Patience and Persistence

A Provanta Debt Settlement client had an major credit card account with a large balance ($10,214.13) and was concerned he’d be vulnerable to a lawsuit because he was a homeowner.  Three months ago, client indicated that he’d be happy to settle for slightly above our guideline as long as it could be done quickly, and provided some additional funds to help out.  Our negotiators responded with an even more intense effort, since the extra funds provided leverage for a quick settlement.

The collection agency in charge of the file was playing hard ball, though.  The first month they insisted upon 60% of the current balance.  Both Provanta and the client agreed that without an active litigation process, 60% was too much for a settlement.  Though it was difficult, the client agreed to wait it out.

The next two months were a series of back and forth moves, gradually eroding the agency down to 50%, and then 40%.  At the end of this period, the agency admitted that they had purchased the account from the original creditor.

If an agency owns the account, it means they only have themselves to satisfy.  No major banking client needs to be pleased; it is entirely up to them to recognize a good settlement when they see one.  The lead negotiator knew the jig was up and made it clear that no more than 30% of the current balance would be paid on the settlement.

After another several weeks of holding out for 40%, the agents announced on the morning of June 30th that under no circumstances would they accept 30% for a settlement.  By 3:30pm, they wanted that money and the following morning a settlement letter arrived stating that $3,000.00, or 29.37% of the balance, would be accepted.

Patience and persistence paid off.

Technorati Tags: debt settlement results, debt settlement percentages, debt settlement offers, debt negotiation process

Turning The Tables

Many collection agents and creditors don’t like dealing with settlement companies.  We are just as persistent with calling and leaving messages for them as they are to debtors. After awhile, they’ll give up and speak to us, especially if they have no luck in contacting the debtor directly.

Last week, one of our negotiators was asked by a debt collector to please stop calling and harassing him…

Technorati Tags: debt settlement, debt forgiveness, debt collectors

Getting Past the Fist Line of Defence

Provanta Debt Settlement negotiators receive hundreds of calls each month from creditors and collection agents.  Oftentimes, these front line agents have limited authorization to accept the low settlements that we achieve for our clients.

The agents who make the first call on a case are usually not the same people who make the decisions about accepting funds for settlement.  These agents are usually hemmed in by some sort of standardized speech about how if you don’t pay they may recommend litigation against you to their client, etc., etc.  Sometimes,  the first trick to getting a settlement is to make it past that first caller and speak to a supervisor, or at the very least, get that agent to pass your information along to a supervisor.

In one case, one of these agents contacted a Provanta negotiator, saying he was required to stick to a guideline of 50% of the current balance.  The negotiator wheedled and cajoled, until the agent agreed to submit her much lower offer of 30.99% of the current balance.  After a few minutes, the agent returned to the line to announce that 30.99% was an acceptable settlement and the client saved $2,082.05!

Even if a negotiator doesn’t get a settlement on the first call, it’s a mini-victory if the agent agrees to submit the offer for manager review.

(Ref. 1529)

Technorati Tags: debt settlement results, debt settlement percentages, debt settlement offers, debt negotiation process

Term Settlements

Oftentimes, Provanta Debt Settlement negotiators are able to reach a settlement on an account with term payments.  Mostly, these types of settlements are paid in four months or less.

Recently, more so than before, agents are making settlement offers and extending the offer out to as many as sixteen payments.  Less than a year ago it was difficult — but possible — to get an agent to extend an settlement out four months.  Now they’re offering six, twelve and as much as sixteen month arrangements.  While this shows us the agents have came to terms with the benefit of debt settlement, this is not particularly beneficial to our clients. The future is unpredictable, and to make a commitment that extends out more than four months is setting our clients up for failure.  The gesture is appreciated, but not particularly useful — though it does come with a general flexibility that’s far easier to work with.

Technorati Tags: debt settlement, debt forgiveness, debt collectors

Educating Collectors

A Provanta negotiator received a call regarding a five year delinquent account on a client that resides in California.

The original balance on this account was $15,744.00 and the current balance is $16,555.00.  Provanta made an offer for settlement in full at $4,723.20.  The collection agent counter offered at $10,761.00.

Our negotiator informed the agent that the client has a current debt load of $89,563.41, and $4,723.00 was all the funding available.  We informed the agent that this account was possibly past the statute of limitations, which in California is four years.  The agent’s response was “we know the account is past statue of limitations and that’s why we want to resolve it now, before it goes to litigation.”  In shock our negotiator gave the collector and brief layman’s education on statue of limitations. The collectors response then was, I will have my manager call you back in the morning to discuss the account.

Hopefully the manager will have more knowledge than the collector.

(Ref. 1527)

Technorati Tags: debt settlement, debt forgiveness, debt collectors

Outrageous FDCPA Violation

As I was reading an article about a $200 million lawsuit that the FTC and FDIC are jointly trying to file against a major, publicly traded credit card marketer and its debt collection agency for deceptive marketing and numerous FDCPA violations, a Program Manager popped her head in my office to let me know that a collection agency is calling our client’s neighbors and leaving notes on the neighbor’s door about our client.

I am amazed.  The above referenced companies are facing a $200 million lawsuit for FDCPA violations.   The FTC reported in it’s Annual Report 2008: Fair Debt Collection Practices Act that in November 2007, the FTC won a lawsuit against another collection agency for misleading, threatening and harassing consumers.  This collection agency was ordered to pay over $1.3 million in fines to settle the case.  A popular political topic in this year’s presidential campaign has been the credit card industry and America’s growing debt problem.  With all of  this going on, I am amazed that there are still some credit card companies and collection agencies with the audacity to so blatantly violate our client’s basic consumer rights and not think twice about it.  Did they not get the memo on what’s going on, or do they simply think they are above the law?

Well, be assured that we are working very closely with the client to help her through this troubling incident.  She is just as angry as we are about the situation and she plans to file an official claim with the FTC against the collection agency.  I hope that others who have had such an awful experience will do the same so that FDCPA violators can be penalized for their behavior.

(Ref. 1518)

Technorati Tags: FDCPA violation, creditor harassment, FTC debt collection complaint, collection agency abuse

Can We Reach an Understanding?

A large collection agency and debt buyer called regarding a Provanta client’s delinquent account.  The original balance on the account was $298 and the current balance is $745.00.  Our negotiator offered to settle the account in full for $179, the agent countered at $250.  The negotiator declined his offer informing him that the client is a homemaker and her husband is on Social Security which is their only source of income.  We made it very clear that we can only offer what is available.

The agent called back five minutes later offering to settle for $450 over 2 months.  Again we declined his offer based upon the clients financial situation and funds available.  once again less than five minutes later the agent called for a 3rd time.  His offer this time around was $224, we advised yet another time all that was available for settlement was $179.

This collector’s offers fluctuated, the funds available for settlement remained the same. After the 3rd call, I hope the agent understood this.

(Ref. 1516)

Technorati Tags: debt settlement, debt collection

Convicing Creditors

Sometimes convincing creditors to settle is unbelievably difficult, and the only way to overcome their reluctance is a persistent attitude.

Recently, a major creditor neglected to respond to all settlement offers with anything other than a canned letter requesting redundant copies of a limited power of attorney and/or client information we cannot disclose.

In response, we add dozens of accounts to our bulk offer list each month to reinforce the idea that by refusing to cooperate, they are turning their backs on potential revenue. This month, for example, if this creditor accepts 50% settlement offers on the 104 clients who have open accounts, they stand to make $80,000! With some foresight, they will see the light.

Technorati Tags: debt settlement, debt collection

Trickery

As a client of Provanta, or if you are in the process of evaluating which debt forgiveness program is for you, you must watch out for tricky creditors!

You are the first line of defense against their attempts to collect , and you must guard your information carefully. The best way to protect yourself is by denying creditors all information execept how to contact Provanta.

Learn from the experience of a Provanta client , who was persuaded into disclosing how much she had in her settlement savings account by a wiley and persistent agent. When Provanta negotiators tried to make a deal on that account, creditors wanted the full amount the client had mentioned rather than the lower amount they probably would have accepted according to the past settlement history with that company. Although a settlement was ultimately reached, Provanta could have done better if the client had not communicated with the creditor. You are your own best guard against tricky creditors! Give them nothing and send them to the expert settlement team at Provanta.

(Ref. 1514)

Technorati Tags: debt settlement, debt collection,

Fighting Fire With Fire

Sometimes, it’s like a battlefield…

In October 2007, Provanta negotiated a settlement on a $12,900 account with a collection agency who was representing the original creditor.  As with all settlements, Provanta required the collection agency to supply a written settlement agreement before any payment to them.  We received the written agreement, sent the settlement payment of $5,600 to the collection agency, and saved our clients a gross amount of $7,300. 

Three weeks later, Provanta received a call from a supervisor at the collection agency.  She informed us that the original creditor recalled the account and as a result they could not proceed with the settlement agreement.  This was completely unacceptable to Provanta, for we had a valid, signed settlement agreement that was in already in place, performed upon, and the payment accepted. 

To make matters worse, the original creditor sent the account to a collection attorney who threatened to sue our clients unless they paid the balance in full.  This was the last straw for Provanta, and we contacted an attorney that we have worked with for many years.  He specializes in consumer law and FDCPA, Fair Debt Collection Practices Act, violations.  He was more than happy to assist our clients. 

It took about 6 months and lot of letters to reach an agreement but we finally did.  In the end, the collection attorney agreed to accept the $5600 original settlement agreement, or deal with a lawsuit against themselves, as well as the original creditor, should they persist.

Technorati Tags: FDCPA, Fair Debt Collection Practices Act, debt settlement, accord and satisfaction, consumer law, consumer protection, FTC

(Ref. 1506)

Confused or Dishonest?

A collection attorney from the state of Florida called Provanta in regards to a delinquent account for one of our clients in another state.  Our negotiator made a calculated offer of around thirty percent of the current claim to settle the debt in full.  The attorney countered at seventy percent, to settle.

Our negotiator asked why he was demanding such a “high amount” to settlement the account, considering the fact that there are other creditors, and it’s our job to find a Pareto optimal solution, of sorts.  The attorney responded, “…because we have filed suit on the account.”  Our negotiator then asked in which state the suit was filed (The negotiator knew the attorney was not licensed to practice law in the same state where the client resided). The attorney replied: “Florida.”

Our negotiator asked the attorney for additional information, such as the docket number and the date the client was served, etc.  At this point the attorney became confused with the questions presented, not being used to being challenged on a common debt collector ruse. Once our negotiator informed the agent that our client doesn’t reside in Florida, the frustrated attorney hung up.

Technorati Tags: debt settlement, financial hardship, debt collection, debt collection attorney

(Ref. 1503)

A Common Creditor and Collector Ruse

Occasionally a client will wish to close one of his credit card accounts that had previously been included in his debt settlement program. When asked for the reason, the client typically informs us that the creditor claims they do not work with companies like Provanta (we can always prove otherwise), but that the creditor is wiling to work something out with the client directly. As a result, the client then wants to try to settle this particular account on his own. 

The collection agent is being less than honest with our mutual client.  In this situation, we must explain that creditors will often do or say almost anything to avoid having to work with companies like Provanta, because they know our goal is to achieve for our clients the lowest possible settlement, and we’re extremely effective at it. And it’s not about simply saving the most money, but rather to get the settlement figures low enough across the board, in order to settle all the accounts in a structured way that’s equitable for all. But collectors, whether part of the original creditor, or an agent, often prefer to work with the client directly, bypassing Provanta, because negotiating with a client who’s a novice to debt negotiation is easier than negotiating with our trained professional representatives who’ve “heard it all a million times.”  The creditor has a better chance of getting more money directly from our client than through our program, resulting in an inequitable result when considering the portfolio as a whole. They’re just trying to jump to the head of the line.  

It’s important that our clients understand that though they have the final say in everything, Provanta is unable to work effectively if the client is undermining our efforts by communicating directly. Moreover, doing so only encourages the creditors to keep calling and pushing, trying to undermine the our client’s confidence in Provanta. It becomes a self-fulfilling prophecy: the creditor or collector refuses to deal with Provanta, because they don’t need to, because they can deal direct. I can’t blame them, but this is a direct effect of the creditor/collector’s ruse, and the client falling for it. By giving their creditors the silent treatment, our clients are sending a message loud and clear: that they are committed to the debt settlement program, and that the fastest way for the creditor to get resolution and some recovery is to work with Provanta. 

Technorati Tags: creditor harassment, debt collector harassment, FDCPA, Fair Debt Collection Practices Act

Hardship

One of Provanta’s settlement negotiators received a call on a client’s behalf from a collection agency. This was on an account with an original balance of $1,406 in May of 2007 ( a year ago, as of this posting), and this balance — or, really: claim — has since grown to $2,050, an increase of 46%. The agency is now the successor in interest, i.e., they purchased the debt — likely for only a few cents on the dollar based on the 1400-figure.

Our negotiator informed the collector that another collection agency had already and recently accepted a settlement offer on another of the client’s accounts, and that no funds are currently available. This debt buyer adversary was none too please at receiving this information, and thereupon demanded that our client begin making minimum monthly payments. This is something we hear from collectors and creditors on a daily basis, of course. Our task, then, is to get them to understand that all of Provanta’s clients are in our program due to financial hardship and cannot commit to minimum monthly payments — promises they can’t keep — on all their obligations; i.e., settlement is the option they’ve chosen, and typically so over a quick and easy full discharge of all unsecured debt through bankruptcy proceedings.

Our negotiator then explained the client’s hardship to the collector, which is one of a common and typical nature for many of our clients. Many of our clients begin their financial decline through divorce, one or the other typically becoming responsible through court order for debt incurred within the marriage. This particular client owns no real estate, has no liquid assets, and owes in excess of $50,000 in delinquent, unsecured debt.

After the collector ran through the usual gamut of scare tactics, including commencing litigation (cheap threat: equivalent to a debtor threatening bankruptcy right out of the gate), our negotiator calmly explained that it’s going to cost her company far more in time and money to take a single mother of two to court than they will ever get back on a $2K account.

We’ll look to settle this account in the future, once sufficient funds have accumulated to make a non-insulting settlement offer.

(Ref. 1502)

Technorati Tags: debt settlement, financial hardship, debt collector, debt buyer

Balance in Full

One of Provanta’s settlement negotiators once again found it necessary to educate a debt collector why a California collection law firm can’t initiate litigation against an out-of-state client, unless that law firm has one or more lawyers admitted to the Bar in the state in which the client resides. This grew out of a discussion in which the collector wouldn’t put any type of offer on the table because the account was “pre-litigation” and was only eligible for balance in full — according to the collector, of course. After a fair amount of time talking with the agent’s manager nothing was gained; but we’ll be following up.

(Ref: 1500)

Technorati Tags: debt collection, litigation, debt settlement