How Do I Proceed Now

[GottaGo]

What is the name of your state? NJ

Hi. Here is our situation:
Husband has 2 cards on an Amex account, one business green and one business platinum. He has not been able to pay either in full for a few months and so has been making small payments such as $50, $100, even $250. Received a letter from Amex stating that if account is not paid in full it may go to a collection agency.
My husband received a call on 07/11 on his cell phone (which he did give to Amex as a contact number) from a collection agency demanding payment within an hour.
He called me (I was out of state), as I am the 'secretary' and handle all of his paperwork. We did have the money available, although we needed to use it for something else. We decided to take the money and pay the balance on the two cards.
I went online to AMEX and paid the full amount for both cards, as they had our banking information already stored on file.
I then called the collection agency and told them what I did.
They asked that I stop the payment I made to Amex and remit payment to them, the collection agency.
I informed them that I was not at home and so only had limited access to our accounts (I can only remember so many account and pin numbers!). I also said that by the time I did reach home (which would have been about 4 hours later) the payment would have posted to both our Amex accounts and our bank account (we always pay on-line and this has been our experience). In addition I said that because I had not received any notice to remit payment to anyone other than Amex there was nothing I could do at that point in time other than what I had already done.

A supervisor then came on the phone and said that Amex would continue to charge me late fees, penalties, and collection costs because they (Amex) would take up to 21 days to post the payment to the collection agency. They also said that we were messing with other people's credit and that the longer the debt sat there the more money they (the collection agency) would make, and then the supervisor hung up on me.

So here are my questions:

1. Husband got two additional cards for authorized users. Can this collection affect the credit of the authorized users as well? One of the users never even used the card at all.

2. Who can charge us fees at this point? Especially considering that we have paid the debt now.

3. What course of action do we take now that we have satisfied the debt with the original creditor? Both cards show on-line as having a zero balance.

Thank you, sorry its so long.What is the name of your state?

[Debt Guy]

1. Husband got two additional cards for authorized users. Can this collection affect the credit of the authorized users as well? One of the users never even used the card at all.

Probably not. Sometimes AMEX will report on the CBR of authorized users. I would encourage you to collect these cards and cancel them with AMEX. You are just asking for problems.

2. Who can charge us fees at this point? Especially considering that we have paid the debt now.

Assuming the account has not been charged off, AMEX is in control. The CA has no authority to add charges of any type on their own.

The reason the CA is so nasty is because you paid AMEX directly instead of the CA directly. When you pay the CA, they keep their cut and remit the balance to AMEX. When you pay AMEX, they will remit to the CA but it takes time and delays the fee to the CA. It also impacts their performance statistics.

3. What course of action do we take now that we have satisfied the debt with the original creditor? Both cards show on-line as having a zero balance.

I would talk to someone at AMEX and tell them what the CA said and that you wish to deal only with AMEX at this point. You need to verify that the account indeed has a zero balance -- stay away from on-line payments as you have no paper trail if anything goes wrong. You need also to determine what your ongoing status is with AMEX -- are the accounts still open and can they still be used?

[GottaGo]

Debt Guy,

Thanks for your response!

It appears as though Amex has cancelled both accounts. The two extra cards fall under one of the accounts, so I assume if the account itself is cancelled all cards associated with that account are not usable.

Both accounts now show with a balance of zero, and for a paper trail I have my receipt printed from the internet which shows the ending digits of the Amex account, the ending digits of the bank account, the amount and date paid as well as a confimration number. There is also the posting to our bank account which shows 'electronic remittance to americanexpress.com', so I think we are okay there too.

'Assuming the account has not been charged off, AMEX is in control. The CA has no authority to add charges of any type on their own.'

What does 'charged off' mean?

Thanks again!

[Debt Guy]

charged off is an accounting term -- generally creditors are required to charge off the account once it reaches 180 days past due -- it is not uncommon for the creditor to sell the account to a third party after charge off -- once sold, the new owner calls all the shots -- until then the creditor has total authority

For what it is worth, electronic "paper trails" are never as good as cancelled checks, etc. I know I am on the offramp of the information superhighway (some say I live under the overpass) -- but, I've seen too many situations where a person got themselves into trouble putting their faith in electronic systems.