Legal Question in Credit and Debt Law in Iowa
Theft by Collection Agency
My question pertains to my rights in a collection action. This began LAST May. I had a unpaid phone bill go to collections. The collection agency required my to send six postdated checks, one for the 20th of each month for six mos. in the amt of $15. In Aug I moved and switched bank accounts. I notifyed them and was instructed to send two postdated checks from my new acct and that they would send the old ones back. I did this and then on the 15th checks were cashed from BOTH accts. I incurred a $22 fee from the bank with the closed account. I told them of this and was told I would be credited twice, but never was. Then I received a settlement letter about two wks later and accepted, with a representitve's assurance that I would receive the old checks back. I never did. On the 15th, they cashed a check AGAIN, for which I incurred another $22 fee for insufficient funds. I called the agency and was told there was nothing they could do about the fee, but that they would refund the $15. They never did. Yesterday I received a letter from a NEW collection agency on behalf of the same phone co., stating I owe more money. I can't reach anyone at the new place, what am I to do?
2 Answers from Attorneys
What am I to do....
Try writing to both collection agencies using certified mail, return receipt requested, rather than relying on undocumentable telephone conversations with strangers who you can't trust and may never find again. You should request in that letter printouts or copies of all charges and payments on your accounts--written verification of the debt(s) you supposedly owe. To avoid any further overdraft charges on you bank account, don't send them any more postdated checks or checks of any kind until you get the original ones back--too many checks for the same payments lead to the problems you are now facing. You could have the bank stop payment on the checks already sent but that will cost you "stop payment" fees probably equal to or greater than the $22 overdraft charges. Recommend you consult an attorney in your own state regarding your rights under the laws unique to your own state
Maybe stop payment on all outstanding checks, for now.
It will cost you! (I know, you probably can't afford that,either.)
Here's a cheaper way: close both accounts. Just be sure not to lie to the bank if they ask you in writing if there are outstandingchecks. You could essentially tell them that someone got ahold of your checks inappropriately and is cashing them and that's why youwant to close the account(s). I'd say be straight with them and tell the whole story.
I thought you closed the first one. How was the bank able to chargeyou when you had no account there any more? Maybe they didn't havethe right to do so. Can you simply leave that first bank entirely?
You should expect to be able to charge them THEIR interest rate for the money they held ahead of schedule, etc. (Whoopee, $2 in all, I suppose,but the idea will intrigue them.)
There are federal laws on unfair credit collection practices, but I can't cite them for you offhand.
Anyway, combine my advice with the last guy's advice, to keep all communicationsin writing and to keep record with return receipt of things you tell them, and to demand an accounting. You must keep on top of this or your lose your rights, actually.Typically, one has only 30 or 60 days after receipt of an erroneous statement toget on record (YOUR written record backed up by the return receipt postcard!)objecting or you can lose your right to object!
Frankly, I don't pay collection agencies ever, or almost never. When they startto bug me, I tell them I just paid the people I owed it to, and then I try to do so unless those people won't accept it. It cuts the agency out of their fee if they'reworking on a percentage basis. If they instead bought the bad paper, so to speak, thenthey're entitled but the company I was originally doing business with can straightenit out with them. You might want to consider at least talking to your original creditorand trying to pay them if you're not now doing so.
Don't ever write out post-dated checks in the future. The fact is, there's no law or even bank procedure preventing someone from cashing a post-dated check in the presentand they can cash all of them at once. These folks didn't do that, so you're lucky, but it isn't the way to go. Furthermore, whatever demand they had to force you to do that probably had no teeth; for example, if they claimed they'd ding your credit reportif you didn't do it, they were probably lying -- excuse me, bluffing.If they merely convinced you that it would be best for you to have it all taken care of,they may have been right but it's still a bad practice.
Don't listen to me! I'm not qualified in your state's laws!
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