my banking online, and have paperless statements, so this has never been a serious issue before. All my CC companies (and student loan creditors) have my valid address and email contact, they never seem to have trouble finding me. I suppose maybe eventually the collection agency will find me, I'm not hiding very well.

   In the meantime, ideally I'd like to make some sort of payment arrangement with AmEx, but from some of the threads I've been reading I'm not too optimistic- has anyone out there ever managed to get them to make a deal after they close an account and pass it on to a CA? I definfinitely can't afford to pay in full just now (paying for DH's health care), and the kind of payments I can afford to make would have the total paid off in around 4 years, depending on what sort of interest or charges they want to put on. I get the sense from posts around this forum that a CA won't be happy with that sort of plan.  If I can't reach a good payment plan, and they proceed to sueing me, I'd have to either accept the judgement or file for BK. But, I have no assets in the US, and I don't even have an income in the US, and really, I'd prefer that we not get to that situation.

So, I'm looking for any advice I can get. I'd like to come out of this with my credit score as intact as possible. Afterall, someday I might want to move back home.

Thanks for reading my story, please let me know if you have any ideas.

Ange

[inthematrix]

Have you thought about calling Amex or are you afraid of poking the bear?

[Anonymous]

I think terrified would be more accurate.

I feel really lucky at the moment- no missed payment reported, no collection account reported, EQ credit score at 660...

Something must have to give soon...

I'm also a little worried that a regular customer service agent won't be able to help- So if I do find the courage to call, I'll think I'll try one of the backdoor numbers- or do think I need to follow procedure and call the regular number first?

Ange

[inthematrix]

I am so the wrong person to ask. I'm still a neophyte at credit protection and repair.

My guess is that if you keep making fairly substantial monthly payments they may not turn the account over to collection.  And I think you're smart not to want to bring anyone's attention to the fact that the CRAs aren't showing the late payments (yet).

But one of the experts here should be around to give you more learned advice.

In the meantime, I am rooting for you!

[Anonymous]

AmEx usually doesn't turn past due accounts over to CAs; their collections are mostly all done in house.

If you call AmEx and ask them which of their collections centers has your account I doubt it will start them looking.  They will give you the phone # of their collections office that has your account and you can contact them.

The AmEx collections people will usually work with you and once you have paid them off, they will remove you from the blacklist.  You can also talk to them about a program they call Oasis whereby once you have paid off the debt they approve you for a new card.

IMO AmEx is one of the easier CC companies to work with.

[RobertEG]

O6 raises some interesting questions.

If AMEX uses some corporate-affiliated internal collection branch to collect. the debt, that raises the issue of whether that internal collection branch is a legal "debt collector" under the FDCPA, and thus whether their collection activities are subject to any provisions of the FDCPA, including the entire DV process.

FDCPA 803(6) is the legal definition of who is, or is not, a debt collector.  It cleary makes provision for a creditor to pursue collection of their own debts, but requries them, in order to be considered a "debt collector," to use any name other than that of the credtior to which you had the debt.  They must purport to be a party with collection name other than the corporate OC, even though under common ownership, that does not convey to the consumer the belief that you are dealing directly with the OC.

That is neceassary in order to let you know that you can then avail yourself of the provisions of the FDCPA.

[Anonymous]

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@RobertEG wrote:

O6 raises some interesting questions.

If AMEX uses some corporate-affiliated internal collection branch to collect. the debt, that raises the issue of whether that internal collection branch is a legal "debt collector" under the FDCPA, and thus whether their collection activities are subject to any provisions of the FDCPA, including the entire DV process.

FDCPA 803(6) is the legal definition of who is, or is not, a debt collector.  It cleary makes provision for a creditor to pursue collection of their own debts, but requries them, in order to be considered a "debt collector," to use any name other than that of the credtior to which you had the debt.  They must purport to be a party with collection name other than the corporate OC, even though under common ownership, that does not convey to the consumer the belief that you are dealing directly with the OC.

That is neceassary in order to let you know that you can then avail yourself of the provisions of the FDCPA.

---

Exactly.

What AmEx does is have an exclusive partnership with at least two -- and possibly three -- debt collection companies where AmEx takes total control of the segment of each which handles AmEx accounts.  AmEx directly installs their own key personnel and handles all legal and economic aspects of the operation, which operates exclusively under the AmEx name.  It is not considered a CA and thus is largely immune to the FDCPA.

The good news is, however, to avoid larger issues and conflict with state law, AmEx's collection activities are usually free from the larger abuses commonly seen in the collections industry.  They will, at times, even honor a C & D.  Still, they do go beyond what CAs are typically allowed to do such as not ceasing collections activities in response to a DV.   

[RobertEG]

Thanks, O6, for the practical insight!  Helpful advice.

The whole scheme of what is or is not a "debt collector" under FDCPA 803(6) has always puzzled me.

It is predicated, under the statute, on nothing more the name they choose to use, and then whether that name would indicate they are the OC, rather than a "third person."  Would designation as, for example, that a collection activity was conducted by, I invent this name, "AMEX Colletion Dept X" convey the implication that it was not through the OC?  That beomes a matter of consumer perception.  A very crappy statute .  If no implication of collection from the OC, the consumer then has no FDCPA rights. 

AMEX has good lawyers.

[Anonymous]

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@RobertEG wrote:

Thanks, O6, for the practical insight!  Helpful advice.

The whole scheme of what is or is not a "debt collector" under FDCPA 803(6) has always puzzled me.

It is predicated, under the statute, on nothing more the name they choose to use, and then whether that name would indicate they are the OC, rather than a "third person."  Would designation as, for example, that a collection activity was conducted by, I invent this name, "AMEX Colletion Dept X" convey the implication that it was not through the OC?  That beomes a matter of consumer perception.  A very crappy statute .  If no implication of collection from the OC, the consumer then has no FDCPA rights. 

AMEX has good lawyers.

---

"A very crappy statute" is an excellent way to put it! 

In my opinion, most of the FDCPA should also apply to OCs.  Some OCs -- such as Navy Federal -- are mean and ruthless in their collections activities and put even many of the bad CAs to shame. 

I'd have to look through my files, but based on research I conducted when having multiple cases involving AmEx I discovered that there are some written guidelines and an FTC Advisory or two on what is required beforean outsourced CA can be considered an OC.  Although the name used in collections activities as well as the "least sophisticated consumer" test are key fundamentals, it does go a bit beyond that.  Some other key requirements when an OC uses a CA as their in-house collections are:

1.  That subdivision of the CA which collects for the OC must be a separate supervisory, administrative and financial entity from the CA's other clients.

2.  The subdivision must not perform work for anybody -- without exception -- but the OC.

3.  The OC must exercise direct supervisory, training and economic authority over the subdivision's everyday activities.

4.  CA subdivision employees must be directly responsible only to the OC.      

5.  The subdivision must have legal authority to use the OC's name and branding and use such exclusively and without exception.

6.  OC has excclusive legal liability for actions of subdivision.

Frankly, I am not sure what practical benefit all this brings to AmEx. 

     Could they find that collections is a profitable business?

     Is there some tangible economic benefit for them not to fall under the FDCPA?

     Does this allow them to pay collections personnel less than their "normal" employees?

     Does this allow them to pay their collections staff more than their "normal" employees without having to provide salary equity to the latter?

     Tax implications?

AFAIK only AmEx does this.  Does anybody know of any other creditor that does?