What is a pay for delete agreement?

[AMom4xGirls]

State: Virginia

I was wondering what is "a pay for delete agreement"?

 

[TigerD]

State: Virginia

I was wondering what is "a pay for delete agreement"?

That is where you agree to pay a debt that is listed on your credit report and the CA or OC agrees to delete the entry from your credit reports.

These are pretty rare and not many CAs will even consider them.

DC

 

[xylene]

That is where you agree to pay a debt that is listed on your credit report and the CA or OC agrees to delete the entry from your credit reports.

These are pretty rare and not many CAs will even consider them.

DC

A CA typically will consider this arrangement for payment in full. Offering it is a technique to get compliance from those with means. Its also a useful way to get people to 'stretch' to make a full payment by overstating the utility of removing a single bad debt to improve credit worthiness.

They are rare because most debtors are not in a position to make a a full payment and/or they realize that unless this is there only bad debt then it will not improve their overall credit standing....

 

[AMom4xGirls]

new to all these terms CA or OC?

 

[xylene]

new to all these terms CA or OC?

CA- Collection Agency

OC- Original Creditor

 

[TigerD]

A CA typically will consider this arrangement for payment in full. Offering it is a technique to get compliance from those with means. Its also a useful way to get people to 'stretch' to make a full payment by overstating the utility of removing a single bad debt to improve credit worthiness.

Actually no. Most CAs won't even consider "pay for delete." It is violation of our contracts and obligation to only report accurate information to CRAs.

We had that debate on a forum for collectors and agency management. Fewer than 10% of the agencies said they'd even consider it. None of the bigger ones would.

DC

 

[xylene]

Actually no. Most CAs won't even consider "pay for delete." It is violation of our contracts and obligation to only report accurate information to CRAs.

We had that debate on a forum for collectors and agency management. Fewer than 10% of the agencies said they'd even consider it. None of the bigger ones would.

DC

Thank you for the clarification. I understood it to be more frequent. It also seemed logical, but I am not privvy to specific contract details.

Can you speak to OC practices on this issue?

 

[cosine]

Actually no. Most CAs won't even consider "pay for delete." It is violation of our contracts and obligation to only report accurate information to CRAs.

We had that debate on a forum for collectors and agency management. Fewer than 10% of the agencies said they'd even consider it. None of the bigger ones would.

DC

Hey debtcollector. I have a case I'm curious what you think of WRT to PFD.

I had a partially insured procedure performed by a dentist. It was undetermined how much the insurance would cover due to some ambiguity in what was covered.. So I paid 20% up front since the insurance would cover 80% if the ambiguous part was covered, and agreed to pay, upon being billed, the remaining portion the insurance would not cover. They would process the claim directly and bill me if there was a balance remaining after the insurance process completed.

The dentist office improperly prepared the claim form which was rejected entirely by the insurance company. I did not know this happened. They realized the error, corrected it (supposedly) and filed again. Most of the amount was paid, but a couple hundred was not. But I didn't know about this at the time.

Three months after the procedure, I moved to a new address. I called the dentist office and asked about payments. I was told that since it had been three months, it must be all clear. But apparently the lady who I talked to was not aware of the screwup in processing (and of course, didn't tell me about it). I gave her my new address and phone number anyway. Apparently she thought it unimportant and never put it in the computer.

A couple years later, I found an entry for the unpaid amount on disclosures from 2 of the 3 CRAs. I called the listed CA and then the dentist office to find out what was going on, including why I was never billed and never received any collection attempts. The lady at the CA, while not rude, was adamant that the amount was billed and that they had attempted to collect by mail and phone. I told her I would be willing to pay the full amount I originally owed (but not any collection fees added, nor any interest) because of the fact that I was never given any opportunity to actually pay at the beginning. And I added that this MUST include a written agreement to remove the item entirely from my credit report. She simply said they cannot remove items, and that only the OC can do that (but the OC never placed the item, only the CA did that). I called the dentist office and spoke to the office manager who looked at the computer files and finally told me the story of the insurance process errors. Then she found that the lady who I had given my new address to had simply opened a new account in the computer, rather than entered it into my old account. The old account was the one that went unpaid and then to the CA. The new account was an empty account with no active entries in it, and thus a balance of zero (by itself, it wasn't an issue ... just an indicator of the error that was made). Finally, I raised the point of paying the original debt only, under the terms equivalent to paying it as first billed, including that it would not be shown whatsover (not even as paid in full late), since that's the way things would have been had they not screwed up. She refused to do so stating that their policy is to do nothing with accounts once they go to collections, and they just get whatever they can get from the CA (minus the CA's percentage) and live with that. They remained the OC and did not sell the debt.

I suggested to the lady at the dentist office that they should seek a different collection agency since this CA apparently didn't know how to do a proper skip trace (I would not have been hard to find since both old and new addresses were on all 3 credit file disclosures).

I sent a C&D with RRR to the CA and never heard from them again (well, I never ever heard from them at any time, anyway). Not even a confirmation of the C&D (all I had was the RR).

So while PFD may be wrong in most cases, and against policy at most CA's and even at most OC's, in this case I think it is justified. I also think it would not be a violation of contract and obligation to report accurate information to the CRA, since in this case the delete action would be to revert the situation to what it would have been had the OC handled the billing correctly.

In the end, lacking any agreement that anyone was willing to come to, it went unpaid and aged off the credit reports a few years ago. So it's all moot now (unless some BDBs pick it up ... hasn't happened yet).

Your thoughts?

 

[TigerD]

Thank you for the clarification. I understood it to be more frequent. It also seemed logical, but I am not privvy to specific contract details.

Can you speak to OC practices on this issue?

Every OC is different. Some don't report at all, some require us to report and some don't care. By the time it gets to the CA, the consumer's ability to discuss anything about the debt with the OC is very low -- of course that too is also subject to the contract.

Hey debtcollector. I have a case I'm curious what you think of WRT to PFD.

I had a partially insured procedure performed by a dentist. It was undetermined how much the insurance would cover due to some ambiguity in what was covered.. So I paid 20% up front since the insurance would cover 80% if the ambiguous part was covered, and agreed to pay, upon being billed, the remaining portion the insurance would not cover. They would process the claim directly and bill me if there was a balance remaining after the insurance process completed.

The dentist office improperly prepared the claim form which was rejected entirely by the insurance company. I did not know this happened. They realized the error, corrected it (supposedly) and filed again. Most of the amount was paid, but a couple hundred was not. But I didn't know about this at the time.

I agree that it sucks, but you are ultimately responsible.

Three months after the procedure, I moved to a new address. I called the dentist office and asked about payments. I was told that since it had been three months, it must be all clear. But apparently the lady who I talked to was not aware of the screwup in processing (and of course, didn't tell me about it). I gave her my new address and phone number anyway. Apparently she thought it unimportant and never put it in the computer.

Good job following up on it, but you need to remember that "If it isn't in writing, it didn't happen."

A couple years later, I found an entry for the unpaid amount on disclosures from 2 of the 3 CRAs. I called the listed CA and then the dentist office to find out what was going on, including why I was never billed and never received any collection attempts. The lady at the CA, while not rude, was adamant that the amount was billed and that they had attempted to collect by mail and phone.

What probably happened is they sent a letter to your old address and attempted to call your old number. Most small CAs don't know how to effectively skip accounts and most large CAs don't spend any money to skip accounts under $1,000.

I told her I would be willing to pay the full amount I originally owed (but not any collection fees added, nor any interest) because of the fact that I was never given any opportunity to actually pay at the beginning.

If interest is listed in the agreement, then it was added to your bill. CAs are not allowed to add any fees that are not included in the original agreement. That's why we avoid calling our check-by-phone charge a collection fee.

And I added that this MUST include a written agreement to remove the item entirely from my credit report. She simply said they cannot remove items, and that only the OC can do that (but the OC never placed the item, only the CA did that).

Here's the part that sucks. If it is accurate, and from your post I believe it was, it stays. The doctor or dentist is under no obligation to bill you. But you are still obligated to pay the bill.

I called the dentist office and spoke to the office manager who looked at the computer files and finally told me the story of the insurance process errors. Then she found that the lady who I had given my new address to had simply opened a new account in the computer, rather than entered it into my old account. The old account was the one that went unpaid and then to the CA. The new account was an empty account with no active entries in it, and thus a balance of zero (by itself, it wasn't an issue ... just an indicator of the error that was made). Finally, I raised the point of paying the original debt only, under the terms equivalent to paying it as first billed, including that it would not be shown whatsover (not even as paid in full late), since that's the way things would have been had they not screwed up.

That's where you might have made a mistake. At this point you should have asked them how they planed to fix the matter. And this should have been in writing.

She refused to do so stating that their policy is to do nothing with accounts once they go to collections, and they just get whatever they can get from the CA (minus the CA's percentage) and live with that. They remained the OC and did not sell the debt.

That is pretty standard. Places hire CAs so they don't have to deal with the many stories told by debtors. Believe me, I've heard them all.

I suggested to the lady at the dentist office that they should seek a different collection agency since this CA apparently didn't know how to do a proper skip trace (I would not have been hard to find since both old and new addresses were on all 3 credit file disclosures).

No CA that is getting 30% of $200 is going to order credit reports on that balance. By the time the account is set up and they send off initial letters and place a couple of calls -- they are already into it for more than half of their potential return. Small CAs just slap it on credit reports and wait.

I sent a C&D with RRR to the CA and never heard from them again (well, I never ever heard from them at any time, anyway). Not even a confirmation of the C&D (all I had was the RR).

You got lucky; you could have gotten sued.

So while PFD may be wrong in most cases, and against policy at most CA's and even at most OC's, in this case I think it is justified. I also think it would not be a violation of contract and obligation to report accurate information to the CRA, since in this case the delete action would be to revert the situation to what it would have been had the OC handled the billing correctly.

I disagree. It was your responsibility to follow up on. Whatever the circumstances, the bill, which you were responsible for, didn't get paid.

In the end, lacking any agreement that anyone was willing to come to, it went unpaid and aged off the credit reports a few years ago. So it's all moot now (unless some BDBs pick it up ... hasn't happened yet).

Not likely to be an issue.

I just left my job with a national agency to start my own. So I'll address this as to how I'll deal with it. I do not do pay for deletes. Period. It isn't a negotiating point. I simply won't even discuss it. I consider it dishonest. If the person refuses payment except on those grounds and the debt is in statute -- I'll forward the file to an attorney, get the judgment and continue from there.

Now if someone pays then waits a few months and disputes the account with the credit bureau, I'm not going to spend the money and time to verify it. So it'll end up being removed. The difference is the first one is asking me to be dishonest. The second one is my choosing to be lazy.

DC

 

[cosine]

I agree that it sucks, but you are ultimately responsible.


Good job following up on it, but you need to remember that "If it isn't in writing, it didn't happen."

It was in writing.

That's where you might have made a mistake. At this point you should have asked them how they planed to fix the matter. And this should have been in writing.

A followup letter did ask them that. There never was a response.

No CA that is getting 30% of $200 is going to order credit reports on that balance. By the time the account is set up and they send off initial letters and place a couple of calls -- they are already into it for more than half of their potential return. Small CAs just slap it on credit reports and wait.


You got lucky; you could have gotten sued.

At which time discovery would have shown the error the OC made.

I disagree. It was your responsibility to follow up on. Whatever the circumstances, the bill, which you were responsible for, didn't get paid.

I did follow up. I was told the matter was all taken care of by someone that reasonably should have been expected to know because they were looking at the account file in the computer. Ultimately it was the OCs fault. It was their responsibility to let me know if there was a debt; that is what was agreed to (and is morally the thing to do).

I just left my job with a national agency to start my own. So I'll address this as to how I'll deal with it. I do not do pay for deletes. Period. It isn't a negotiating point. I simply won't even discuss it. I consider it dishonest. If the person refuses payment except on those grounds and the debt is in statute -- I'll forward the file to an attorney, get the judgment and continue from there.

You'd involve an attorney in a case where the OC screwed up, for an account of only $200? Of course you might not know the OC screwed up (yet). That would eventually come out. Hopefully your attorney would have realized that before it went to court.

For the average case refusing PFD makes sense. For well more than $200, going to the attorney makes sense (if the PFD offer was made, they seem to believe they have the means to pay).

Now if someone pays then waits a few months and disputes the account with the credit bureau, I'm not going to spend the money and time to verify it. So it'll end up being removed. The difference is the first one is asking me to be dishonest. The second one is my choosing to be lazy.

Well, I disagree that PFD is dishonest in this case. IMHO, it's setting things back to where they should have been in the first place, and thus a correction back to thr truth of how things would have been had the OC never screwed up. It should be the OC taking care of it, though (and I suppose paying the CA their costs for taking the account back).

The CA probably didn't consider the PFD simply because of a blanket policy. I believe it was the OCs responsibility to clear this up (the CA didn't cause it).

Actually, the only regret I have over the case now is that I didn't sue the OC. BTW, I had no moral qualms about not paying this one. Their error cost me more than the amount, anyway.

 

[TigerD]

At this point, don't sweat it. It is outside the SOL and off your credit reports.

DC

 

[cosine]

At this point, don't sweat it. It is outside the SOL and off your credit reports.

DC

Right. My whole point in this thread was that there can be some, perhaps rare, cases where doing a PFD has the effect of setting things right, and therefore it isn't absolutely always dishonest.

 

[missiningmyson]

Thanks debtcolletor

Hey, Debtcollector


Thanks for the backround and insight on the "pay to delete" it has always been my theory that , the practice of "pay to delete" is unethical and illegal , even though I am a consumer and I have never worked as a collector and right now I have a few collections that I woul greatly benefit from a pay to delete , but I am a honest person and If i am trying to get the credit bureaus and collection agencies to be honest and fair when reporting , it doesnt seem right for me to ask the collection agency to do something that is illegal and unethical. But the advice you gave about paying it off and letting the collection agency be "lazy" and not respond since they have already been paid in full and for them to spend money to verify a account they have been paid on , that advice is priceless and it actual worked for me several times. Good advice thanks.

 

[moburkes]

Hey, Debtcollector


Thanks for the backround and insight on the "pay to delete" it has always been my theory that , the practice of "pay to delete" is unethical and illegal , even though I am a consumer and I have never worked as a collector and right now I have a few collections that I woul greatly benefit from a pay to delete , but I am a honest person and If i am trying to get the credit bureaus and collection agencies to be honest and fair when reporting , it doesnt seem right for me to ask the collection agency to do something that is illegal and unethical. But the advice you gave about paying it off and letting the collection agency be "lazy" and not respond since they have already been paid in full and for them to spend money to verify a account they have been paid on , that advice is priceless and it actual worked for me several times. Good advice thanks.

Ma'am, that has got to be on of the longest run-on sentences ever!