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Credit card debt collection

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Re: Credit card debt collection

#541

Post by FireBeyond »

worldwidelies wrote: post #189
Reason077 wrote: post #177

One thing that's not mentioned in this article is that credit card companies will sometimes make last-ditch "clear your debt at a discount" offers before passing your debt on to a collection agency. This happened to me many years ago. In the wake of the '08 financial crisis, I'd lost my job abruptly and decided to go travelling. I'd accumulated a balance that was fairly substantial for me at the time (on the order of…

same experience, except it wasn't that simple. A family member told me I should settle with them, because that's what they did too. They wiped the balance and closed the account but the settlement stayed on my credit score for 7 years. I had a friend who was getting calls by a debt servicer and was making it seem like no big deal. I told my friend to ask the person about the 7 years, the person reluctantly admitted t…

So this is a good point. From the perspective of your credit score, the damage is done when you get to that point. Settling a debt hurts.

Where settling a debt has "value" is around mortgages. It shows that even though the damage was done, you did something to make it right. When underwriters get into the nuances of your credit, they will ask about this.

On a related matter, credit "repair" agencies work very simply, and in a few ways, one being the stress relief of redirecting calls to them rather than you.

But how do they actually "repair" your credit?

Every derogatory item, accurate or not, they dispute, hoping the merchant won't respond or follow process. If they do? They dispute it again. And again. Hoping to catch them out.

Re: Credit card debt collection

#542

Post by vineyardmike »

LorenPechtel wrote: post #437
greenshackle2 wrote: post #428

Earlier quoted context omitted.

I'm in Canada so laws are different but what I found here is when I ask for proof they don't send it, they just sell the "debt" to a different agency and then I start getting harassed again 2 months later, rinse and repeat. (I put debt in quotes because the alleged debt is with a company I've never done business with, so I assume it's completely fake, mistaken identity, or identity theft.)

That happens here (US), also. I got one that must have been mistaken, sent off the letter asking for evidence and it shows up from a new guy instead. Same letter to the new guy, it never returned. There is one simple change I would like to see to the industry--if a debt is challenged it should be illegal to sell while the challenge clock is running and if it's not substantiated it should be illegal to sell, period. Y…

Just an FYI it is illegal if you ask. Or something like that IANAL. The author of the original article has a “what letter to write to debt collectors” article and basically says something to the affect of

“Please provide me proof that this debt is valid. Or else please notify all credit agencies that this debt is invalid and should be scrubbed. You are not allowed to sell or collect on this debt until you tell me it’s real”.

Of course doesn’t mean people follow the law. But sometimes you have to have intention in explicitly asking them to delete the record if they don’t have proof.

https://www.kalzumeus.com/2017/09/09/identity-theft-credit-r...

Re: Credit card debt collection

#543

Post by FireBeyond »

dkjaudyeqooe wrote: post #234
b112 wrote: post #187

Earlier quoted context omitted.

Poor credit can cost you dearly. Higher rates on everything, and a .5% difference in a mortgate rate is massive. It's a way to burn your credit for years, at great personal cost, so not likely that people will take the out without desperation.

Back in the early '10s I was reading a report from a guy who had stellar credit and the card limits to go with them. He ran up about $100,000 of debt on his cards on purpose and stopped making payments. He then approached his bank to settle the debt and negotiated a 60% discount. The account was marked "paid by customer" so it never appeared on his on his credit report as a default. He did get dinged for missing paym…

> The account was marked "paid by customer"

This is a lot harder to do these days. Not impossible, but definitely harder. The CRA contracts disallow marking an account as paid that was not paid in full (more commonly, people try to negotiate 'pay for delete' to remove derogatory histories).

Re: Credit card debt collection

#544

Post by FireBeyond »

NoMoreNicksLeft wrote: post #432
Broken_Hippo wrote: post #423

Earlier quoted context omitted.

A bad credit score doesn't really mean you've made bad choices. It just means you had some bad luck. The reasons for your bad luck can range from medical bills, job loss, missing work when poor (it snowballs) and other such things. It might mean you made a bad decision when you were 18, but it is still hanging around on your credit. You might have been in a financially abusive relationship. Shit happens, and it is na…

> A bad credit score doesn't really mean you've made bad choices. It doesn't necessarily mean this, sure. But, if we found a thousand people with bad credit scores and did a deep audit, we wouldn't discover 1000 who had unavoidable, unpredictable misfortune. We likely wouldn't even find 500. > Shit happens, and it is naive to think I've heard alot of "shit happens" excuses over the years. Few of them struck me as "no…

> Funnily enough, I work adjacent to a company called Rent Dynamics, and one of the features that they offer is positive credit reporting for those who pay the rent on time. There are others that do this too.

I actually feel that such companies should not be allowed to report a tradeline.

No company / landlord (and doubly so when you go with, as you say, 'not-quite-slumbs') is offering you rent in arrears. You're paying, in advance, and no credit was extended to you.

To me this is a bastardization of the credit system that's only got potential positive reporting as a side effect. Let's be real, companies like yours real customers are landlords/property managers, not tenants.

Re: Credit card debt collection

#545

Post by FireBeyond »

LorenPechtel wrote: post #431
pjc50 wrote: post #220

Earlier quoted context omitted.

How on earth can people be denied jobs for poor credit? You're not a creditor to your employer! Isn't this just the "social credit" system that people worry about in China, except privatised?

The reality is that credit rating has a strong correlation with responsibility. Thus, for example, in places where it's legal to do so insurance rates will be different. This does end up sweeping up a few who were hit by unavoidable circumstances but most people who get in credit trouble were skating too close to the edge.

> The reality is that credit rating has a strong correlation with responsibility.

No, the reality is that responsibility is but one component of credit rating - another, moreso, being 'how attractive are you as a customer to credit providers'.

This is why your score might drop when you pay off an account, or close it. Defenders of the system and CRAs will say "well, there's less information to assess your creditworthiness now that that account is closed", as if, say, you had ten years of on time payments on that account, but they mean nothing.

Re: Credit card debt collection

#546

Post by FireBeyond »

leereeves wrote: post #493
303uru wrote: post #393

Earlier quoted context omitted.

Meanwhile, a "website designer" who's never deployed a website, was never hired to create one and who suffered zero injury gets a ruling. This SCOTUS is invalid.

> Meanwhile, a "website designer" who's never deployed a website, was never hired to create one and who suffered zero injury gets a ruling. This SCOTUS is invalid. Where did you get the idea that she's never deployed a website? I've never heard anyone say that. (And at the very least, she has her own site, https://303creative.com/ )

You should read this: https://newrepublic.com/post/173675/supreme-court-just-used-...

> Puzzlingly, before she actually filed the first suit in 2016, Smith had apparently never designed a wedding website. Even weirder: She had never apparently been asked to provide services to a same-sex couple up to that point either.

And the customer who "requested" the site was fake, too:

> But after The New Republic reached out to Stewart directly—his contact information was readily accessible in court documents—the story fell apart: He said he had never submitted the form; he said TNR’s call was “the very first time I’ve heard of it.”

Re: Credit card debt collection

#547

Post by AnthonyMouse »

eru wrote: post #518
AnthonyMouse wrote: post #514

Earlier quoted context omitted.

That works for medicine because nobody wants two appendectomies. But plenty of people would want a second apartment, an unlimited amount of subsidized food they could resell, another UBI or social security payment etc. Then everyone backs up their truck to fill it with a fungible commodity being offered below the market price. The biggest problem with most of these things isn't that they require ID, it's that they re…

You can give out welfare without id or means testing: just require people to hang out in a specific place, and give them eg five dollars each hour. It's a terrible wast of people's time, but it solves the specific problem. > The sensible thing to do is replace all of said mess with a UBI, which doesn't require means testing and so doesn't require all of that paperwork. Yes, though instead of saying that UBI doesn't r…

> You can give out welfare without id or means testing: just require people to hang out in a specific place, and give them eg five dollars each hour.

You can do this, but is that supposed to be less burdensome than requiring ID?

> Yes, though instead of saying that UBI doesn't require means testing, I would say that a UBI folds the means testing of the tax system and the welfare system into one, and then decides on the net payment (constant UBI - taxes) that you get.

That's fine from a theoretical perspective, but the practical point is that it doesn't require separate means testing paperwork for the transfer payment.

> At least that point of view makes sense for something like personal income taxes. If most of your tax take comes from VAT or land value taxes, this framing is less useful.

Only in the sense that it would remove the means testing whatsoever.

If you look at the effective rate curve of a flat tax - UBI, it's quite progressive and can be made arbitrarily so by adjusting the tax rate and the amount of the UBI. And this is in fact the preferred way to do it, because phase outs for existing benefits programs are often higher than tax rates paid in higher tax brackets, especially when combined with a lower but still non-zero tax rate at low to middle income levels.

Switching to a flat combined tax-and-phase-out rate would be no less and possibly more progressive than the existing system, while also being vastly simpler and require no means testing paperwork or privacy-invasive income tracking of any kind.

Re: Credit card debt collection

#548

Post by Tijdreiziger »

jkaplowitz wrote: post #540
Tijdreiziger wrote: post #471

Earlier quoted context omitted.

The Netherlands: the terms "debit card" (typically “pinpas”) and "credit card" ("creditcard") are used exclusively to describe the payment infrastructure, and only the payment infrastructure. In everyday language, ‘pinpas’ always refers to Maestro/VPay, which are networks run by resp. MasterCard/Visa but are nonetheless incompatible*, and are accepted almost everywhere, while ‘creditcard’ always refers to MasterCard/…

> Most payment terminals now accept MasterCard/Visa as well as Maestro/VPay, though due to EU/EEA legislation, some may only accept debit cards as well as credit cards issued outside the EU/EEA (but not credit cards issued inside the EU/EEA). Why is this? If this is about the fee-capping rules, I would have expected that they’d disallow foreign credit cards and allow EU/EEA credit cards, since the foreign credit card…

Apparently it ends up being the intersection between the MasterCard/Visa ‘honor all cards’ rule (i.e. ‘if you accept MasterCard, you must accept all MasterCards’) and EU legislation saying ‘actually, you’re free not to accept cards with higher fees’.

I’m not really sure why said legislation doesn’t end up applying to foreign cards, though.

Another interesting point about fees is that when retiring the old domestic PIN network, Dutch banks ended up negotiating very low fees for domestic debit (then Maestro) transaction. Therefore, debit can end up being a lot cheaper than credit [1].

[1] https://www.mastercard.com/content/dam/public/mastercardcom/...

Re: Credit card debt collection

#549

Post by brewdad »

me-vs-cat wrote: post #490
kelnos wrote: post #458

Earlier quoted context omitted.

I think the burden of proof is in the other direction: if someone is going to use some sort of signal or test to determine if someone is eligible for employment, it is on them to present evidence that the signal/test actually accomplishes the objective they expect it to. In California, it is illegal to use a credit report in employment decisions (unless the position is in finance/accounting). Clearly lawmakers have d…

Do you think those employers want to turn away qualified people and keep the positions vacant?

No, but they might want to turn away a specific employee for an otherwise protected reason. Don't want to hire a black employee? Run a credit check. Statistically, black individuals have lower credit scores than white individuals. Deny them a job based on their credit score.

Re: Credit card debt collection

#550

Post by strix_varius »

incahoots wrote: post #530
rcxdude wrote: post #238

Earlier quoted context omitted.

This is because debt collection is a terrible deal: debt like this sells for a very steep discount, because debt collectors generally have a low rate of success of collecting. They essentially rely on apathy, ignorance, or compliance from the debtor, and if there's any resistance put up they essentially just write it off as it's no longer worth the effort (especially because debt collectors often don't have any actua…

Fwiw, a friend works at a collection agency (that’s an entire different story), and it’s exactly as you say. Extremely rare that a company that sells their debt to the collection company will provide them any additional information regarding the debt. My friend has told me that on occasion the debt collection company will reach out to the original owners of the debt and request additional information, but seldom get…

I would find it hard to be friends with someone who did this.
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