Creative Credit Card Collection Tactics

[anonymuse]

I just couldn't believe the mail I got from Discover the other day--they are offerring that I only pay 40 cents on the dollar and be dissolved of my debt and they will wipe the credit history clean. On the top of it was a 60 minute long distance card, and if you read the very small print--if you activate the card, it is an agreement to accept the 40% offer from them.

Some of their other stuff has had some very slick brochures with puppies and paw prints all over them. And one was even a handwritten card asking how was I doing.

Wonder who gets to think up all of this creative stuff?

(Chase, on the other hand, basically keeps sending stuff demanding payment--they're just not any fun!)

[Minnymouth]

YES - YES - YES

PAY CLOSE ATTENTION TO THE FINE PRINT.................

They are so full of tricks, schemes, whatever it takes to get you to pay that bill..............

If you read on you'll probably see a clause that states if you accept the 40% payback off, you loose the right to declare bankruptcy on this debt also if you sign the agreement.......

SO CAUTION FOLKS - READ THE FINE PRINT..................

[LostOne0069]

If you read on you'll probably see a clause that states if you accept the 40% payback off, you loose the right to declare bankruptcy on this debt also if you sign the agreement.......

I don't know this, but I'd be suprised if you could sign away your rigt to declare bankruptcy on the debt that easily. I mean, if it were that easy then CC companies would just include the language in their normal agreements, wouldn't they?

[Minnymouth]

Not necessarily, most original contracts would not have this clause in it nor could they put it in it......

But this is a payback agreement (similar to a reaffirm agreement) that they have sent specifically regarding this debt. Such as a pennies on the dollar kind of deal......

In bankruptcy if you reaffirm a debt - then you will pay that debt - bankruptcy or not......

I'm sure it could be challenged in court, at an extra cost, but also it may hold up in Court also like a reaffirm will.............

We'll keep an eye on some of the court cases and see how this plays out under the new laws...........

I will see if I can find a case where this option was presented in the bankruptcy and see what the outcome was.

[LostOne0069]

I don't mean to be doubting you Minny... it's just that it would seem to me to be on very shakey legal ground to have someone who's in a bind sign away their right to declarge bankruptcy on a debt so easily.

I mean, even reaffirmations have to be filed with, and approved by, the court to have any binding effect on you after bankruptcy.

Have you actually heard of a case where a creditor put language like that in an agreement?

[anonymuse]

When I get home tonight, I'll post the complete small print on here.

[Minnymouth]

Yes, please print the small print for us and let us know what it says......

The legality of the document itself could be contested in court and more than likely a judge would dismiss the document......

But the Trustee could push the document since he works for the creditors......

Its something that would be highly debatable in court.

As far as hearing a case like this one - no, not yet - but I have seen where people have claimed BK on a credit card and then afterwards the cc company offers them a new card.......BUT THE CATCH TO THE NEW CARD is that if you accept it you are giving them permission to attach any debts that you might have owed them in the past......

They are not legally billing you for past debts, they are getting you to sign a contract saying that you will STILL be responsible for the debt (even though it was dismissed in BK... then they will let you have another card with them..... TRICKY HUH........

CC companies are trying all kinds of things these days...... it's not illegal.... just close to being so.....

[nervousSC]

I noticed on my very last check advance that I took out (THANK GOODNESS I'M FREE OF THEM), it said in the fine print that by signing I agree not to file bankruptcy. That was advance america.......

[anonymuse]

Here's the letter:

Surely your outstanding debt with Discover has been a source of stress for you. We understand and want to help you feel better about your situation...starting right now.

Call to take advantage of this special offer:

• We will agree to accept 40% as settlement of the balance on your card. *
  
• A 40% settlement means you'll pay just 40 cents on the dollar. That's it. You're done. No more collection calls, fees or worry over this debt.
  
• Call to arrange your settlement payment today

.

You are one phone call away from feeling much better about your financial situation. Your call and payment of the 40% settlement amount will satisfy your entire debt of ths account.

You can also accept this offer of calling 800-xxx-xxx and referencing PIN #xxx to activate the attached 60-minute phone card. ** Then be sure to call no later than [date] to arrange your payment.

This offer is too good to let pass. Please keep in mind: If we don't hear from you by xxx to arrange your settlement payment, we will continue collection activity to secure the full balance. We're sure you want to resolve this matter as much as we do. So why not take a moment and call us today?

Sincerely,


* Upon receipt of the agreed settlement amount, we will send an update to the major credit reporting agencies in your area informing them this account has been settled in full for less than the full balance.

** Please note: When you call xxx and activate your Sprint phone card, you will have also agreed to accept Discover Card's 40% settlement offer.

This is an attempt to collect a debt and any information obtained may be used for that purpose.

[lrprn]

I don't think Discover will miss your 40% at all, Anon. This is from Morgan Stanley's First Quarter 2006 Report (Morgan Stanley owns Discover) at http://www.morganstanley.com/about/i...er/1q2006.html . BE SURE TO READ THE SENTENCE FOLLOWING THE ASTERISKS THAT I ADDED:

"Discover's first quarter pre-tax income was a record $479 million on a managed basis, up 35 percent from $354 million in the first quarter of 2005. The quarter's pre-tax margin was 44 percent compared with 37 percent a year ago. Net revenues of $1,089 million were 14 percent higher than last year's first quarter. ****The positive change reflects...a reduction in the provision for consumer loan losses, resulting from a favorable impact on charge-offs following federal bankruptcy legislation that became effective in October 2005."

Nice to see the billions the credit companies and their lobbyists paid to Congress to ensure passage of the new BK law last fall is showing such an excellent return on their investment, and so quickly too! (Soul-less, greedy bastards.)

[anonymuse]

Yeah, $4000 is a drop in the bucket to them.

But I think it's still kind of amazing how creative Discover gets--I've gotten hand addressed greeting cards and all other kinds of "nice" letters and all I ever get from Chase are standard demand letters.

And even the Discover collection agents have been so much nicer to me. When I gave the guy my BK info the other day that I retained a lawyer, he was very nice and told me that he's was sorry that I must have encountered a difficult situation and sometimes you just have to do what is best for you.