need help with collection agency

[Czech-mate]

hey guys,

i need help re: a collection agency.

so here's my side: i moved away for a work project for awhile. when i found out i would be staying longer than expected, i decided to cancel my monthly obligations including a gym membership.

when i returned to toronto in April, i found out the gym had gone bankrupt and shut down.

now i'm getting a letter saying that i still owe money to the gym..........

the problem is i never got proof that i closed my gym account. on the flip side, what proof does the agency have that i owe this amount?

are there ways to fight this? it seems hearsay at this point

 

[Master_Bates]

Yeah, if you have no proof, it will sound like just another sob story to the collection agency...

 

[Moraff]

Just because the gym went bankrupt does not mean all the paperwork vanished into thin air.

Their proof will be the copy of the agreement you signed, plus the transaction records showing how much and when you paid.

The onus will be on you to prove that you either a) paid more to the gym than they indicate or b) that you and the gym did agree to cancel your membership. Any of the big gyms I have either belonged to or thought of joining required you to send a registered letter to head office in order to cancel. If you just did it verbally, you are most likely out of luck.

 

[Robinto]

Not much you can do except tough it out. Collection agencies will give up eventually, and you can get your credit report amended later on down the road.

There was a long thread here already about gym membership cancellations. Gyms are notorious crooks, all of them.

Watch out for your pre-authorized bank payments, if that is how you originally paid them. If you go to your bank, and cancel one payment authorization to Superfitness, or whatever, for say 50 dollars a month, the gym can and will go to your bank and resubmit with a different name and amount, (ABC Scam Holdings, for instance, for $49.99 and start siphoning money again. Talk to your bank. You may want to reopen a different account.

 

[RAWD]

You might want to weigh the cost of paying the alleged amount owing vs. the time, hassle and grief of having your credit record tarnished.

 

[fourfooteleven]

a collection agency is a company that just buys the debts off of other companies - I'd just tell them to F&^% Off every time they call you if that gym is bankrupt. They can't do anything. Also the easiest way to get out of gym memberships is to call your credit card company and change the number.

 

[Another_Mod]

a collection agency is a company that just buys the debts off of other companies - I'd just tell them to F&^% Off every time they call you if that gym is bankrupt. They can't do anything. Also the easiest way to get out of gym memberships is to call your credit card company and change the number.

You should get yourself educated on facts of law & liaility with debts incurred.

 

[Master_Bates]

fourfooteleven might give some of the worst advice i've ever heard.

 

[Stoo]

If the gym went tits up, then presumably the collection agency is working for the receiver who is likely working for either a secured creditor (like a bank, or perhaps the owner) or some collection of unsecured creditors. They're interest is in collecting as much money as they can, with a minimum of fuss. More than likely they would be open to some sort of negotiated settlement. If you owe them $800, call them and tell them you are prepared to see them in small claims court, but you would prefer to settle it quickly with a minimum of fuss. I suspect if you offer them $200 they'll haggle a bit and you'll end up getting off with perhaps 25% of what they say you owe. It sounds like it will be difficult for you to prove your point since you don't have anything to prove you cancelled, so this might be the best way to preserve your credit rating. You should perhaps negotiate that point into your agreement too... that they won't mark you as a bum payer...

 

[skypilot]

Tell the collection agency to provide proof of the debt. They will probably not be able to do it. Just ignore them. If you make any payments at all you will re start the statute of limitations time. Having worked at a collection agency I can tell you they do not care at all what your explanation is or if you were right or wrong, the collector just wants the money so he can make his budget. A debt to a gym means nothing on a credit report, absolutely nothing.

 

[fourfooteleven]

Yeah anothermod and masterbater don't understand. How do you think it's law to pay and agency that has purchased bad debt? They made a bet (like buying a stock) hoping to convert. I know your intentions are good ...

If this was other circumstances and it was a legit debt to an operating company - you pay it. A bankrupt gym??? Gimme a break!! anothermod/masterbater please PM me your phone numbers so I can make some $$$ off you pushovers!

 

[Master_Bates]

Yeah anothermod and masterbater don't understand. How do you think it's law to pay and agency that has purchased bad debt? They made a bet (like buying a stock) hoping to convert. I know your intentions are good ...

If this was other circumstances and it was a legit debt to an operating company - you pay it. A bankrupt gym??? Gimme a break!! anothermod/masterbater please PM me your phone numbers so I can make some $$$ off you pushovers!

My reply was more in reference to your advice of cancelling your credit card to get out of a contract.

 

[fuji]

My reply was more in reference to your advice of cancelling your credit card to get out of a contract.

You can't get out of a contract by cancelling your card. You will stop the payments, but you will still owe them the money. They will refer you to a collections agency and they will be RIGHT.

The moral of the story here is that if you cancel a contract like a gym membership you need something in writing to prove that you did.

Absent that some of the advice up thread about being a royal PITA so that it isn't worth anyone's time to pursue you is probably the best you can do. I'm not sure I agree with Rube that you should never negotiate--if you really DID fuck up and probably still are legally on the hook for the money they say you owe then there is something to be said for negotiating a smaller payment. It depends on how strong you think your cards are.

 

[cute-bald]

OK DUDES hear is the ugly truth.... If I show a document ( not even signed by you) that shows that you owed such & such company a fee & I have paid a members fee to access " the credit reporting agency" ( due to possible legalities I shall not specify a specific credit reporting agency on this site BUT the 2 main ones work the same way) then I can submit the document to them & they will put it on your file ( or create one on you). It is VERY hard for you to get it removed unless you have documented proof that you do not owe or there is error in identifying you & thus possibly not you. 2PROBLEMS WITH THE SYSTEM. 1 credit reporting agencies are servicing thier PAYING members NOT YOU.
2) credit reporting & agencies are TOTALLY UNREGULATED..... PERIOD!!! It is in my opinion outrageous. Until there is a public outcry politicians will have no reason to change things. The paying customers are not being harmed & will continue to pay & credit reporting agencies will do what is needed to satisfy paying customers. That is not the general public. THE ONLY REASON credit reporting agencies even entertain changing your file if you have proof is because to not to when proof is presented gets into the legal area of slander ( false info which causes you financial harm) & leaves them open to lawsuites. Their business model does not work if fighting & paying out on lawsuites PLUS it is to their advantage to look honest & accurate to their paying customers BUT you must have undeniable proof of some sort of error. To their way of thinking a bankrupt company does not show you did not owe a company money AND they know you do not have proof enough to sue them. In the end they will do whatever to keep their paying customers happy WITHOUT crossing the line & incur lawsuites. P.S. This system gives big companies an advantage to have shitty business practices & strong arm the little guy with the threat of a bad credit rating. For eg: the sales guys at one of the large wireless , mobile internet services totally lied about the cost structure, etc. Once I got the bill I decided no way paying these slime balls. Of course when coming around to collect unpaid bill there is threat of damaged credit rating. I did not care. BUT you have to decide if you will suck it up as is often in these situations it costs MORE to fight than pay the bill & these corporations know it. No surprise that once credit ratings became so mainstream, corporations started with the sleasy tactics & craptacular service. Your credit rating is their ace card. They know 90% of people will care & give in because of it. For the 10% who do not give a shit....... corporations can do nothing.

 

[fun-guy]

How do you think it's law to pay and agency that has purchased bad debt? They made a bet (like buying a stock) hoping to convert. I know your intentions are good ...

If this was other circumstances and it was a legit debt to an operating company - you pay it. A bankrupt gym??? Gimme a break!! anothermod/masterbater please PM me your phone numbers so I can make some $$$ off you pushovers!

You are completely incorrect. Collection agencies don't buy debt, they collect debt on behalf of their clients and get paid a contingency fee based on the amount they collect, if they don't collect, they don't get paid.

Companies that buy debt for a discount are called factoring companies. Your other advice is way off base as well.

There is a lot of wrong information on this thread, the OP should not rely on this thread whatsoever, contact a professional if you're serious.

 

[Questor]

OK DUDES hear is the ugly truth.... If I show a document ( not even signed by you) that shows that you owed such & such company a fee & I have paid a members fee to access " the credit reporting agency" ( due to possible legalities I shall not specify a specific credit reporting agency on this site BUT the 2 main ones work the same way) then I can submit the document to them & they will put it on your file ( or create one on you). It is VERY hard for you to get it removed unless you have documented proof that you do not owe or there is error in identifying you & thus possibly not you. 2PROBLEMS WITH THE SYSTEM. 1 credit reporting agencies are servicing thier PAYING members NOT YOU.
2) credit reporting & agencies are TOTALLY UNREGULATED..... PERIOD!!! It is in my opinion outrageous. Until there is a public outcry politicians will have no reason to change things. The paying customers are not being harmed & will continue to pay & credit reporting agencies will do what is needed to satisfy paying customers. That is not the general public. THE ONLY REASON credit reporting agencies even entertain changing your file if you have proof is because to not to when proof is presented gets into the legal area of slander ( false info which causes you financial harm) & leaves them open to lawsuites. Their business model does not work if fighting & paying out on lawsuites PLUS it is to their advantage to look honest & accurate to their paying customers BUT you must have undeniable proof of some sort of error. To their way of thinking a bankrupt company does not show you did not owe a company money AND they know you do not have proof enough to sue them. In the end they will do whatever to keep their paying customers happy WITHOUT crossing the line & incur lawsuites. P.S. This system gives big companies an advantage to have shitty business practices & strong arm the little guy with the threat of a bad credit rating. For eg: the sales guys at one of the large wireless , mobile internet services totally lied about the cost structure, etc. Once I got the bill I decided no way paying these slime balls. Of course when coming around to collect unpaid bill there is threat of damaged credit rating. I did not care. BUT you have to decide if you will suck it up as is often in these situations it costs MORE to fight than pay the bill & these corporations know it. No surprise that once credit ratings became so mainstream, corporations started with the sleasy tactics & craptacular service. Your credit rating is their ace card. They know 90% of people will care & give in because of it. For the 10% who do not give a shit....... corporations can do nothing.

cute-bald, I think you are compensating for your short stature by writing extra long paragraphs. Please try to avoid this in the future. It diminishes the impact of what you are saying. Girls don't like it either.

 

[Robinto]

You can't get out of a contract by cancelling your card. You will stop the payments, but you will still owe them the money. They will refer you to a collections agency and they will be RIGHT.

Rubmeister's advice sounds sound. I could have used it years ago when I found myself in the same boat. In my case, the agency eventually just went away. Fuji is correct that canceling a card will not cancel a contract, but it will at least stop payments to a crooked gym operator. Describing a gym operator as "Crooked", by the way, is is practically a redundancy in my experience. I don't know whether or not a company can dispute a disputed payment with the card company or not without you finding out about it, if all you do is cancel a payment.

If you paid via a pre-authorized check, however, you may find that a crooked operator can still dip into your account years later, by the means I described in my previous point. Unless you check your monthly summaries carefully, you may not be aware that your account is hemorrhaging money down the road.

Checks in general, are dangerous things in the hands of crooks, scammers, and con-artists. Even certified checks. I think there was a thread on checks a while back.