Interesting interaction with an old C.U.

[Anonymous]

I just wanted to share my story of trying to payoff my last collection yesterday with an old credit union account I had with Consumer Credit Union here in Michigan. I walked in and spoke with a account manager and explained my situation, told her I would like to see if they could pull the account back from collections and I would pay them in full right there on the spot ($712). She proceeded to look up the account and verified the total and called Consumers C.U. internal collections and asked them how to proceed.

She then informed me that in order to pay this off with them I would need to pay a 23% penalty of $199.63 bring the total to $912.57. Then she would notify the collection agency it was paid in full and they would update my credit report stating it would be paid in full, not removed from my report, just paid in full. She then went on to say that this was what the collection agency charged them to collect on the account and I would have an easier time dealing with them than the CA. I politely declined her offer and came home and called the CA and they are sending me a bill for the $712 owed and nothing more, should be here early next week so I can pay it.

I guess the moral of this story is, sometimes it's better to deal with the CA instead of the original creditor. I was baffled by the penalty fee as this debt is 1 year from falling off my reports and I would think they would be greatful to get a payment in full on it. 

[twono]

Hopefully the CA doesn't update the account making it appear to be a more recent collection.  Paying off an old debt so close to it's 'falling off date', always makes me nervous.  It does and can happen unfortunately.

[Anonymous]

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@Anonymous wrote:

I just wanted to share my story of trying to payoff my last collection yesterday with an old credit union account I had with Consumer Credit Union here in Michigan. I walked in and spoke with a account manager and explained my situation, told her I would like to see if they could pull the account back from collections and I would pay them in full right there on the spot ($712). She proceeded to look up the account and verified the total and called Consumers C.U. internal collections and asked them how to proceed.

She then informed me that in order to pay this off with them I would need to pay a 23% penalty of $199.63 bring the total to $912.57. Then she would notify the collection agency it was paid in full and they would update my credit report stating it would be paid in full, not removed from my report, just paid in full. She then went on to say that this was what the collection agency charged them to collect on the account and I would have an easier time dealing with them than the CA. I politely declined her offer and came home and called the CA and they are sending me a bill for the $712 owed and nothing more, should be here early next week so I can pay it.

I guess the moral of this story is, sometimes it's better to deal with the CA instead of the original creditor. I was baffled by the penalty fee as this debt is 1 year from falling off my reports and I would think they would be greatful to get a payment in full on it. 

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The lesson to be learned here is that when you try to "do the right thing" they will try to take advantage of you every time. If they had contacted you about this old debt (which may or may not be OOS for suit and/or credit reporting) they would have gladly settled for 50 cents on the dollar if not less, but since you went to them they obviously reasoned that the old TL was hurting you more than it hurts them, so if you want it changed you have to pay through the nose for it. Had I been you, after the CU's response I would have simply walked out and moved on with my life, never to speak or do business with them again.

[Anonymous]

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@twono wrote:

Hopefully the CA doesn't update the account making it appear to be a more recent collection.  Paying off an old debt so close to it's 'falling off date', always makes me nervous.  It does and can happen unfortunately.

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and creditor does that to me they will immediately be sued for $2,000 Statutory Damages - $1,000 for the FDCPA violation of misrepresenting the age of the accout (FDCPA violation) and the other $1,000 for re-aging the account (FCRA violation)

[Anonymous]

I haven't had an account with this credit union for years obviously with owing them money. I was hoping that they would pull the collection back from the CA and it would disappear from my report (wishful thinking). I guess the thing that shocked me was that they don't even own the debt any longer and they wanted to charge me the 23% on top of that. Frustrating, but it will be settled soon and I'll be collection free finally.

[FireMedic1]

Who is the collection agency? It might be one that deletes if PIF or settled.

[Anonymous]

It's Arbor Professional Solutions out of Ann Arbor, MI. I spoke with them yesterday and did a ton of research on them and they don't do PFDs. Most of their reviews are horrible and the lady I spoke with was pretty rude. I'll get the paperwork from them next week hopefully, then just get it paid off. It's my last collection and I'm at the point where I'll be happy to be finished dealing with collection agencies. 

I'm ready to finally see my scores start to rise from derogs no longer weighing them down. =)

[Anonymous]

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@Anonymous wrote:

It's Arbor Professional Solutions out of Ann Arbor, MI. I spoke with them yesterday and did a ton of research on them and they don't do PFDs. Most of their reviews are horrible and the lady I spoke with was pretty rude. I'll get the paperwork from them next week hopefully, then just get it paid off. It's my last collection and I'm at the point where I'll be happy to be finished dealing with collection agencies. 

I'm ready to finally see my scores start to rise from derogs no longer weighing them down. =)

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Before you pay them, you want the settlement agreement in writing. You may want to change your request - from a Pay for Delete (PFD) which most CA's and creditors will refuse to a Non-Disclosure Agreement (NDA - which most of them will accept). In the NDA you add a sentence that reads somethig like this: "the CA/creditor/attorney agrees not to divulge any information concerning this matter,  or the underlying debt therein, to any third party whatsoever, including credit reporting agencies" and insert a $5,000 Liquidated Damages clause for any violation of the (NDA). This is NOT a PFD because you are not asking that anything be deleted, you are asking that nothing be disclosed. When they agree to that part you have what I call a "back-door PFD" - because the NDA does NOT apply to you, so you are free to dispute the TL with the CRAs under FCRA. The creditor has one of two options when you do that - either not respond to the CRA's inquiry, at which point FCRA requires the CRA to delete the TL, or they can respond to the CRA's inquiry and you invoke the Liquidated Damages clause in a lawsuit against them.

[Azuieldrago]

If it was past your state's SOL and that close to falling off your reports, should have stayed quiet, saved $700 bucks and let it slip quietly into the night.