topic Re: I didn't know GERB was a debt collector in General Credit Topics

I didn't know GERB was a debt collector

MarineVietVet — Fri, 17 Feb 2012 21:05:19 GMT

My son received a letter today from GERB saying they had purchased his delinquent PayPal account.

I certainly was not aware that GERB (at least part of it) was a CA.

Re: I didn't know GERB was a debt collector

Juan123 — Fri, 17 Feb 2012 22:20:48 GMT

so wait... they purchased their own debt?!?!?!?

Re: I didn't know GERB was a debt collector

pizzadude — Fri, 17 Feb 2012 22:40:33 GMT

Maybe it's the in~house collections dept, trying to ramp up the pressure to pay ??

Re: I didn't know GERB was a debt collector

MarineVietVet — Fri, 17 Feb 2012 23:17:07 GMT

@Juan123 wrote:
so wait... they purchased their own debt?!?!?!?

That's what it sounds like.

Re: I didn't know GERB was a debt collector

MarineVietVet — Fri, 17 Feb 2012 23:18:22 GMT

@pizzadude wrote:

Maybe it's the in~house collections dept, trying to ramp up the pressure to pay ??

That makes some sense. I was just surprised for some reason to see the GERB name on a dunning letter.

Re: I didn't know GERB was a debt collector

LS2982 — Sun, 19 Feb 2012 01:26:09 GMT

@MarineVietVet wrote:
My son received a letter today from GERB saying they had purchased his delinquent PayPal account.

I certainly was not aware that GERB (at least part of it) was a CA.

Maybe they're trying to cut costs

Re: I didn't know GERB was a debt collector

haulingthescoreup — Sun, 19 Feb 2012 01:46:46 GMT

Wait, GERB or GEMB? All confused here.

Re: I didn't know GERB was a debt collector

MarineVietVet — Sun, 19 Feb 2012 04:21:37 GMT

@haulingthescoreup wrote:
Wait, GERB or GEMB? All confused here.

It was definitely GERB. GE Retail Bank.

Re: I didn't know GERB was a debt collector

OhioCPA — Sun, 19 Feb 2012 19:07:32 GMT

While GERB manages the PayPal card, it is possible that PayPal "owns" the risk associated with their cards.

I have wondered if this wasn't the case with most if not all of the cards that GE manages. This would possibly explain why some lines such as WalMart, and for me Sam's Club are not as generous as others. If GE doesn't maintain the risk from the TL then the determination of the credit lines rest with the issuer.

I applied for and received two new GERB cards in November, Sam's Club Discover and the Brooks Brothers card. My Sam's Club card was issued with a $1100 CL and the Brooks Brothers card came with a $1400 CL. Shortly after my fourth statement cut on both cards the CL was auto increased on the Brooks Brothers card to $2,400. A few days later I applied for a CLI and was declined on my Sam's Club card. Since I had used my Sam's Club card more than the Brooks Brothers card I came to the conclusion that Sam's Club had a say in the credit limit associated with its cards. This would explain some of the inconsistency across the GE managed cards.

Re: I didn't know GERB was a debt collector

RobertEG — Sun, 19 Feb 2012 21:32:59 GMT

OhioCPA's observations would seem to explain why they might, in some circumstances, be involved in the collection of debts owed to another, and thus be generally considered as collecting debts formerly owed to another.

However, I doubt that GERB would consider themselves a debt collector within the meaning of the FDCPA, and thus subject to its regulation.

FDCPA defines the term "debt collector," at section 803(6), to be

"any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debt, or who regularly collects or attempts to collect, directly or indirectly, debt owed or due to another."

An original creditor can only become a debt collector subject to the FDCPA should they, in the process of collecting a debt, use "any name other than his own which would indicate that third person is collecting or attempting to collect such debts."

Has anyone ever received a dunning notice from them, indicating that they respect any obligation under the FDCPA?

Similarly, if one wished to test the waters, they might send them a DV and see how they respond..........

Re: I didn't know GERB was a debt collector

MarineVietVet — Tue, 21 Feb 2012 03:57:49 GMT

I guess I need to read the entire letter and not just skim over it. DUHH!!

It is actually from Leading Edge Recovery Solutions and says: "Your PAYPAL SMART CONNECT account has been purchased by GE Capital Retail Bank and placed with our company for collection".

So now I know that GERB is NOT a CA.

Re: I didn't know GERB was a debt collector

pipeguy — Tue, 21 Feb 2012 05:21:10 GMT

As far as major lenders, meaning those that issue credit cards especially and not parking tickets or the local library, I have found they generally use in house collection efforts during the first 180 day "charge off" window. Once the account becomes charged off the accounts are generally sublet first, then sold after about a year. Of course this is not always true, just in general rules. I've also noticed Verizon keeps collection in house much longer even after charge off and even then they sublet it rather than sell it off.

Charge off is really just accounting rules and of course everything changed once bank no longer packaged their credit card debt into bonds in 2009 or so (prior to that 80%+ of credit card debt was packaged and sold as bonds, today its less than 10%). It's important to know that OCs are not subjected to the same rules that CAs are (FDCPA specifically), however when an OC presents their self as a CA using a different name or if they sublet the collection, the FDCPA applies.

In this case, GEMB or GERMB (all in the same really) co-brands the PayPal MC. I would guess that once the account went into default, PayPal closed their interest and sold the account "in collection" to the backer that being GEMB (still would be considered the OC if collected through GEMB). IME GEMB collects in house, then sublets, then sells the accounts off.