Question: I settled with a creditor for 15K. I have been making all my payments on time for over a year now. They keep sending me letters stating I'm past due and that I owe them 10K more because of late payment default. When I call them each time they tell me the letter was sent out by mistake.
I ask them for a balance statement and they will not provide me with one. Is there anything I can do to find out the balance? I just want the balance info so I can pay them off in full, but I think they intend for me to pay an additional 10. Again, I have never been late with a payment.
Answer: Requesting and getting your balance should be a simple action. Your issue makes me think they are definitely up to something. Going forward, you must get a settlement agreement, in writing, whenever negotiating a reduced account balance or when terms and conditions change from the original credit agreement. That way you will have proof if something goes awry.
Fair Credit Billing Act
I am not sure if this applies because you have settled an account for less, but the Fair Credit Billing Act (FCBA) may be one source you can use to get the balance assuming you are dealing with the original creditor. Request the balance along with an accounting of how your payments have been applied.
The law applies to “open end” credit accounts, such as credit cards, and revolving charge. The creditor must acknowledge your complaint in writing within 30 days after receiving it. The creditor must resolve the dispute within two billing cycles (but not more than 90 days) after receiving your complaint letter. Send your letter by certified mail, return receipt requested, so you have proof of what the creditor received.
Once you get the correct balance, perhaps you should draft a settlement agreement and request the creditor sign it. You want to make sure the settlement agreement contains the words such “payment in full” and “zero balance.” For example, there should be a line in the settlement agreement like this:
Creditor agrees to accept $_______ as payment in full for account number _______. Once creditor receives payment in full, there shall be a zero balance on the account, with no further monies being owed; and the account shall be settled in full.
Consumer Financial Protection Bureau (CFPB)
Another resource may be the newly formed Consumer Financial Protection Bureau. Part of their mission is to administer the Card Act of 2009. The Card Act of 2009 was enacted …to establish fair and transparent practices relating to the extension of credit under an open end consumer credit plan, and for other purposes.”
The Consumer Financial Protection Bureau supervises banks, credit unions, and other financial companies. They enforce Federal consumer financial laws and you can submit a complaint online at http://www.consumerfinance.gov/. Good luck to you.