Not sure if you missed this...

Why is the first week of the month the best?

I figured if people just paid rent they would be pretty tight for cash.

http://www.youtube.com/watch?v=bpBP9dALcWw

You can lower your rate of declines by instituting a $20 decline fee. Have the collector advise the debtor of the fee when taking the recorded authorization. Also specify in the authorization the date and TIME to process the charge. Many debtors utilize prepaid cards that they have to load once they get their paychecks and don't have the funds loaded until a certain time of day. The decline fees will lower your overall decline rate to 5-7%.

Debtors receive their social security payments on either the 1st or the 3rd of the month and most welfare is also paid at the beginning of the month. One of the dirty secrets of the industry is that the poorer a person is the more likely they are to pay.

15 U.S.C. 1692e(2)(B) makes it a violation of the FDCPA for a collector to make the false representation of any services rendered or compensation which may be lawfully received by any debt collector for the collection of a debt.

A debt collection agency cannot collect any service fee, decline fee, etc. unless a state law allows it which most, if not all, don't. Only way to legally get those fees if if youre accepting payment by checks, one is returned insufficient funds, and the state has a law allowing you to charge for the fees incurred for the check return.

You are only partially right I'm afraid. A collection agency is not REQUIRED to accept payments by credit card. In exchange for the consideration of allowing a debtor to pay by credit card you can stipulate any terms to that separate contract with the debtor that you so choose. This includes a convenience fee for paying via credit card or a decline fee if any authorized payment is returned.

The way to get around what you're talking about is to always offer a free method of payment. For example mailing in a payment is free, sending it via Western Union or MoneyGram costs X, paying via credit card costs Y, or we can directly debit your checking or savings account at no charge unless your payment is returned.

As long as the agency offers methods of payment without cost they can charge for other "preference" payment methods.

I have seen at least one case where this argument failed. What also starts to happen is the "free" methods mysteriously start to not be working on those days. I did leave out that if the contract creating the debt allows a collector to charge a fee, then they are able to do it, but hardly any of the contracts contain that provision.

I would love to see a citation to a case where the consumer was offered a free method of payment and prevailed in a FDCPA suit for being charged a fee for a "preference" payment. Please post it if you have it.

Sorry guys, I've been super busy keeping my agency above water. As of today, we have 5500 in my business account. We have had major problems with our computers, and are going to have to buy new ones; cost of 2k. Our phone system is due to be upgraded to VoiP. Cost of VoiP phones, 1k.

On the plus side, we have had a good liquidation rate, even with these problems. This liquidation rate has led us to be solicited by a higher quality of client. We are now supplied with a huge supply (to us) of dept from June of 2012. We are getting 40% of everything we collect. Today was the first day we actually collected on this debt, and it is fire. The agency only has 4 employees plus myself at the time, and the need for new computers is a real one. But with this debt, we should be profitable by the end of the month. We have about 16k on file for November at this point, with 45% of it going to us since it is from our old client. So if we collect 12k this month for our new client, we will break even. It should not be a problem for us to do that.
All of our problems have stemmed from me not doing the tech research before opening, and it is probably going to cost me about 2k I could have saved when it's all said and done. Live and learn for the next agency I open.
Any other questions, and I will try to update this thread more frequently.

Very interesting read, I will definitely be following along!

I had a $300 phone bill that I didn't pay while I was still in school 2 years ago; they slapped $500 on it for ending the contract early and I just never paid it. This grew to $1100 through a couple of agencies that I'm aware of. Call me a deadbeat or young and stupid, working in the financial industry now and just common sense tells me it's smashed my credit rating.

I finally told myself I need to square this debt up and got a settlement for $675. From what I gather this company, IQOR, picked the debt up for like $20-30? Not sure why I'm posting this publicly as it's pretty embarrassing, but whatever...

Basically I want to know, has this been detrimental to my rating every month since it's been delinquent, I'd assume so? Once I pay it off and get in touch with Equifax/Transunion will it stop hurting my credit score? will it showed as paid up etc?

I am 23 and from what I understand it'll show on there for 7 more years.. but will it show as paid and I can begin to rebuild my credit?


Thanks for the eye opening thread and best of luck with the business!

You guys might find this article interesting. Buying Debt - What OWS has been up to.



First, you need to request you 3 credit reports to see what is on there.

Second, there will be no change on your credit reports. Your debt will still be listed there for the record. Everything will be the same as before - unless you negotiate with the collections agencies to remove stuff and get it in writing that they will do so. That's how I understand it at least.

I think it goes from a non payment to a charge off or settled amount. Since that is on there no matter what, I would negotiate a way lower payment and just get it over with. But I would first pull your credit report. Remember, its not always based on score. If you go to make a mojor purchase they may look at charge offs or other things besides scores.

Mookie88,

I am pretty hard on deadbeats but given how ****ty the Canadian cellphone companies are you shouldn't feel too bad.

Don't deal with IQOR. They are the scum of the earth as far as collection agencies are concerned.

Did this happen in Nova Scotia? If it was in Ontario or Alberta you'd be considerably better off.

Assuming it is Nova Scotia the statute of limitations is six years from the point of last activity which is also the amount of time that negative information will be reported on your credit reports.

If you are two years in I would do nothing. It will disappear from your credit at four years.

If you do pay it then you need to negotiate with them to remove it as a condition of payment. Since you are dealing with IQOR the odds that they will **** you over are quite high. If you end up paying it back and they don't remove it you end up extending the amount of time it will remain on to six rather than four years. It will show paid but that is still a negative mark.

I would start with getting your credit report / credit score from Equifax. We only have two credit agencies in Canada since the one that starts with an e decided to leave. Of the two Transunion Canada is really garbage and the realization of that is leading to less and less credit granters using it. You might be surprised that this is not having much impact on your credit. Regardless, once you know what your score is you'll have a better idea what to do.

This is a very odd position for me to take since I actually support putting people in jail for not paying consumer debt but given how much Rogers / Telus / Ball **** over their customers I am more sympathetic to not paying. Now if you didn't pay one of the new small start-ups like Wind then stop being a deadbeat and pay them.

I was planning on not dealing with it but negotiated and they advised me it would improve my credit so long as I fax what they've sent me (settled) to equifax/trans. I'm making enough money now that I can afford to... barely, can't really... but I want to get on track.

Cell phone companies in Canada are the WORST and the ironic thing is after I reached settlement there was a huge (negative) story on IQOR on the National News... sigh.

cheers.

Who said it would help? IQOR? Don't trust anything they say. I have nothing against collection agencies but a couple of times a year I will get asked for advice on an issue involving IQOR and they are not like other collection agencies. They continuously break the law and do ridiculous **** to people.

You faxing Equifax will not remove the item from your credit. If they are not going to remove it then while by paying it that will show paid you will still have this negative information on your credit report which is almost as bad. What makes it worse is that by having activity you will reset the countdown for when it falls off so now this thing is going to be on your credit for longer.

If you haven't done so don't communicate with IQOR in writing. They will try to get you to do that.

This is a truly horrible idea but at least it's somewhat clever. The only way it would be justifiable is if they were only buying up medical debt.

they can't buy specific debt though right?

Mookie88,

Am I reading this right? The agency bought your debt for only $20-30 on 1100$ debt? I had no idea they sell debt that cheap. Is this fairly common?

Well, I'm just making an assumption from what I've read in this thread.. the debt's a couple years old. Bahhhhhhhh I regret dealing with them... I could use the money ha.. ah well.

assuming you're only hope is they decide to pay after two years, $20 seems somewhat reasonable...

I'm bringing this thread back from the dead. Today is my four month anniversary of opening my collection agency. That is not the reason why today is such a landmark for me though.

Today I hit my break even number for the month. The amount of money I need to cover monthly payroll and my overhead for the month is 11k. Today I cleared 11k for the month of January. I have one full week left of collecting for the month. Anything I collect from this day until Jan. 31 will be profit for me.

This is huge for me. About 2 months ago I overdrew my business account by $1400 in order to make payroll. My bank account right now is up to 5k, and will go up this month. I have officially turned the corner from money pit into profitable business, and it is one of the best feelings in the world.

I now have two clients I collect for. They are both fairly good to me at this point, and we have been liquidating a high enough percentage of our debt to the point where one of our clients has given us debt that has been charged off only 5 months ago, and has only been collected on by one other agency. I just added an employee for the first time ever earlier this week, and we are now a five person agency plus myself, rather than a four person agency. I hope to grow to a six person agency by the end of February. My medium term goal is to be a 10 person agency by the end of June. My longer term goal is to quit my day job by the end of the calendar year and expand my agency again.

I am sorry I let this thread die because I enjoyed this diary, and I will try to keep up with it and answer questions from now on every few days. I have been very busy working my 8-5 day job, and then working until 730 or 9 most days of the week. In addition to this, I am a single father of twin 14 month old boys, so my time has been limited lately. I'm much less stressed out now, and hope to be able to have an hour or two to relax and answer questions.

Thanks for following this thread for all that have, and thank you for continuing to do so.

Congrats, glad to hear you stuck with it and it is now starting to turn around.

What would you say the biggest challenge has been over the last 4 months?

If you were to start the process again (with the experience you now have) what do you think you would do differently?

How close did you come to quitting the business or were you confident that it would eventually turn around.

Biggest business challenge has been finding employees that are reliable and not drug addicts. As a rule, paydayloan collectors are very transient and not very reliable. I have a 5 person shop now, but I've probably had 10 employees in four months, and only my manager remains from the original crew. The second biggest challenge was networking enough to find good paper to collect on.

If I was to start over, I would start smaller. I started with 7 employees and quickly realized I couldn't afford to pay them all. I would also go with VoIP phones immediately; not using them off the bat cost me a lot of money.

I came very close to quitting the business. Literally within a week. I thought about 2 months ago that I was throwing good money after bad. My manager is one of my best friends, and he convinced me to give him two more weeks to turn it around and get everything straight. I did, and he did.

Thanks for the questions.