Charge off with Lending Club

[darlanurse]

Hello everyone,

Hope to get some good advice here from anyone who may have similar experience or know how to handle this kind of problem. I had maintained the good credit history as well as the scores for years until recently when the negligence caused me a big bad mark on my scores. I had a personal loan with Lending Club that had been paid on time every month up until we moved overseas and closed the bank account that tied to the loan for monthly automatic payment. However, I did submit the change of bank account through their website and received an email confirmation from Lending Club acknowledging of the new account to be used; nowhere in the email stating I still had to call to inform them again of the change. Due to stress and trying to adjust to the new life aboard I then didn't pay much attention to the fact that money had never been automatically taken out from the new account by Lending club which resulted in account past due and eventually charged off. For all these times, I'd never been contacted either via phone or mail by Lending Club nor the Collection agency who they claimed they used for trying to collect the debt from me. Once I found out about the charge off (through the free credit monitor offered by my other credit card company), I immediately contacted Lending Club trying to solve the problem. Despite several attempts and explanation, Lending Club refused to remove the Charge off although I offered to pay the debt in full (charge off is fairly new and  the original loan term won't even be matured until October 2018 anyway). They claimed that no errors on their part and changing what they previously reported to the credit bureau isn't going to be fair to the other consumers. 

I am willing to pay them in full since I know I owed them this debt but with their failing to update my bank account as submitted and no proof of their attempts in contacting me, I feel like they should at least work with me in deleting this charge off in which they have refusing to do so. Would I have a better luck if I pay the credit repair company to work with them on my behalf? 

All thoughts and suggestions are highly appreciated.

Thank you.

[gdale6]

No one can recommend you use a repair company it would be a violation of our credit repair guidelines which forbid such. I would try a BBB complaint to see if they will budge, sounds like you did your part with the exception of verifying the payment actually went thru. If you dont get the deletion with the BBB complaint there really isnt much you can do and I would just pay it at that point and stop its updating which will keep your Fico depressed. You could at that point also begin a GW letter campaign to them asking that it be removed.

[Anonymous]

Just had almost exact same scenario happen to me. I figured out that LC does this on purpose. They make money on the front end. After chargeoff the investor loses money but LC collects either directly from the borrower or sells the debt and makes money again that would have gone to the investor. Definitely fraudulent. 

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@darlanurse wrote:

Hello everyone,

Hope to get some good advice here from anyone who may have similar experience or know how to handle this kind of problem. I had maintained the good credit history as well as the scores for years until recently when the negligence caused me a big bad mark on my scores. I had a personal loan with Lending Club that had been paid on time every month up until we moved overseas and closed the bank account that tied to the loan for monthly automatic payment. However, I did submit the change of bank account through their website and received an email confirmation from Lending Club acknowledging of the new account to be used; nowhere in the email stating I still had to call to inform them again of the change. Due to stress and trying to adjust to the new life aboard I then didn't pay much attention to the fact that money had never been automatically taken out from the new account by Lending club which resulted in account past due and eventually charged off. For all these times, I'd never been contacted either via phone or mail by Lending Club nor the Collection agency who they claimed they used for trying to collect the debt from me. Once I found out about the charge off (through the free credit monitor offered by my other credit card company), I immediately contacted Lending Club trying to solve the problem. Despite several attempts and explanation, Lending Club refused to remove the Charge off although I offered to pay the debt in full (charge off is fairly new and  the original loan term won't even be matured until October 2018 anyway). They claimed that no errors on their part and changing what they previously reported to the credit bureau isn't going to be fair to the other consumers. 

I am willing to pay them in full since I know I owed them this debt but with their failing to update my bank account as submitted and no proof of their attempts in contacting me, I feel like they should at least work with me in deleting this charge off in which they have refusing to do so. Would I have a better luck if I pay the credit repair company to work with them on my behalf? 

All thoughts and suggestions are highly appreciated.

Thank you.

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[Kree]

If you make a payment, and a lender does not take the payment, you no longer owe the money. Refusing to accept payment is a discharge of debt. (UCC article 3-603)  It could be argued that you made the payment available, through the automatic payment feature, and as such LC's neglect to actually withdraw the funds resulted in them losing any claim over those payments. Now, you would need to continue making monthly payments until the end of your contract. The discharge of debt would only apply to the specific mayments that LC did not withdraw.

I would consult with a lawyer familiar with the UCC. If they agree that you have a strong case, you might be able to get the lawyer to work on contingency.  A lawsuit against LC could:

1. give you a court record showing that the missed payments are discharged

2. give you a court record showing that LC needs to resind it's charge off status and to remove any late payments

3. cover lawyer costs so you have no out of pocket expenses for this case

4. $500 for each automatic payment missed as a UCC penatly. Perhaps additional damages for the incorrect credit reporting.

Note: not a lawyer, so step 1 is alwaus discuss with a real lawyer.

[Anonymous]

If I understand you are currently living overseas, LC tried to take monthly but they were returned NSF/closed account and you never noticed the "extra" money in your current bank acct all this time.

If the LC loan docs are like other personal loans (I have no personal experience with LC) it pretty much spells out the legal ramifications for failure to pay. "Charging off" and selling the debt to a collection agency is well within their prerogative and they have every legal right to report failure to pay to all CBs.  They are not required to search for you "world-wide", they only have to use your last known address within the US if that is where you opened your acct.

If you submit in writing to their collections dept proof that you did a bank info change, and I would include proof of bank acct #1 being closed and proof of bank acct #2 being open and the funds being available, then they must adjust your acct because it was their failure for the 1st missing payment.  However, the ones missing after that are all on you.  Being "stressed" and "adjusting" is not a legal reason to miss payments or not noticing they wern't being taken out.

I would recommend sending LC the entire past due amount (you should still have it right?) and any late fees in a certified bank check using the postal service's certified mail with return card. Doing those things might get your loan back on track and hopefully your credit, it may take a while but after a couple of years the late payments have less impact.

I'm not trying to make you angry, but if you look at it from their point of view, you left the country, closed your bank acct and didn't pay them again.  I think EX did a "white page" report a little while back on "bust out fraud" (I am so not saying you did that) and it shows how the creditors are looking at things even though there is no intention of doing that.

I really hope this works out for you.

[sjt]

It might be worth it to hire an attorney to have them accept the payment and remove the charge off since you did send them new banking information and there is no record of them contacting you, etc.