Just because someone says you owe them money doesn’t mean you really do. Even if they take you to collections and threaten to hurt your credit score, there are still steps you can take to protect yourself from bogus charges. Whether you’re worried about your personal or business credit and reputation, make sure you always dispute frivolous charges and fight back against those who think a little credit extortion is a substitute for providing a good product or service.
Recently, Sprint decided to quietly change the terms of my service agreement, and when I said no way they tried to throw every cancellation fee and service charge they had on my bill. I thought it was nonsense that I’d have to pay for a cancellation fee on a contract they effectively cancelled, so I let them know it. They weren’t happy to lose a customer, and they wanted as much as they could get on the way out, so they let me know they had no interest in backing down.
Off to collections
I was pretty furious with Sprint, so I didn’t really want to think too much about it. I got my parents and fiancee to dump their Sprint plans, and I moved us all to a Verizon shared plan with much faster speeds and much better devices.
It didn’t take that long for Sprint to send the bill claim off to collections, though, and the collection agency was already starting to threaten my credit rating from the first contact. Well, I don’t like extortion, so I fired up the word processor and prepared a response letter.
Now pay attention, because these steps are pretty important if you want them to take your complaints seriously.
Send everything certified mail – and make sure you have a copy of proof that the letter is delivered. If you don’t do this, they will conveniently forget any conversations you had, or emails you sent, or letters you’ve mailed. Consider nothing you say official unless you have put it in writing and received a proof of delivery.
Indicate that you dispute the charges – and leave no doubt about it. Don’t say “Well, I might owe a little bit,” or “I’m not sure.” Be firm but polite, and make it clear that you do NOT owe the money you are being asked for.
Ask for verification of the debt – because even though they’ll just send you another copy of the bill, the verification process gets the debt collection questioning whether or not the debt is actually valid. Different judges have made different rulings on what kind of due dilligence is required, but it is still important to make this claim to your rights. It shows everyone involved that you’re aware of the laws and protections you have, and it really opens up the lines to negotiation.
Send out those complaints
Once you’ve got the dispute and verification letter mailed off, it’s time to hit the Better Business Bureau and any state consumer protection boards. While these complaints rarely result in anything, you might as well help get the word out when a company doesn’t act reputably. At the very least, your warnings can save someone else the hassle later on down the line.
A lot of businesses don’t even bother to seek accreditation with the BBB, but they’ll still keep a file on these companies and show a summary of the complaints received and resolved. Be sure to use this resource before getting in to any contracts, and if you do business with a company that tries to screw you, make sure you leave a record of that!
Now let the negotiations begin
Shortly after completing these steps, I received a response from the collection agency Sprint had hired to shake me down. They acknowledged the fact this debt was now in dispute, and they provided a copy of the last Sprint bill for “verification.” It doesn’t really verify anything but that Sprint is making a claim, but whatever. Some legal interpretations say that is all they have to do.
There was one little difference this time, however. Instead of the original $150 Sprint wanted from me, they’ve accepted an unspecified adjustment and reduced the claim to $67. If it was just about the money, I might even want to pay them off just to save the trouble and the credit rating.
On the other hand, this 2/3rds reduction in the claim shows that they can’t justify the bill in the face of a organized dispute. Most of these bogus debt claims are thrown out without a second thought, and some percentage of people will just suck it up and pay the bill. Once you start to really question the legitimacy of the debt, though, most businesses will back down unless they have a really good claim.
So hey, don’t let some big business push you around and hold your credit rating hostage. Stand up and take advantage of your rights instead!