A loooong story short is that after graduation, I became involved with a consolidation company (who was recommended on here!) They claimed during the initial consultation that my credit cards were all valid to be put on the program and that they were confident, based on their history with the credit card companies, that these cards would be accepted and placed on the debt management program.
Well, they were wrong. American Express refused (It was a card that had my biggest debt and most worries attached to it as well)
I received a call today from a CREDITOR stating that American Express had an outstanding balance and turned it over to them. He was rude and a jerk, which is the nature of his job… I understand but I’ve never dealt with a creditor before.
I inquired with the consolidation company who stated that American Express turned down the offer. It’s obviously passed the point of knowing as I would have worked with american express had I known that the case was turned over to a creditor and I would have done what I had to do to make payments…
So, do I have any recourse against the consolidation company or american express? I obviously am looking at the worst-case scenario which is to pay the creditor but this could have been avoided. I wasn’t given this information from the consolidation company and now that it’s been turned over to a creditor, I’m looking back in shock.
What avenues do I have to look down to move forward? If I had known this was in effect, I would have taken action.
I’m confused about the timeline, here. Did the consolidation company ever claim that your debts with American Express had been consolidated? Did they ever claim that debts with other companies had been consolidated? Did they just go away and not contact you for a few months?
Did you not carefully read the papers you signed where you said you were responsible for paying the individual creditors until they had explicitly informed you otherwise?
I agree that being dishonest may not have been the best word. I know that they didn’t do it to see me in a struggle… However, I don’t think they were just wrong.
The consolidation company did not state that my American Express charges had specifically gone away. Unfortunately, it didn’t even take a few months either. This all transpired over the past 30 days. I can’t believe it all took place so quickly.
To clarify a bit: During my initial consultation, which I was impressed by due to the consolidation company taking over an hour to find out about my situation, I was given the comfort and confidence that certain creditors would be taken care of. I explained that American Express was my main concern and if this wasn’t a card which was feasible to be put on the consolidation plan then I would want to look into additional routes of action. I was told that American Express isn’t a concern as they are willing to work with the consolidation company.
I actually have not had much contact from the consolidation company at all. In fact, I was told that it would take about three weeks for the creditors to be placed on the program. With a week grace period, I assumed next week would be the best time to bring everything back into perspective. In the interim, I contacted the creditors, told them I was working with the consolidation company, switched to mailed statements (as requested by the consolidation company) and switched my payment dates to the end of the month (also as requested by the consolidation company)
We’re not talking about a huge balance with AmEx here in my opinion… we’re talking about $1,800 to be precise. Compared to my student loans, $1,800 is minimal. College was a debtfully rough time as I supported myself financially.
Hope this clears some things up a bit.
Debt consolidation companies are borderline criminals; in fact, several high-profile individuals in that industry have gotten in serious legal trouble for the way they ran their businesses.
The list of things they tell you that are lies, deceptive or half-truths is longer than the list of things they tell you.
They harm the vast majority of their clients, and in the rest of cases, they don’t do much that you couldn’t have done for yourself.
Off the top of my head, I can’t see you having a claim against the debt consolidation folks large enough to interest a lawyer. They likely DID deceive you to your injury and their gain, but you’d need to prove damages, which you may be able to, but it’d be a mess to prove, and I’ll imagine you signed some fine print that told you that what has happenned could happen.
And, of course, you have no claim at all against American Express based on what you’ve described. AmEx has historically had little interest in working with debt consolidation folks and did not tell you that they were forgiving this debt, unless you left something major out of your story.
By the way, the folks that bugged you on the phone are usually referred to as debt collectors. The term “creditor” includes EVERYONE you owe money, including people that aren’t even invoicing you or calling you for said debts.
If the amount you owe AmEx is big enough that they are likely to file suit, you want to get a lawyer.
In any case, respond to the first letter you get from this debt collector by sending certified return receipt requested mail “Demanding validation of this debt” per their letter.
They will send a letter when they first take your case, they have to. It is likely mailed the same day they begin calling you, give or take. By demanding validation, you preserve certain important legal rights. Never talk to a debt collector on the phone. Do everything in writing. You can extend the period of time they have to collect by acknowledging the debt over the phone, which would be unfortunate for you.
Tip: If you don’t want to talk to them on the phone and don’t mind a white lie, when they call, simply indicate that they have called your work number and that taking personal calls at work is grounds for termination per your supervisor.