So, the situation goes that my friend did a fair amount of selling on eBay once upon a time. This went on for a while, until he got his account suspended for some thing or another. At about that time, he had a information theft scare, and changed his credit card numbers.
So, when you sign up on eBay as a seller, you give them your cred card info and stuff like that so they can take money from your account for expenses you accrue. My friend was suspended at a point such that he still owed eBay money, but they couldn’t get it from him because the credit card they had on file was no longer valid.
Now my question is, is this going to screw his credit rating? Can he be sent to collections? Is eBay going to take legal action against him?
IANAL and it sounds like your friend should probably talk to one for legal advice.
That being said, if too much time hasn’t gone by, eBay might look more kindly on your friend if he contacts them asap, explains why his credit card number has changed, and pays eBay what he owes them. If he doesn’t pay a legitimate debt then I can certainly see why collection agencies, bad credit ratings and legal action would all start rearing their ugly heads.
Well, let’s explain the situation a bit more. My friend is being slightly obstinate and feels he was banned somewhat unnecessarily. That being the case, he sees this as screwing eBay, and therefore doesn’t really want to pay. The card he signed up with was a check card and not a credit card, though he did use his actual information.
Based on this, does anyone know if eBay can really screw his credit rating if he ever gets a credit card? Are they gonna sick repo on him? Sue him for the cash? It’s not that my friend is worried about the repercussions of his obstinance, it’s more that I worry that it could come back and bite him in the ass.
How much money are we talking about, here? Unless it’s thousands of dollars, there’s no chance that he’s going to get sued. They will send the debt to their collections department and harass him for it until he pays, though. Their collections department may report the debt to credit agencies, depending on how big it is.
Was your friend in the right? You’re giving us much to work on.
Er, you’re NOT giving us much to work on/with.
I’m not a lawyer or credit expert either, but based on life experience I’d say the odds are very good it’ll show up on his credit report. As to whether or not they’ll come after him, I would say it would depend on a few things such as the amount Ebay is owed, whether they would have to come after him across state lines, etc. All in all, unless the amount owed is in the thousands of dollars I doubt they’ll sue him although they might turn him over to a collection agency.
IANAL etc. The Fair Debt Collection Practices Act details what creditor may and may not do to collect a debt. The Fair Credit Reporting Act deatails a creditor’s and a debtor’s rights regarding credit reports.
AFAIK any creditor is legally allowed to report delinquncies to the various credit reporting agencies. A report of a delinquency will remain on his report for up to seven years. If it’s a significant dollar amount, eBay may very well sue to get a judgment, which will also appear on your friend’s report for up to seven years. Once they have the judgment they may attempt to attach your friend’s property, garnish his wages, and so on. Any attempt on his part to obtain credit will result in that delinquent debt report being factored in to his credit score. Many employers also check credit scores before hiring and a negative report may lead them not to hire your friend. “eBay was unfair” is probably not an excuse most potential creditors or employers will give much weight. A judge might if it’s presented as a breach of contract defense/countersuit but is it really worth it to spite eBay?
I know whereof I speak when I say that a single negative item on a credit report can be very costly. I was sued several years ago by a creditor and I was not able financially or emotionally either to pay them or to fight the suit. The judgment is still sitting on my credit report and as a result I was for years after unable to get a credit card that was unsecured. I had to buy a new car about two years ago, when companies were offering 0% financing and other incentives to get people to buy and I couldn’t qualify because of the judgment. This has cost me a lot in interest that absent the negative report I would not have had to pay. I am unable to refinance the balance of the auto loan because of the negative report.
Not to get all Pittish on your friend, but if he owes the money he should act like a grown-up and pay it off. Refusing to pay it out of obstinance or some sense of righteous indignation over his alleged mistreatment at the hands of eBay is childish, petulant and stupid. He’s not going to hurt anyone but himself.
I got sued by a multi-state health care provider for less than $700.
From what I remember, it wasn’t even close to $100. It was maybe $30 or so I think, I don’t remember. So eBay really would report that to a credit agency and say, screw him out of buying a house/car in the future? And it’d actually hold weight?
Maybe this’ll change his mind then, I’ll run it by the guy and see if I can knock some sense into him. Thanks.
Unless I got evidence, good evidence that this $30 won’t wind up on my credit report, I’d pay it. Actually, since it seems he legitimately owes eBay the money, he should pay it.
I like to do best/worst case analyses on stuff like this. Best case, your friend screws eBay out of $30. Worst case, he gets denied a mortgage/car loan/credit card sometime in the next 7 years because his credit doesn’t pass muster, and pays eBay anyway to get his credit cleared.
He should just pay the money and stop acting like a vengeful little kid.
I don’t know much about eBay but wouldn’t they have to have granted credit in the first place in order to report it to the credit bureaus? Of course they could sue for the money owed but in my experience unless the amount is substantial (ie more than $1000) it isn’t very likely.
Your friend isn’t going to get sued over $30; probably just harassed for the forseeable future over paying it.
Why doesn’t he just send them a check? It’s a shame he believes that he was “wrongly suspended,” but without knowing further, I think it’s fair to assume that he was suspended for violating an eBay policy. Similarly, he agreed to pay eBay his fees when he signed up to the terms of service they provide, and should pay. Whether or not he thinks he was “wrongly banned” is irrelevant; he owes them money, and he should pay it.
Bongmaster,
That’s a reasonable supposition, but any unpaid debt that’s not paid by “Due Date” is eligible for credit reporting.
I had a… $27 doctor’s bill show up on my credit report. Came off once I paid the bill and disputed the notation on my credit report.
Note, however, that the credit bureau erred in deleting it.
If you have a bad debt, and you pay it, that DOES NOT mean it comes off of your report.
Bottom line, if you ever intend on using credit again, pay your creditors.
If you DON’T owe the money, that’s a different story. But I don’t think that’s the barrel of monkeys your friend is in.
I do not think the size of the debt is a determining factor as far as reporting it to credit agencies.
I have a small business. I have sent people to collection for debts as low as 3 dollars. I had a client once call me in hysterics because he was having problems getting a mortgage due to a $25 debt that he owed me. He wanted me to somehow erase the item from his credit report. My reply was, “F.U.”.
Vetbridge:
I can confirm your suspicion. Analysis another message board I follow made of credit scores indicate that the quantity and age of collection items factors into scores. No evidence was found indicating that collection dollar amount figures into scores.
Does the eventual payment get entered as a mitigating factor that partially repairs the damage? If not, there’s no incentive to make any attempt to pay once the damage is done.
Or at least in the next seven years, then it falls off your credit report. Ever is a long time.
Honorable people pay their debts, regardless of the safety of ignoring them. If your friend doesn’t pay his legitimate debts, you might ask yourself why you’re hanging out with such an unethical clod.
It’s like this:
A) The score never gets repaired for 7 years, but
B) Many lenders will not lend to you AT ALL if you have unpaid collections.
Mortgage Lenders are especially picky about this.