Potential creditor paying off a debt so they can extend credit?

My aunt and uncle decided to get new windows. For some reason*, even though they are massively in debt, they decided to get suckered in to some outrageously priced windows that could be payed off in a million years at a low-low price per month (with lots’o interest).

The company extending the credit (the window company’s credit-extending partners) ran my aunt and uncle’s credit report and decided they were not eligible to get credit for these windows - BUT instead of denying them, the company told my aunt and uncle that it paid off an $800 debt of theirs and now they can extend them credit for the very expensive windows.

There’s a lot to this story about people being dumb and people taking advantage of other people but my question is…is this normal?

My father’s first reaction was “how could they do that?” and my first reaction was “well anyone who has your credit report has your account number and can pay your bill - what does the original creditor care?” … but really, does this happen all the time? My relatives have been in debt and have had bad credit forever and even they have not heard of this.

It’s assumed that the $800 will go on to the end of their loan and all that, and no one has actually approved this move but the window company did it anyway, but that’s a whole other barrel of pickles.

*The reason is that the window salesman is my aunt’s brother and he is a schiester.

You certainly don’t need a debtor’s permission to buy their debt – mortgages and credit card accounts are bought and sold all the time.

But it does seem rather unusual that the window company would buy someone’s debt just for the express purpose of extending them more credit.

Unless their planning to make well over $800 dollars in interest by the time it’s paid off, or at least by the time they default on the credit.
Brother is planning to make well more then $800 on the windows and is going to pay off the debt himself. If he’s buddy buddy with the credit company he might have asked them to say the payment is from them so they don’t realize that it’s the brother paying down the debt. I can’t see any credit company doing this, but I can see a small business doing it. Especially since he’ll get they money upfront and let the credit company deal with the collection.

Did they pay off the debt, or simply transfer it to the cost of the windows? Or just lied about it?

When my father took over his mother’s affairs after she went into a nursing home, his lawyer told him not to pay any of my grandmother’s debts, or he would be liable for all of them. Might it be applicable in this case - in other words, this (possibly) sleazeball uncle and/or sleazeball window company is now liable for all of your aunt and uncle’s debts? Or does that only happen when the debtor is declared incompetent?


I would advise the father to not get involved further in this. Get the windows through someplace else, and make sure the uncle has nothing further to do with the windows. I’ll bet they don’t need windows badly either, the uncle is pushing them. I wouldn’t do bussiness with a person or firm that claims they paid off a debt without my approving it. Make sure the other debt is really paid off and in two months a notice of failyre to pay doesn’t arrive.

It’s not uncommon for home improvement companies to extend credit that exceeds the amount of work being done. In my opinion, this is a very shady business because they can skirt normal credit practices and regulations.