How I Handle Collection Agencies and How You Can Avoid them in the Future
Posted on | November 22, 2009 | 5 Comments
I am sharing this experience with you to hopefully help you protect yourself from future, random calls from collection agents, like I received last week. Read through to the bottom for tips on how to avoid future headaches.
Growing up, both sets of my parents declared bankruptcy within a few years of one another. This was a tough experience for all of us. I remember the relentless phone calls, and my father’s and mother’s orders to never answer the phone. If we answered the phone and it happened to be an agent, I would hand over the phone with an innocent “I’m so sorry, I thought it was my friend” look on my face. Occasionally a collection person would visit our farm and when my father saw them walking up the walkway, he would cower away to the bedroom and tell us to inform the collector that he was not home. It was an ugly sight.
So how do I handle collection agents as an adult? Well, I had the pleasure of finding out last week, when I was shockingly called by one! And I will tell you how I handled it: head-on and with diplomatic aggression. And why is that? Well, I have nothing to hide.
Anyone who knows me, and that includes my readers, knows how diligent and fiscally responsible I am. So it came as a complete shock to my system when I answered my cell phone at work and a collection agent was on the other end to greet me. The conversation went something like this:
“Hello, is this Amanda Grossman?”
“Yes (cheery-eyed and curious)”.
“I am calling to let you know that you owe XXXX apartments $3,400.”
“What?!? (incredulous and white-faced)”.
The conversation went on from there. He emailed me a copy of the charges, and I explained to him that I had been quite diligent with my dealings with this apartment complex because I broke the lease early and had wanted to take care of any obligations so that something like this would not creep up and bite me out of nowhere (like the day after my birthday).
Back in 2008, when I decided I needed to break my lease after being laid off, I read over my contract diligently. According to the contract, if you broke the lease early you would owe an extra two months rent after vacating. After that, your lease is voided. I moved out on July 31, 2008—having given my 60 days notice—and paid August rent on August 5th. I was then informed by one of the apartment employees that they had found a renter for my apartment for September, and so I was only liable to pay for the August rent (which I had all ready paid). That was the last time I had any contact with this apartment complex.
Yet according to this collection agent, they have no record of me paying the August rent, or of any of these conversations. On top of that, the renter they found apparently did not move in until mid-October, so they are charging me for September’s rent and half a month’s rent in October, which is illegal per the terms of the contract (being a regulator, I pointed this out by reading the terms of my contract to the collection agent). Also, they are charging me $690 for the discount I had received over the course of the contract because I terminated early. Wow.
After receiving such an unexpected, shocking phone call, I took a personal day from work and rushed home to my trusty old filing cabinet. Next I called my old bank to get statements from these three months, as well as my cell phone provider to prove that I had called the apartment complex several times during this time period.
Armed with this information, I called the collection agent back (trust me, he was surprised to hear from me). What I still could not understand was that this occurred over a year ago, and the apartment complex never contacted me directly with any issues, even though I had provided them with my phone number as well as my new address in Texas. I asked him why I had not been contacted, and he said I should have received a final bill from the apartment complex. I asked for proof, by certified mail, that the final bill had been sent (because I have not seen this final bill at all), and he said he could not provide the proof. In other words, I never received a final bill.
The bigger issue is not all of these charges, but the fact that the person I dealt with at the apartment complex no longer works there. If he did, I could simply call him up and ask him to provide a statement of our conversations, and this would be easily dealt with.
Here are my tips for avoiding something random like this from happening to you:
- Keep a Filing Cabinet: Organize your life and finances into folders, and keep records of leases, contracts, loans, taxes, etc. for five years or more.
- Get it in Writing: It’s great if someone gives you a concession, or clears up an issue on a bill; but you need to get this in writing from that person. Employees leave agencies and companies all of the time, and who knows when an issue you think you had resolved may resurface.
- Read Your Contracts: You need to know what you are getting yourself into before entering into any contract or lease. What happens if you unexpectedly need to terminate a contract? Are you able to pay any extra fees or charges incurred as a result of your actions?
- Keep a Record: Make sure to write down any important conversations that you have regarding contracts, and note the date, time, person, contact information, and title.
At this point, I am faxing a copy of my bank statement to prove my payment of August rent, as well as sending a formal dispute letter that is going to call into question all of these other charges. Wish me luck!
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Tags: collection agency > collection agents > Debt > lease contract > terminate lease early
Comments
5 Responses to “How I Handle Collection Agencies and How You Can Avoid them in the Future”
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I have Joined the Yakezie Challenge!
November 23rd, 2009 @ 10:22 am
Good luck! I hope you’ll have great news when we see an update.
Good records and printable bank statements/credit card statements have always helped us clear up any issues we’ve had in the past with misinformation.
[Reply]
November 23rd, 2009 @ 11:42 am
I had to break a contract with Bally’s gym once. I was diagnosed with something and had to immediately relocate somewhere Bally’s did not have a location. I went to the gym and explained my situation, showed them the clause in the contract that gave me an out and they said screw you, you didn’t give 30 days notice. As if I had some kind of choice in the matter. Nearly 20 years later, I still hear ocassionally from one collection agency or another about that.
[Reply]
November 23rd, 2009 @ 11:59 am
Great advice. As most financially savvy people learn over time, good recordkeeping will save you from this and many other predicaments.
I had a unpleasant experience with a collection agency recently. Without warning, they submitted a derogatory entry to credit bureaus that caused a 90-point drop on the credit score.
They were trying to collect on a bogus debt with a music club dating back over 8 years.
How do you prove that you never ordered nor received a bunch of CD’s from a music club?
The only thing that worked involved a lengthy and time-consuming process:
* Report collection agency to BBB.
* File comlaint with Attorney General.
* File complaint with Assoc of Collection Agencies.
* File a dispute with credit bureau.
Only then they stopped collecting and removed the derogatory entry from the credit report. Unfortunately, I must’ve spent 10+ hrs over 2 months that I’ll never get back.
[Reply]
November 23rd, 2009 @ 4:33 pm
Wow–thank you all for sharing your stories! I feel better all ready:).
[Reply]
June 24th, 2010 @ 8:09 am
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