LAWYER

One day late, yeah right!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

I knew it, I knew it, I knew it!

A couple years ago most credit card banks changed their policy of what "late" means to meaning "one day late is late." It used to be that late was if your payment was due on the 1st but received on, say, the 20th. Not anymore. If you're 24 hours late, it's late, and you will be charged the late fee. Late fees have also been rising and some are now as high as $35!

What did I know?

I had the feeling that since being one day late means that banks can charge a late fee, it's possible that, well, payments could "accidentally" be held for say, oh, 24 hours. Oops, you're late!

My theory was a step closer to confirmation when one of my credit card payments was exactly one day late. I always track everything--every check, every payment date, and all transactions. I use Quicken and other custom software I developed to pay my bills. So when I was late by one day I took a look at the date that bank's check was mailed.

Guess how early I mailed the payment?

Seven days!

The 8th day was the late day. I called the bank and told them that they'd better waive that fee or I would transfer my balance and close the account. They did waive the fee for me, but I wonder how many other people don't call to waive these one-day-late fees?

I wonder how many people simply pay the late fee because they figure "I was late." Being exactly one day late has happened to many people I know. I asked them if they called the bank to complain and they said that they didn't because they thought they were actually late.

Tell you what, being one day late isn't worth 35 bucks! There is no way that it costs the bank $35 for someone to be one day late.

The way I see it is that it's like being mugged in an alley!

As it turns out my theory is even closer to confirmation. Look at those small slips of paper with fine print that come with your statement. Many of those papers are lawsuit notifications from banks that are accused of "not crediting payments promptly," and charging late fees.

The funny thing is that in these class action lawsuits, when the smoke clears, the lawyers get paid millions and most of us only get back a few cents! Every case that I'm involved in, because I'm a cardholder, has been settled without the bank having to admit any wrongdoing.

What can we do?

Be sure to look at every charge on your credit card statement. Don't let the bank get away with charging you a late fee. I don't care if it's really your fault for being late!

First of all, it doesn't matter because $35 is a rip-off for being 24 hours late. And, second of all, the bank should treat you like gold for being a good customer, and should waive at least one late fee as a courtesy even if it IS your fault.

For free information about how we can help you reduce your debt, please fill out our form.

Chase Bank Tries to Pull a Fast One
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

I knew it would happen! I read all the fine print. I reviewed every detail! I followed the instructions from Chase Bank exactly as they described in their low-rate-offer letter and they still penalized me!

How did Chase Bank attempt to trick me and maybe you? I strongly recommend that you read this entire article if you have ever done a balance transfer or you're thinking about doing a balance transfer!

It all started with one of the best credit offers I have ever received. A surprising 0% APR until February 1, 2003 with a one-time fee for each transfer of 4% of the amount transferred, up to a $50 maximum. According to the letter, "These checks may be used for any amount, up to your available credit line."

This offer was received in January which meant 13 months of 0% on my entire credit line of $12,500 (which is available) for a one-time fee of $50. That's a true APR of approximately 0.37%!

I wanted to take advantage of this offer for many reasons.

1) I wanted to see if what they promise in their letters is what they actually deliver when the bill arrives, and report the results to you, my dedicated readers.

2) My money market is getting 2.5% and the loan is costing 0.37%, so I'll be making about $250 over the course of the year for simply paying my bills on time.

3) This offer was slightly different than any transfer offer I've been interested in taking advantage of. It promised that I could use my entire credit line and implied that I can do this without penalty.

I checked and rechecked the letter for any loopholes. I read all the fine print, to be sure that I was using their transfer offer within all the rules described in the letter. Everything seemed to check out, so I went ahead and wrote myself a check for $12,500 and deposited it into my money market account.

When the bill arrived I noticed an overlimit fee of $29 assessed on my account--I KNEW IT! I had a feeling that they left out a few words in their letter that, of course, loophole their way to earning more money.

I followed the directions described in the letter which stated, in three places, that the check amount(s) cannot exceed my credit line and I was still charged an overlimit fee.

I've written about this type of "trick" in a previous article titled, Reading the Fine Print in Those Low Rate Credit Card Offers, however this case was slightly different. The credit offers I was referring to at that time stated in the body of the letter that you can use "any amount up to your available credit line." But in the fine print the letter warned, "You may transfer any amount, including transaction fees that are assessed, as long as it does not exceed the available credit line." Check out the Citibank offer I received that does this exactly.

The offer from Chase however, did not provide that warning. Every mention in the Chase letter about the amount you can use, the total "check amount(s)" is that it can go up to your available credit line.

Compared to the Chase offer, the Citibank offer tries to trick you in the body of the letter, but is at least honest in the fine print. In fact, the fine print in the Chase letter is even smaller than the fine print in the Citibank letter! As my editor Rick said, "It's as though Chase is trying to deceive people more than Citibank."

As soon as I saw that overlimit fee, and reviewed the original letter to make sure I didn't miss anything, I promptly called Chase Bank to have them remove the overlimit fee, which they did immediately.

When I asked why I was charged the overlimit fee, the rep told me it's because I was over the account limit since the $50 transfer charge plus the $12,500 check makes my balance $12,550.00. I explained that the Chase letter stated that I could write the check up to my limit and the rep (Ms. Beers) started arguing with me. I asked to speak to her supervisor (Mrs. Lett) and she also argued with me.

I originally thought they would just waive the fee and apologize for the confusion. I thought they would say something like, "Mr. Bilker, we're sorry that the wording of the letter was confusing. I can certainly understand how you feel. I will certainly bring this to the attention of my supervisors and management so we can review these details. Thank you so much for calling!" Then they could have hung up and forgot about my call--but that didn't happen.

Below are links to portions of the conversation I had with Chase customer service.

Part 1: First rep removes the overlimit fee and argues about the fee.

Part 2: Supervisor argues about the fee.

It may be true that they said I could use the check(s) up to my credit limit. And it may be true that the agreement says that if I go over my limit I have to pay a fee. One could argue that if they told me to write the check(s) up to twice my credit limit, and I did, that I should be charged an overlimit fee because it goes over my limit. The letter could have said to jump off a bridge and if I do it’s my stupidity. However it is certainly implied that if they're sending me a letter, and I follow the directions in their letter, I will not be penalized.

It's clearly stated that if you write a transfer check there's going to be a fee. However, their letter never said that if you write the check to the account limit an overlimit fee will be charged.

This encourages people to write the check up to the maximum limit. Chase never mentioned anywhere in the letter, not even in the fine print, that there would be an overlimit fee if you do as they say and write the check up to the limit.

One good analogy is to imagine a policeman telling me I can go through a stop sign. He says, "Scott, go through the stop sign." So I go through the sign and the same policeman immediately pulls me over and gives me a ticket. I say, "But you told me I could go through the stop sign." And he replies, "It’s common knowledge that it’s illegal to go through the stop sign. Didn’t you read the driving handbook?"

Chase Bank, the policeman of their terms, said to "write the check to the limit" then when I did they penalized me, and probably countless others, who may not have even seen the overlimit charge on their statement. Or maybe they did see the charge, then called and were told they were stupid for going over their limit. It brings to light the fact that you cannot trust what their letters say.

The bottom line in this situation is that the letter is very deceptive. It leads people to believe that they can write the checks up to the credit limit without penalty.

When I called Chase I didn’t have to ask to have that overlimit fee waived. As soon as I mentioned that it was on my statement the rep removed it instantly! If they really believed that I was completely at fault they may not have done this so quickly. Also, the rep and supervisor seemed well versed in arguing their points and my guess is that it’s because they have had practice or training on the topic.

How many of you have had this, or a similar problem? Especially if it was from this very same low-rate credit offer by Chase bank. Let me know if this has happened to you, and please, let me know if you agree or disagree with my position on this issue by filling out the response form.

Lastly, aside from this situation, my past experiences with Chase have been very good. They have always offered me nice lending deals. Giving them the benefit of the doubt, I would hope that this particular situation occurred only because of these specific reps. I would hope that Chase reviews EVERY person's account that took advantage of this offer to be sure that they are not penalized--without that person having to call them first!

Part 1: First Rep removes the overlimit fee and argues about the fee.

Rep: "Card member services. This is Ms. Beers, how may I help you?"

Scott: "Hi, what was your name again?"

Rep: "Ms. Beers. How can I help you today?"

Scott: "Alright. Well I’ve got a question about my account."

Rep: "Okay, let me have your name."

Scott: "Scott Bilker."

Rep: "Okay Mr. Bilker, how can I help you today?"

Scott: "Okay, umm, why do I have this overlimit fee?"

Rep: "Because you are over your limit."

Scott: "Okay. How did that happen?"

Rep: "You did a balance transfer for $12,500."

Scott: "Yeah."

Rep: "Also there is a balance transfer fee of $50."

Scott: "Umm hmm."

Rep: "And that took you over your credit line. Your credit line is only $12,500."

Scott: "Right. Okay well, you see I think that’s an error because I have the letter from Chase. You know I used one of these balance transfer checks Ms. Beers. It says these checks maybe used for any amount up to your available credit line. What was my available credit line before I wrote that check?"

Rep: "Up to. Your credit line is only $12,500 sir."

Scott: "Yes, but these checks may be used for any amount up to your available credit line. My available credit line was $12,500, I wrote the check for $12,500."

Rep: "That’s the credit line sir, and of course you know you are going to go over your credit line. You can’t take it all off of there, you’ve got to leave something there for the fee…"

Scott: "Uh, listen…"

Rep: "Also for the finance charge. I did give you back the $29 overlimit fee."

NOTE: Notice how she removed the charge without me even asking!

Scott: "Okay."

Rep: "It’s already been deleted. But you should have left a little room there for finance charges and also for the fee."

NOTE: She keeps blaming me for following the directions in the letter!

Scott: "Don’t you think the letter should say ‘You should leave a little room there. You shouldn’t write the checks up to your credit limit, maybe up to your credit limit minus the fee.’"

Rep: "Okay, but the fees are in the letter also."

Scott: "Yes, but it says these checks may be used for any amount up to your credit line. Doesn’t that give you the impression that you can write the check, well, up to your available credit line?" (Pause) "Hello?"

Rep: "Sir, it’s in the letter. Okay, again you used your whole credit line, of course you are going to go over your credit line if…"

Scott: "I know, but I am just concerned about the wording. I mean, if it said…"

Rep: "Mr. Bilker, if you weren’t sure about how much you should use on the checks you can always call us, 24 hours."

NOTE: No need to call because the letter said I can write the check up to the limit.

Scott: "Right. Well it was very clear, I mean it said up to the credit line. I know you removed it and I appreciate that, but I just want a little clarification of the writing there. Because, you know, I don’t know what to believe anymore. I mean, it said…"

Rep: "Sir, you wouldn’t take your whole credit line. If you know your credit line is $12,500 and you go over that, and you take that whole amount it is going to go over."

Scott: "It doesn’t…"

Rep: "You can go 'up to,' and you should never take the whole credit line because, yes, you will go over and receive the $29 fee on that."

Scott: "I just don’t see where it says that. Like even in the fine print here it says ‘balance transfer check amounts may not exceed your available credit line. It doesn’t say valid balance transfer check amounts and charges may not exceed. It says the check amounts."

Rep: "It told you not to exceed the whole credit line Mr. Bilker."

Scott: "Well, no. It says the check amounts, the check amounts, not the…"

Rep: "You go over the $12,500…"

Scott: "I didn’t. I wrote it for $12,500."

Rep: "Well, it’s $12,500, you took your whole credit line. That’s going to take you over the credit line."

Scott: "But it said I can use up to my available credit line."

Rep: "It says 'up to,' sir, it doesn’t say take the whole $12,500."

NOTE: Talk about double-talk!

Scott: "Up to means… Well you know what, I know you waived the fee and that’s great, but I’d like to talk to a supervisor about this."

Rep: "Not a problem, hold on."

Scott: "Thank you."

Part 2: Supervisor argues about the fee

Rep: "Mr. Bilker thank you for holding the account supervisor Ms. Lett is on the line. You may go ahead."

Scott: "Thank you Ms. Beers."

Rep: "Mr. Bilker this is Ms. Lett, how may I help you?"

Scott: "Hi. Well umm, I called because I used a balance transfer offer from Chase and umm, I got charged an overlimit fee. Although Ms. Beers did waive that overlimit fee."

Rep: "Umm hmm."

Scott: "But I’m just a little confused because the letter specifically states that I can use my checks up to my available credit, and that’s exactly what I did. I followed the directions exactly, but yet I was charged an overlimit fee."

Rep: "Okay. You can use the checks up to that, but with each check written there is a fee."

Scott: "Uh huh."

Rep: "So according to the amount you write, you include the fee."

Scott: "It doesn’t say what you just said."

Rep: "It doesn’t have to say it, it’s telling you that there is a fee involved."

Scott: "Yeah, but it says, let me just read this really clearly, it says, ‘These checks may be used for any amount up to your available credit line.’ In fact it says, at the bottom in the fine print, ‘balance transfer check amounts may not exceed your available credit line.’ Check amounts, it doesn’t say check amounts and fees."

Rep: "Right, the check amount cannot exceed your available credit line. However, it also goes on to say, ‘With each check processed there will be a transaction fee.’ So included with the check amount there is a transaction fee that you have to include. If you are going to write three checks, you write three checks that are going to be up to whatever your credit limit is. But in those three checks, remember, there are three fees. So its just common knowledge."

NOTE: Step one of their defense it to insult the customer. Don't you just LOVE these people. Way to treat your valued customers who don't have common knowledge.

Scott: "Common knowledge? Well, even on the fine print on the back it says balance transfer check amounts… This is right after the fees, it says, ‘You will be charged a balance transfer transaction fee,’ and it gives the amount, and afterwards it says, ‘Balance transfer check amounts may not exceed your available credit line.’ It does not say balance transfer check amounts and fees."

Rep: "It doesn’t have to. It’s explained and it’s outlined for you. If you know your credit line is $12,500 dollars, and they tell you that you are going to be charged a fee. And you write a check for $12,500 dollars, plus the $50 fee, you are now over the $12,500, because that is all that your credit limit is."

Scott: "But it just doesn’t clearly say that. How could this be common knowledge? That’s my confusion. It says, the directions…"

Rep: "Because if we tell you that you are going to be charged a $50 dollar fee. If you write a check for $12,500 and we have told you that we are going to charge you a $50 fee, $12,500 plus $50, is $12,500 and $50. Which means you are now over your credit limit. That’s what I mean by common knowledge. It’s simple math."

Scott: "Well how come that common knowledge isn’t included in the statement? See, the statement clearly says these checks maybe used for any amount up to your available credit line. Common knowledge tells me that…"

Rep: "Well okay…"

Scott: "That I can use it up to my credit line. It doesn’t say, not up to my credit line, it says up to my credit line."

Rep: "And when you use that check you’re charged a fee."

Scott: "Yes, but it doesn’t say…"

Rep: "Well, that’s included with the amount of the check."

NOTE: The fee is not "included with the check" it's a separate charge.

Scott: "Well, shouldn’t it say not up to your available credit line, or close to your available credit line? Wouldn’t that be a little more clear?"

Rep: "I guess it’s the way you interpret it."

….

Rep: "It is your interpretation Mr. Bilker. Unfortunately, you did not read the entire thing, or did not understand it."

NOTE: Still blaming me for their deceptive wording. I wish I had that Citibank letter handy when I called so I could have asked Mrs. Lett to explain why Citibank clearly explains to keep the total of the fees and transfers under the available limit.

Scott: "Where in this thing does it tell me I cannot write these checks up to my available credit line?"

Rep: "It doesn’t tell you that you can’t. We can’t tell you what you cannot do."

Scott: "Listen, it says...‘These checks may be used for any amount, up to your available credit line.’ It doesn’t say these checks and fees. These checks may be used for any amount. And listen, again, at the bottom, balance transfer check amounts, it doesn’t say balance transfer and fees, just balance transfer check amounts, may not exceed your available credit line."

Rep: "It doesn’t have to say ‘and fees’ because the fee is already included with the amount that you write."

Scott: "Hmm, really it sounds like some kind of trickery to me."

Rep: "And again that depends on your interpretation."

Scott: "Hmm, I wonder what a legal interpretation might be? Like disclosure interpretation."

Rep: "We have a lot… Everything we submit goes through a legal ramification before it is ever sent to you. So, obviously it must be legal. This is a major bank. And they have a lot of lawyers…"

….

Rep: "When it says to me that if I write a check up to my limit and I am going to be including a fee, and I know that my limit is a certain amount. If I’m going to be charged a fee, I know already that I’m going to go over my limit. If my limit is $10,000 I’m going to be charged $50, I know my limit is $10,000 and my balance is going to be $10,050. I already know that."

Scott: "So, all those extra words you just told me should basically be included in this letter?"

Rep: "There is nothing extra that I told you. I added it."

….

Rep: "If you can add, then you don’t have a problem with that."

NOTE: The blame-the-customer-defense continues, now I can’t add.

….

Scott: "But it does not tell me, if you write the check up to your limit, then you will go over you limit. You cannot write your…"

Rep: "It doesn’t have to."

Scott: "It doesn’t have to! How do you…"

Rep: "We give you your credit limit, if we tell you that your credit limit is $12,500. We tell you that you have $12,500 that you have $12,500 to use, you can do whatever you want with it. You can write this check if you want, but when you write this check there will be a 4 percent transaction fee with a maximum charge of $50. Now if you sit down and write a check for $12,500 and know you are going to be charged $50 you have now gone over your limit. If you add the amount that you wrote your check for, plus the $50 fee that you are going to be charged, you are now above $12,500."

….

Scott: "Well, I think that they ought to change the wording here because it’s really confusing people."

Rep: "Well Mr. Bilker you can write in and tell the bank that you want them to change the wording."

Scott: "They should definitely change the wording. I think this is quite confusing, since when you say, ‘You can write your checks up to your credit limit,’ and you do that, it doesn’t anywhere, anywhere in this letter, say that if you write your checks up to your credit limit you will go over. Is that true that statement?... it doesn’t say anywhere that if you do that, you will go over your limit because of the fees. I think that should be in there that would make it quite clear. Don’t you agree Ms. Let?"

Rep: "I don’t agree with you."

Scott: "Okay. I just don’t understand how you can’t see it."

Rep: "Well, you see it your way and I see it my way. We can look at the same thing and see two different things and I guess that’s just the point where we are."

Scott: "You’re seeing a lot of extra words that don’t exist in the letter."

Rep: "No, I’m just seeing that if I add how much I wrote a check for and add the fee that the bank is charging me I have now gone over my credit limit. That’s all I did."

….

Scott: "Well you see, communication is the responsibility of the communicator. And this wasn’t communicated very well."

Rep: "Well, I am very sorry that you feel that way. But that is the way that the bank sends their information. They do advise you of any fees up front."

….

Scott: "When I have my credit card, my physical card, and my limit is $12,500, and I go into a store how much can I spend? How much?"

Rep: "If you pay your balances in full, $12,500."

….

Scott: "So you’re telling me that Chase tells me that I can use my credit card up to the limit, right?"

Rep: "The credit card, yes."

….

Scott: "So, in that case up to the limit means up to the limit. But in this case (the credit offer in the letter) up to the limit means not up to the limit. Even though the words are the same, you’re telling me that when they say up to the limit then…"

Rep: "The words are the same, however, it says up to the limit. These says up to the limit including with a fee."

Scott: "No."

Rep: "Yes it does."

Scott: "No, you said it."

Rep: "You’re going wrong."

Scott: "No, that’s where you are going wrong. You said to me, just a second ago, up to the limit including the fee..."

Rep: "Okay, and again it’s your interpretation. I cannot continue this."

….

Rep: "Thank you for calling customer service."

Scott: "Bye, bye."

Rep: "Bye, bye."

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Giving Up Your Rights--Without Knowing It!
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

If you have a Capital One credit card, then I highly recommend you read this entire article!

I just received a letter from Capital One informing me that "enclosed is an important legal notice regarding arbitration" and I need to "read the entire notice to fully understand its implications" to my account.

This isn't the easiest reading by the way. It's a legal notice, written in legal language at the college graduate level. Quite different than the 6th-grade level credit offers they send me trying to get me to use my credit lines.

Here's an example from the arbitration letter: "The arbitration of any Claim must proceed on an individual basis, even if the Claim has been asserted in a court as a class action, private attorney general action or other representative of collective action."

Oh yeah, makes perfect sense to me.

Here's an example of the writing that's meant for me to easily understand (from a credit offer): "One of the attached Purchase Checks is already made payable to you. Consider using the other check to purchase something you've always wanted. It's that easy!"

Gee, I can understand that no problem. Why the difference in writing style? Could it be that in one case it's meant for me to be confused and in the other they want me to spend money on my credit lines? Could it be that both cases are written to work in Capital One's advantage? We both know the answers to those questions.

Here's the bottom line on this arbitration letter: if you do not reject the Arbitration Provision then it becomes part of your account. It's a "negative offer" similar to the music clubs that automatically send you the "CD of the Month" unless you tell them not to send it.

So what's the Arbitration Provision? It means that if you have a dispute that's listed in what they consider to be a dispute, the matter is taken to an impartial person, or group, to be resolved. Of course, you can choose your arbitrator--from their list.

It means that if you allow this provision to become part of your agreement you will not have the right to take your claim to court or participate in a class action lawsuit. And it may cost MORE to go to arbitration, probably because your attorney's fee could be covered for many claims, like say a class action lawsuit.

You may ask why it's important retain these rights?

First of all, I don't want to give up any rights unnecessarily, but more importantly is that although we are only going to recover pennies in a class action lawsuit, it's still in our best interest to be a part of these cases. Sure, the lawyers get all the money, but these lawsuits are one of the best defenses to keep the banks in check. It reminds them that they need to obey the law or they'll pay!

Here is a list of some of what they'll consider a "claim" (dispute you have with them or they have with you): Transactions or attempted transactions on your account.
Any billing or collection matters.
Any fees, interest, or their calculation.
Any products, services, or benefits programs in connection with your account (any insurance, rebates, rewards, etc.).
Any posting of transactions (including payments and credit) to your account.

I called their contact number in the letter to ask questions but only connected to their recording system that delivers answers based on a phone menu. In others, words, I couldn't reach a human--no surprise there.

I would urge you to STOP the Arbitration Provision from becoming part of your credit card agreement! I don't see it as being in our favor at all! If you have a Capital One account and accidentally threw out that letter, listen to the recording at 1-888-578-5462 to learn how to reject the provision.

Here's the general rule: When businesses spend money to send you an offer it's usually in their best interest and probably not yours. There are exceptions; however; I always approach all offers with a level of skepticism.

I have received term changes from other credit card banks which, if rejected, mean that the account is closed. The only consequence of rejecting the Arbitration Provision, which I saw in the letter, is that it doesn't become part of your account terms.

Let's look at this from Capital One's point of view. They're lending money to many people who are going to stiff them in bankruptcy court. I can understand why they need to protect themselves, however, they must treat us "DebtSmart" customers with respect. We are their best clients, and we need to stick together to show all the banks who's really in control--who's paying their salaries!

Don't give up any of your rights!

To reject the Arbitration Provision you must follow the detailed directions for completing the "Arbitration Rejection Coupon" that accompanies the notification letter.

Although I feel like they are trying to pull a fast one here I still like Capital One and recommend their credit card because the interest rates are generally lower than other credit cards. In their defense, on this Arbitration Policy change issue at least they indicated all the salient information in bold print on the envelope and in the letter.

By the way, the deadline for reject the Arbitration Provision is 1/31/02

For free information about how we can help you reduce your debt, please fill out our form.

Fighting an Increasing Rate
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I had a card that had a fixed rate of 5% on my balance. I closed the account years ago when I started taking control of my debt. Since this was the lowest rate of the cards I had I was only paying the minimum and concentrating instead on paying off other high interest credit. I received a notice with one of my invoices that they would be increasing the rate to 20% and that I basically didn't have a choice in the matter (fine print). I transfered the balance over to other cards that would have a lower APR than the 20% they would be imposing however this severely limited my available credit for emergency purposes.

Just wanted to know if it is legal for them to increase the rate on a closed account and if there was any other option for me to consider. Obviously this would be information for any future similar situations. Thanks!
--Mike

Answer
Mike,

Do you have the original paperwork that gave you the fixed rate of 5%? I truly hope so because it's that documentation that could ultimately help you keep that rate. The only problem is that you did transfer the balance but you did so because you thought they wouldn't keep the rate at what they promised.

I see this happen frequently that's why I ALWAYS keep copies of the letter, terms, conditions, etc. in my files for just such a situation. I even photocopy applications!

If this happened to me, and I found evidence that they couldn't raise the rate, then I might even contact a lawyer and see what could be done. I would also contact the Federal Trade Commission and other consumer groups to see if they could help me make the bank honor their agreement.

For the future...get everything in writing and keep it in a file!

Good luck and please let me know what happens.

Scott

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Collection Company After 23-Year-Old Debt
by Scott Bilker

Scott Bilker is the author of the best-selling book "Credit Card and Debt Management." He is also the Editor and publisher of the FREE DebtSmart® E-mail Newsletter (http://www.debtsmart.com). Sign up today!

Scott,
I received a letter telling me that I owed a debt of $535.73, but, "if I paid $214.00 immediately," they would cancel the debt. I cannot recall owing this debt. It was made, according to the company (I called this AM) in 1980, under my husband's name. We retired in 1978 and live on Social Security. He has never had a credit card and I have always taken care of our money, since he was in the Marine Corps and overseas so much. I have checked through as many old papers as I have and can't find this debt. When I pay a card off, I always cut it up. I have no cards now, and pay everything by check. Can they collect on a debt this old? I asked them to send any paperwork on this debt to me, but they said, "if I refuse to send a check at once," they will take me to court! What must I do? Thank you for your advice!
--Marjory

Marjory,

Disclaimer: Let me first say that I am not a lawyer. You should always seek the advice of licensed attorney in your state. This response is Scott's interpretation of legal issues and is for your entertainment only.

My impression is that you're dealing with an unscrupulous debt collection company that, quite frankly, may be lying about the debt! Be very careful not to disclose too much information to these people because you cannot trust them!

Do not send them any money! Do not give them any information about your checking account or any other accounts!

If the debt they are calling on is real, and 23 years old, it's going to be far past the statute of limitations in SC (10 years). You can send them a letter stating that, "This debt is past the statue of limitations and not legally collectable. Have a nice day. :)"

In the case that they claim it's not an old debt you are still protected against many debt collection tactics by The Fair Debt Collection Practices Act (FDCPA). This law requires many procedures to be followed by debt collection companies, and it seems that the company which called you violated it immediately.

Validation (Section 809a): Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, give you information such as the amount of the debt; the name of the original creditor; a statement that you have 30 days to dispute the debt; among other items. You can see the entire law by clicking on its hyperlink in the previous paragraph.

And if you ask, they have to prove it! Section (b) states, "If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector."

In your first conversation they threatened to take legal action when you asked to provide proof of the debt. Legally, they must give you that information. The next time they call tell them that according to the FDCPA, section 809a, they have 5 days to give you information about that debt.

After they send that information, dispute the debt. This will force the debt collector to do more research. Then, if they provide some paperwork about the original debt, you'll be able to better verify its accuracy.

Since the debt is probably not valid, you could simply send them a cease-and-desist letter as pursuant to 805c. Write that you want them to stop contacting you for any reason. However, there are some reasons that they can contact you again like to let you know that they're not going to contact you again or they're going to take some other legal action.

Please let me know what happens with your situation.

Good luck!

Scott

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