Can a Company Generally Recall an Account from a CA?

Submitted by srca on Tue, 05/25/2010 - 21:01
Forums

A little background first: I am dealing with a company with which I do over $1,400 in annual business (recurring billing). They sent one of my small accounts to collections for $9 after sending me just two emails (or so they claim, I never saw them and couldn't find the two emails in my account after the fact). They sent no letters and made no phone calls - they claimed it was all done by an automated "paperless" system they have since revised to include letters and phone calls.

The situation arose after I believed the small contract in question (for in internet domain) had been canceled. As I was unable to access the contract through the company's web interface after I attempted to the cancellation, so it seemed I had been successful, and I thought nothing else of it.

The long and the short of the matter is that the $9 domain was supposedly not canceled after all, and I was only unable to access the account online due to a computer glitch in their system and not to the account actually being canceled. Then the company attempted to charge my card of record, but the expiry date on the card had passed. Then they claimed to send me 2 emails (I was doing a ton of other business with them, so they sent me a ton of emails, and it is quite possible these particular emails went to spam). Finally, after a total of 60 days had passed, their automated system sent me to a collection agency for the $9.

My first inkling of a problem was a letter from the collection agency. Confused, I called the original company, was sent eventually to their billing department, and was told ultimately it was "out of their hands," despite the fact that I still was paying them $1400 a year in domain fees, despite a 4 year history with the company, and despite the fact that the whole issue arose in the first place because of their glitchy domain cancellation system.

Several months later, after many emails, letters, and a complaint to their local BBB that went unanswered (surprise, they have an "F" rating), they have offered to reimburse me for the collection agency fee, but they insist I pay it first, as it is "out of their hands".

So my question is, does anybody know how easy or difficult it is for a company to recall an account that was errantly sent to collections? I am not sure whether they sold the debt or not, though it is less than a year old and, again, it was for only $9.

Since it seems likely they would prefer to keep my $1400 in recurring billing, that gives me a bit of leverage with them. But I need to know what they can and cannot do with regards to the collection agency. They also sent an email to the general email account at my work referring to explicitly to the debt, in apparent violation of the FDCPA (after I had attempted to set up a totally separate account for a domain for my work). So I now also have that apparent violation to remind them of, if it helps.

Thanks for any information or advice anyone can give!

That depends on weather they sold it to the collection agency or if they just have a contract to collect bad debt for them. If they sold it and did a legal transfer than it is my guess that they can not pull it back.

Whatever you do and who ever you end up dealing with, make sure that you get a paid in full letter when it is all done so that they other does not come back and try to make you pay it again. Make sure you get the proof.

Wed, 05/26/2010 - 02:49 Permalink

Hi srca,

Welcome to this community :)

Yes, the original creditor can pull back an account form the collection agency provided that the debt hasn't been sold off to the collection agency. If a debt gets sold off, the original creditor won't be able to pull back the account. Thus, you need to ask the original creditor whether or they have the ability to pull back the account. If he can, request him to pull back the account. You can then deal with the original creditor.

However, before making the payment, request the creditor to agree to a "Pay for delete" (PFD) agreement. With the "Pay for delete" all the negatives will get removed from your account, and your account will get reported as "Paid".

Thanks,

Aaron

Wed, 05/26/2010 - 07:02 Permalink

If the account was assign to collection then it can be returned to the original creditor. However if it was sold to the collection agency, then it can't. And worse, the peon that you are dealing with probably doesn't know the difference.

I would point out that "pulling it back" has zero credit repair value. People mention this fantasy because they hate CAs so much. the important thing is what is on your credit report, not whether you write a check to an evil collection agency. the debt is false and they have no right to report it, whether the CA or the OC own the debt.

what is on your credit report right now? did you send a DV letter to the collection agency? if the DV is timely then the OC can refuse to send records verifying the account and all collection activity must stop. Even if they do send records, then you can send a C&D that says take me to court or FOAD.

Of course you must consider that it costs about 5.60 per CMRRR letter. As your credit is important to your business it may be worth $20-30, to do this and perhaps even brow beat these idiots into crediting your account.

the cheapest option would be to roll the dice and get the CA to agree to PFD. make sure they fax or mail the initial agreement before you pay with a deletion letter to follow.

Wed, 05/26/2010 - 10:56 Permalink

Thanks so much for your replies, I really appreciate all of your input. If I had to guess, I would say the company is paying a flat fee for collections rather than selling off the debts, but their billing staff is either precluded by in-house policy or just sheer laziness from taking action to recall the debt from the collector. In either of these cases, I will press them to recall the file from the CA. It's crazy to have a fully automated system that sends customers to collections based on an expired card without so much as a letter or phone call to alert them of the problem.

They seem to be acting as if they still have some sort of financial interest in the debt, since, out of the blue they shut down my ability to create new domains. Actually, this began last May, so a year has passed, and no mark has showed up on my report. But then I am not wanting to risk anything showing up.

Also, the domain I had been trying to register was not even under my personal account, but, rather a new work account (which they apparently only linked to me based on my name, as no other information was the same, and I used a company card). And then they sent an email back to my company's main "catch-all" email address referencing my supposed debt. Which, I'm pretty sure would be considered a violation of the FDCPA, were I to press that route. They clearly are not supposed to reference debts in a manner that could so easily be read by coworkers or employers (which it was). Again, just some ignorant employee not trained in how to do their job.

I'm going to send a FedEx to their top US exec and new head of customer relations to fill them in on what their employees have done. Both these people were hired after this all went down and have since ordered changes to the billing process, so they might listen if I get through to them. I have referred a bunch of clients to this place, so not only have I given them thousands a year in recurring bills. So I really need to press for a resolution if at all possible, as I would have to have clients dealing with a place that treats its customers with such contempt.

While it was odd that the employee emailed me offering to "reimburse" me for the collection costs, I would guess he did so because he simply has no idea how to recall a debt and also really has no interest in doing the bare minimum.

So thanks again for all your help!

Thu, 05/27/2010 - 01:17 Permalink

OK, Fedex? How about CMRRR? Fedex is $20. Clearly you have the money to spare but, I think you should consider the time and energy you are putting into $9.

If this is not on your reports then I would think about paying it and taking your business elsewhere. Maybe that is a big tech nightmare, but please consider ways of putting less energy into this. you are running a successful business and if they don't need your business, someone else will

Thu, 05/27/2010 - 10:00 Permalink

Well to be honest , I could care less about the 9 bucks. Even though it was a bogus charge, I would have paid it without thinking twice if they had simply let me know that the credit card they had on file had expired.

I am actually in the process of working with another company, though switching over 150-200 domains will be a huge pain, and the old place puts up a bunch of roadblocks to make it harder than need be. I really want to complete the move soon, since I don't want to leave what amounts to over $100k in assets in the hands of this type of company.

But since they seemingly stumbled upon the year-old "debt" this past week, my concern is that it could end up on my credit report if I am not proactive. And once I have transitioned my business elsewhere, I will lose whatever leverage I actually have, which is why I was planning on contacting them before I complete the move.

Of course, if I knew the credit place would just drop it, I would let it rest. I just can't see letting these lowlifes do damage to my credit based on a bogus $9 charge, especially when they have successfully processed hundreds of such charges on my cards before and since. (I'm not alone in experiencing this, I found. There are plenty of complaints posted online about this exact same issue.)

I really would love to drop it and move on, but I also am not averse to spending money to keep my credit report clean. That's why I was thinking of sending the Fed Ex. In my day job, I find that it is a way to get a letter opened by pretty much anyone at any company. But if they still blow me off, I guess I would have to figure out what the best approach would be: either just let it rest and move the rest of my accounts away from them or send a "Paid in Full" letter to the CA. My gut would be to just let it rest and only send the "Paid in Full" letter if the CA ends up reporting it, since they have not done so thus far.

Thu, 05/27/2010 - 11:44 Permalink

it won't go on your report if you pay it. before it goes there.

I am not talking about the $9, you have put hours of your valuable time.

Thu, 05/27/2010 - 23:03 Permalink