am I right?

[brokeinal]

A friend of mine owed a $43.22 gas bill when he moved. He forgot to pay it. He was contacted by a collection agency and they said he owed $67.83. He went online to the gas company and paid the $43.22, has a confirmation number, all that jazz. They show he owes nothing.

The collection agency sent him another bill for $67.83 and continues to call. I told him that he needs to tell them that he paid the bill, give them the confirmation number and it's their loss. The original creditor accepted the payment, so they're out of luck. He spoke with them and they said he still owes them $12.97 (the difference between the original amount and their amount) and they want him to make a payment over the phone, which I advised him not to do.

Who is right? Any advice on how he should resolve this? He wants to just pay it. It does not appear on his credit (yet).

[justbroke]

If it had been assigned and the the collection agency (CA) said it's $60, but the original creditor (OC) was $40, he can't do an end-around and pay the OC $40 and be done. The CA has earned their money by pursuing the amount. It gets tricky if the CA is only acting as an agent for the OC and has not purchased the debt.

If you want to resolve it, just pay the $13 and be done. Otherwise, this could lead to negative credit reporting, more dunning, and more phone calls.

(To me, this does not read like in-house collections, so this could get interesting if the debt was actually sold. If it was sold to the CA, then your friends owes the additional amounts.)

[brokeinal]

I don't believe it was sold. Here is what their website says:



Collections Services **The Silent Option

When numerous phone calls and repeated billings fail to result in payments, business owners may feel that they have exhausted their options and accept the unrecovered funds as a loss.

However, there is a highly effective alternative to this loss.
XX works on your behalf to recover past due accounts.

XX is noted for its professionalism, courtesy and most importantly, high recovery rates.

Our services represent a "silent option" for your business.
All recovery work is done under the XX name - keeping your company's name and image away from the courts and the public eye. Utilizing the silent option of XXs services eliminates the often fruitless time spent by your staff trying to recover potential lossess.

Accounts placed for collection with XX are collected on a contingency fee basis, so unless we recover money for you and your business, there is no fee.

[justbroke]

Again, "placed for collections" (or those acting solely in an "agent" relationship with the creditor) means that the debt still belongs to the original creditor. If it was "sold" that's a different story. Many credit collection agencies do both.

I don't know why this is a discussion over $13. It's a good philosophical discussion, but what happens to your friend's credit in the meantime? Even if it was not sold, and the original was $40 and the CA earned $20 in pursing the debt -- including skip tracing, phone calls, dunning letters -- your friend may still owe the earned value.

I could see arguing over a difference of hundreds, even thousands of dollars. However, $13 is less than the difference between what they asked for $67.83 and the final bill $43.22! I think that you already got a deal!

[brokeinal]

We're not arguing over it...I just wanted to make sure I was giving him accurate information. I will tell him to just pay the $13 and that I was wrong.

[justbroke]

We're not arguing over it...I just wanted to make sure I was giving him accurate information. I will tell him to just pay the $13 and that I was wrong.

I didn't mean arguing amongst yourselves, but arguing with the CA itself. You may be right, but it really depends on the relationship between the CA and the OC. My post was more about... it's okay to have the philosophical/academic discussion on whether your friend in fact owed the amount to the CA, but it's such a small amount that I don't see why you can't just have the academic discussion and pay the CA anyhow.

I would, however, make sure that the CA issues a written letter indicating that it is paid in full and that they will not report the amount or the collection.

[GoingDown]

Just my two cents worth...

If he had paid the debt through the third party debt collector, then they would have the right to take out their fee and forward the rest onto the original creditor.

They have an agreement with the creditor to do just this, but they have no such agreement with the debtor, and therefore, the debtor owes them nothing.

The debtor never signed an agreement with them to pay them anything.

If the debt collector wants to get paid, they should take up the matter with the creditor. There should have been an agreement between them and the creditor for the creditor to refuse to accept any amount that does not pay off the debt in full plus a collection fee. But since the creditor accepted the amount as payment in full for his debt, the matter is settled for the debtor, and no further payments should be made for this account.

Or at least, I wouldn't pay it.

But is it worth dinging his credit over such a small amount? Probably not. But if they have already dinged it, then who cares? I would not ever pay them.

[ksgirl38]

Just call the gas company and explain that you are being harassed by the collection company and that you paid the amount directly to the gas company already. They should be able to look that up and verify it and then ask them to contact the collection company and waive the service charge amount. Most companies will easily fix this for you. You just have to get someone on the phone that listens.

[GoingDown]

And if that doesn't work, just send the collection agency a cease and desist communications letter by email, and then start recording their calls. If they continue to call after that, the debtor might be able to turn that tiny debt into a $1000 settlement because they violated the F.D.C.P.A. by continuing to call after he told them to stop calling in writing.

[LadyInTheRed]

The original creditor accepted the payment, so they're out of luck. He spoke with them and they said he still owes them $12.97 (the difference between the original amount and their amount) and they want him to make a payment over the phone, which I advised him not to do.

Who is the "them" I bolded? I think you are talking about the gas company, not the CA as people are assuming, but maybe it is me who is misreading. If it is the gas company, they are probably charging late fees and interest to which they are entitled and your friend should pay it.

Either way, I agree that $13 is hardly worth fighting over or risking negative entries on a credit report.