I want to preface everything I put in this report that my wife has a debt and it should/will get paid in full! I am not disputing the validity of the debt. What I am going to address is my experience with respect to the lies & misrepresentations asserted by Diversified Collections Services (DCS).
Before you read my brief story understand that the way the system is set up with regards to Collection Agencies and student loans is counter-intuitive. The system is framed in a way to encourge collection agencies to intimidate and keep the borrower in further debt and wage garnishments. I say this because this was/is my experience. DCS along with the 15-20 other collection agencies are all competing to be the number 1 collection house for the federal government student loans. With that status they are privey to millions in collections and repeat business.
More importantly, the collection process is unnecessarly difficult and very stressful. I'm going to lay out in bullet form what I gleened from the whole process and woven within this story will be my experience.
As it relates to STUDENT LOANS:
- There is are guarantor (entity that owns the promissory note).in our case it was ASA (American Student Assistance). They sell your note off to companies that collect from you and gather fee's for doing so. They are generally courterous and willing to work with you by setting up payments and such. The company that bought up our loan was SAF (Student Assistance Foundation). They didn't buy the promisory note, they only bought the right to collect for it. ASA still owned the promissory note.
- We were derlick in our duty to pay that debt on time and communicate with them. Our fault and we own that. When you sign a promissory note it clearly indicates that upon 'default' you will agree to pay the balance in FULL. We defaulted so we are legally obligated to pay it in full.
- So, SAF sold back the note to ASA. "you can have that back ASA, those dope's are NOT paying". ASA then took it back and then highers DCS (Diversified Collection Services)
- DCS is the dirtbag kid on the block that will do anything to collect for the person who highers them. The legal form of the mob if you will. This company has a bag of tricks at their disposal up to and including skirting violations of the FDCPA rules. Don't believe me? Just google it and read the horror stories. If only 25% of those stories are true, then in my heart they are dirtbags.
- My wife received a letter early July indicating she owed a balance of $50,000. So I called DCS representative assigned to her case to address this.in speaking with him I had 4 options;
1. Pay off the total amount.
2 - 4. Put down payment (s) (depending on the amount of the downpayment your monthly payment plan would vary) and set up monthly payments.
The bottom 3 options were obsurd. The lowest plan was roughly $1,700 with a $415 monthly payment plan. I was then instructed that I would have to do something in 2 days or they would start the Wage Garnishment proceeding.
I asked the DCS representative if the down payment went to the principle. He said "Yes!". [Lie].in fact it does not go to the down payment it goes to their (DCS) fee's, which is usually code for bonus's and or comissions. I verified that this was a lie with the guarantor (ASA). I was informed that those fee's or monies collected in the form of a 'downpayment' does not goto my debt our ASA at all. It stays with DCS.
However, the monthly fee's collected are divided out this way; 80% goes to interest and fees for the guarantor and 20% goes to the collection agency. NOTHING goes to principle.in our case that would be DCS.
- I called the DCS rep. Back a few days later to explain that there was no way to pay the $1700. He was NOT rude. He was just non-responsive to our situation (for which I was more than willing to submit documenation, pay stubs, tax returns and anything else they wanted for proof that we were/are BROKE!). He could care less. Basically asserting that since we are refusing to pay (which we were not) that he was going to start the Wage Garnishment of 15% per paycheck immediately. Needless to say the conversation eneded immediatly.
- I called ASA (guarantor) back for further information. I was informed that DCS was in violation of the FDCPA laws by speaking to me about my wifes account. LEGALLY they have to get a release from her (verbal or written) to speak with me. They did not, so they are now in violation. I was also informed that I qualified for the "Rehabilitation Program". Which states that all I have to pay in 1% of the total balance for 6-9 months. On that 6th month the guarantor seeks out other agencies to purchase the rigts to our promissory note. Because at that time they have a history of payments which looks good to other companies. NO DOWN PAYMENT REQUIRED.
- I then asked the ASA rep. What should I do now that I have demonstrated the DCS is misleading, lieing to me and un willing to work towards a solution. Not to mention in violation of FDCPA's laws. I was given a manager's name and extension to call.
- I called the DCS manager as instructed. I explained all that had happened and what the guarantor had instructed me to do.By the conclusion of that phone call it was all settled.
OUTCOME: A $300 down payment and a montly payment of. 5% (Yes, one half of a percent) of monthly payments for 6 months. After that I will be sent to another angency for lower payments and no more negative reporting to our credit scores.
General Info:
- Make sure you note every conversation and the content of that conversation with rep's. From collection agencies.
- Know your rights as it relates to your debt.
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