December my husband and I decided to go with a Credit Counseling service in order to handle the payoff of a large number of credit cards and debt.
We started a discussion with Marie Ward of National Debt Credit Counselling Corporation -a nonprofit organization. We were told that the service negotiates with creditors to lower APRs and monthly payments such that the entire debt is paid off within 5 years. During this time a lump-sum monthly payment is to be taken from our bank account and National Debt would be responsible for paying off each of our creditors.
We were also told that the very first payment we made would not be sent to our creditors, but would be a one-time "administration fee". For us this amounted to almost $600. We were very concerned because this was such a large sum of money that we could not pay it to both NDC debt for their fee and to the credit card companies; thus, this payment to NDC would cause our accounts to the credit card companies to be late.
We asked our sales rep, Marie Ward about this specific issue. Marie told us to send only the initial payment and not worry about a second payment to the credit card companies for December. She told us not to worry because we would be in an agreement with NDC and they would work it out with the credit card companies. She said that it was easy to smooth over and not to worry if we received calls from the credit cards telling us we were late; she said if they called us we should just refer them to the NDC customer service dept and it would be taken care of.
We asked Marie Ward if this lateness would damage our credit rating. She said "no" for the reasons stated above. She told us that once the credit card companies knew we had an agreement with NDC Debt, they would work with us on this.
Well, over the next couple months we received several calls by the credit card collection departments asking for the missing December payment (which went to NDC's fee). Each time I had to call NDC's customer service because despite what Marie Ward told me, the credit card companies refused to simply be referred to NDC's phone number. Each time I called NDC, and their friendly customer service people told me that they'd call the credit card companies and we'd stop receiving the collection phone calls.
One year later, December and my husband and I decided to check our credit report as we were thinking of buying a house. To our horror we find that 5 of the credit card companies that we pay via NDC debt have reported on our credit report that we were 30-60 days late -all due to that missing December payment (again, which went to NDC's fees).
This SEVERELY damaged our credit rating! When I called NDC Debt to ask about this, they told me that in the payment agreement (our contract with them) it states that we should keep our accounts current. Yes, that was the contract we signed, but Marie Ward the sales rep directly lied to us about this hurting our credit and she did so because had we known that we would've had to pay double the month of December to take care of their fee and the credit card payments, then we would not have gone with their service because we couldn't afford it. She DIRECTLY LIED to us and as a result we have damaged credit.
While the contract does say to keep accounts current it totally glosses over the entire first payment issue.
Because this woman lied to us our credit will be damaged by this for as long as 7 years.
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