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Collections Tactics – The Rant (Part 1 of TBD)
Posted by: | CommentsI, like so many others these days, am slowly digging myself out of debt. Still, slowly just isn’t good enough for some companies (probably because they are in danger of tanking and want their damned money now).
Last week, a debt collector called my mother in law, my brother in law, my mother, and who knows whom else, and left voicemails for all of them. In those voicemails, the collector stated that I owed a debt, that if I didn’t respond in two days, they’d take me to court, and that the voicemails constituted notice that I had been served.
It just so happens that I have a few research skills, so I looked up the Fair Debt Collection Practices Act. I found three sections of that act that the voicemails violated. (I won’t bore you with the legal jots and tiddles, but if you want to know, just mosey over to the contact page and ask).
Now, the debt collector is also a law office (to protect the guilty, I can’t say which one), so you’d think they’d know better.
They do.
In their desperate attempt to squeeze as much money as they can from consumers, debt collectors are throwing caution – and legal practices – to the wind. Some of them, such as the one I’ve described here, underestimate consumers to the point where they don’t even try to pretend they adhere to legal practices.
After all, we’re in debt, so we’re obviously too stupid to do a few minutes of research, right? And besides, even if we figure out what they’re doing is illegal, we’re in debt… so we probably can’t pay an attorney to file suit against them. (Plus, the FDCPA only allows consumers to sue for actual damages plus $1,000 in punitive damages… which means the most you’ll get is $1,000 plus court costs and attorney fees unless you can prove they caused you to lose your job or be denied a loan.)
My opinion is that these practices will not stop until the Feds put some real bite into the FDCPA. Up the punitive damages threshold to $10k, and I imagine you’ll see a lot fewer debt collectors rattling your extended family members/neighbors/trash collector with empty threats over $500 debts.
Thus endeth rant.
What unfair debt collection practices have you encountered in your quest for financial freedom?
Buy Here, Pay Here Motorcycle Dealerships?
Posted by: | Comments“Are there any buy here pay here motorcycle dealerships in the United States?”
I received this admittedly intriguing question from a reader yesterday. And to be perfectly honest, I’d never really thought about it. I’m not really a motorcycle sort of guy, so it never occurred to me that my readers might be looking for motorcycles they can buy on a “buy here, pay here basis.”
On the surface, it would make sense that there would be buy here pay here motorcycle dealerships. I mean, you can buy everything from cars to plasma televisions on a “buy here, pay here” basis. So why not motorcycles?
What’s a Buy Here Pay Here Motorcycle Dealership?
Looking for a buy here pay here motorcycle dealership?
If your credit is bad, you can usually go to a standard dealership to buy a vehicle. Most dealerships work with several banks and lenders, some of which offer special financing for “credit challenged” consumers. But if your credit really stinks, you may end up at a “buy here, pay here” dealership. These dealerships handle the financing themselves, instead of using third party lenders.
They set their own interest rates, so you can plan to pay more for financing than through a third party lender. Also, these dealerships tend to adopt a “take no shit” approach when it comes to making your payments. I’ve been told that some of these guys will take your vehicle if you’re a week late. They have a major financial stake in whether you pay on time, so they can’t afford to let you screw around.
So Are There Any Buy Here Pay Here Motorcycle Dealerships?
If so, not very many. A quick Google search yielded thousands of results, but the vast majority turned out to be just online lenders (or affiliate marketers promoting these lenders), and the pages just used the term “buy here pay here motorcycle ” to get traffic. In fact, many of them specifically state that they do not offer loans for motorcycles.
I live in a medium-sized city (about 2 million people in the metro area), so I thought there might be at least one buy here pay here motorcycle dealership in the city. I called every motorcycle dealership and “buy here pay here” dealership in the city, and came up empty-handed. “Buy here, pay here” dealerships didn’t stock motorcycles, and motorcycle dealerships didn’t offer “buy here, pay here” financing.
Further searching finally turned up Team Lake Road Auto Sales in Conneaut Lake, PA, which offers “buy here, pay here” financing and has motorcycles in its inventory. But the website states that “Buy here, pay here” financing is only available on “some” vehicles. I’d bet a cup of coffee that these vehicles don’t include the motorcycles.
Admittedly, my research was neither exhaustive nor terribly well organized. But if there is such a thing as a buy here pay here motorcycle dealership, I’ll be damned if I can find it.
To my reader (who asked me not to use his name… and I don’t blame him, given my tendency toward shenanigans), and anyone else looking for a buy here pay here motorcycle dealership… I’m sorry. My search is going in the “dead end” file for now.
If anyone knows of such a dealership, please comment here or send me a message on the Contact page.
Image attribution: Custom Motorcycles
How to Negotiate Debt Settlement
Posted by: | CommentsIn the last post, I gave some tips on how to decide if debt settlement is the right option for you. If you haven’t read that post, you can find it here.
Should You Consider Debt Settlement?
Now, if you’ve decided that debt settlement is a possibility, here are some tips to help you improve your chances of reaching an agreement that helps you reach your goals.
Tips for Successful Debt Settlement
- Be realistic about how much you have to work with. You really need to decide how much you can pay before you ever pick up the phone. That also includes future income if you plan to ask for payments instead of a lump sum. This will help keep you from being talked into a more aggressive payment arrangement. If you can’t pay off the settlement, there’s no point in setting one up.
- Contact your creditor with numbers in hand. Your creditor isn’t just going to bend over backwards to help you. It wants money, and it wants it yesterday. But if you can give your creditor a realistic picture of your income and expenses, as well as how much you have left over to pay the debt, you gain an advantage. Creditors and collection agencies aren’t stupid – they know they can’t take more than you have. If they want the debt paid, they have to work within your constraints. Otherwise, they’ll just have to spend more money on collections efforts (probably with no result).
- Offer a proposal. Usually, it’s the creditor telling you how much you have to pay. But if you’re really behind on your payments, the creditor wants to minimize its losses. Offering a settlement proposal (including how many payments you’ll make) sometimes sets the stage for you to get what you want. It doesn’t always work, but it can swing the conversation in your favor before the creditor can start making demands.
- Ascend the food chain. Don’t assume that the person on the other end of the phone has the final say in whether the creditor will accept your proposal. Instead of agreeing to a settlement you can’t fulfill, ask to speak to a manager. If you don’t get anywhere there, keep going up the ladder. The higher-ups usually have a better grasp of the “big picture,” and understand that accepting your proposal is better than getting nothing.
- Get the agreement in writing. Ask the creditor to send you a letter outlining the agreement, along with its acceptance of the settlement agreement. This includes the total amount you’ll pay, the number of payments, the amount of each payment, and the exact dates when those payments will be deducted from your checking account. If anything goes awry, you’ll have documentation. Otherwise, it’s your word against theirs.
- Keep your debt settlement agreement. Creditors get really pissy when you don’t make your payments as agreed. The chances of working out another settlement are questionable at best. If you know the money won’t be in your account on the payment date, call and ask the creditor to change the date. It’s better for the creditor to change the date than have a payment returned for insufficient funds.
What Do I Think of Network Marketing?
Posted by: | CommentsAs I’ve stated many times here, I believe that entrepreneurship is one of the best ways to increase your income and extract yourself from the “credit grid.” As such, I champion internet businesses over traditional brick-and-mortar businesses because… well, they require a much smaller investment of time and money. You can get started for less than $10, and you can put in as many or as few hours as your schedule permits.
That said, people seem to equate “internet based business” with “network marketing” (also called multi-level marketing or MLM). That’s because there are so danged many of these things on the internet today. If you have an email account or frequent a discussion board, you’ve probably seen more than a few folks hawking these opportunities.
Now, for the record, I don’t think that network marketing is inherently “bad.” It’s just not for everyone. There are a number of problems that keep most people, both online and offline, from succeeding with these types of businesses:
- They can get expensive. You usually either have to pay a monthly membership fee or buy whatever the business is selling – the cost can range from about $40 to several hundred dollars per month. If you’re trying to pay down debt and become financially self-sufficient, this can be a problem.
- They require a “selling” personality. Let’s face it, everybody knows a MLM opportunity when they see one, and most people run away screaming. You’re not going to find a pool of prospects chomping at the bit to get in on one of these. If you aren’t into hard-selling, you’re probably going to hate pestering prospects to join (and to keep them from dropping out.) If you are into hard-selling, you’d probably do better as a car salesman. A lot of people make the mistake of thinking they can alter their personalities to fit the business. From experience, I can tell you this is a highly unlikely scenario.
- The attrition rate is horrible. As I alluded to above, there’s a lot of work involved in keeping people from dropping out. Suppose you finally get a prospect to join, and after a couple of months go by, the prospect isn’t making any money. Does he blame himself? Of course not! He blames you and the company for failing to provide support. The biggest problem most network marketers have is losing downline members faster than they can recruit them. This makes “exponential income” a damned hard thing to achieve.
- You’re competing with other network marketers for the same pool of prospects. Thinking you’re the only game in town is a huge mistake when you’re a network marketer. The number of people trying to build downlines is huge compared to the number of people actively looking for a network marketing opportunity. These opportunities are a dime a dozen, and if you’re not the most aggressive marketer out there (i.e., spending the most money on advertising and the most hours chasing prospects), you’re not going to make it very far.
- The income claims are unrealistic for most people. There’s only one reason a person joins a network marketing business – the promise of quick, massive piles of cash. Oh, and maybe the promise of exotic vacations. Most people won’t ever see income anywhere near the dollar figures those opportunities throw around. Hell, 98% of people who start network marketing leave the business in less than a year. (See “attrition rate” above and “everyone hates you” below for a more thorough explanation.)
- Everyone hates you. Let’s be honest. How many people wake up thinking, “Wow. I really hope someone hounds me to join an MLM business today”? No one, that’s who. Do you really want to tell everyone at the next cocktail party / family reunion / Alcoholics Anonymous meeting that you’re a network marketer? A powder blue leisure suit would probably do more for your social standing. Oh, and people online hate you too. Nothing screams “douchebag” like a forum signature pointing to “The Greatest Income Opportunity You’ll See This Year! Make $356,983,199 Right From Your Kitchen Table!”
My suggestion? If someone approaches you with a MLM opportunity, politely decline. Or fake a seizure. Whatever it takes to change the subject.
You can earn money online. Over time, it can even amount to several thousand dollars per month. But like most “shortcuts,” network marketing promises, but rarely delivers.
(Disclaimer: Yes, this post is mostly personal opinion, flavored with a few industry statistics and the experience of myself and others. You might be the type of person who gets into network marketing and earns a gazillion dollars. But I highly doubt it.)
Disputing Errors on Your Credit Report, Part 2
Posted by: | CommentsIn my last post, I wrote about the importance of disputing errors on your credit report as a means of raising your credit score. Today, I’d like to provide a sample dispute letter, along with the addresses of the three major credit reporting bureaus – Equifax, TransUnion and Experian.
Writing a dispute letter takes only a few minutes, but can save you a world of headaches when you’re trying to repair your credit. Think of it this way – someone else does most of the work, and you potentially get to reap massive financial benefits. A correction can make a difference of 30-50 FICO points or more, which significantly affects your ability to get a credit card, buy a house or get a job. It can even affect how much you pay for auto and home insurance.
So here we go!
……
Complaint Department
(Name of Reporting Bureau)
Address
City, State ZIP
Date
Dear Sir or Madam:
This letter is intended as a dispute regarding items on my credit report that are inaccurate. I have included a copy of my credit report with the inaccurate items highlighted.
The erroneously reported items are as follows:
(Provide a description of the entries you want removed from your credit report.)
To expedite the review process, I have included documentation showing that the items listed above are inaccurate. This documentation includes (list and describe each piece of supporting documentation.) I hope you find the documentation helpful when conducting your review and issuing a determination.
Thank you in advance for your time and attention to this matter. I look forward to receiving written documentation of your determination.
Siuncerely,
Your Name
Your Address
City, State ZIP
Telephone Number
Email Address
****
Here are the addresses where you will need to send the letters:
****
TransUnion Customer Solutions
P.O. Box 2000
Cheater, PA 19022-2000
****
Experian
P.O. Box 2104
Allen, TX 75103
****
Equifax Information Services, LLC
P.O. Box 740256
Atlanta, GA 30374
****