Expert: Regan Shinski - 3/27/2010

Question
Sir,

I've been an active duty military member since 2002. In June 2007 I received orders for an overseas assignment requiring me to report 8 September 2007. During this time I was in a 2 year

celluar contract with Sprint. September 1st 2007 I contacted Sprint with a request to cancel my account and to have the $150.00 early termination fee waived. Sprint agreed when they

received a hard copy of my orders. I was told that the account was cancelled and was thanked for my service.

Two and half years later I received a notice from a collections agency requesting that I pay $566.50 to clear a delinquent Sprint account. This was the first and only notificication I received

about this debt. I spoke with the collections agency and the fee was reduced to $260.00, which I did not pay. I then called sprint and was unable to make any progress with them due to the

debt being transfered to the collection agency. I called back and forth between the two agencies until I was sure that I could go no further with either agency. I did my research and found the

number to Sprints Executive Coustomer Care () and spoke with a representitive that could actually explain, access and change my account. I faxed my orders per the reps

request and called back the next day. I was informed that mistakes were made and I was "erroneously" charged the $150.00 early termination fee. She immediately removed the charge

and associated late fees bringing my balance down to $304.00 again which I did not pay. She explained the remaining charges were for overage charges and the billing statement for

September which had not cycled through before I had cancelled. The Sprint Rep. would go no further when I asked to be allowed to pay what I owed and for the collection to be dropped from

my credit report. I was told that could not be done. The only route Sprint or the collection agency had for me to go was to pay the debt and have my credit report reflect that the collection
was paid in full.

I will be unable to close my VA home loan unless this collection is dropped, a paid in full will not be adequate.

My questions are,

Do I have the legal right to have this collection dropped from my credit history once I pay my original fair debt?

Is this an issue I should have a lawyer look into?

Does this issue fit into the The Fair Credit Reporting Act, section 611. Procedure in case of disputed accuracy [15 U.S.C. § 1681i], in which case I could file a dispute showing the inaccuarcy of the collection ( i.e.  the removal of the wrongfully charged and reported early termination fee portion of the debt ) and continue on my own?

Does the Soldier Sailor Relief Act provide me any protection?


The contract was entered into in New York, cancelled in California (where I'm a resident) and the collection notice was recieved in Alabama.

Thank You.

Answer
Hello Dan:

Thank you for your service, glad you are well, and sorry you have to deal with such stupid issues like this :)

The first thing you need to do is to send written dispute letters to the credit reporting agencies directly.  Nothing complicated, just they they are inaccurate and should be deleted.  They will respond back in writing in about thirty (30) days.  There is a chance this may delete it, but more importantly it gets them on records as "verifying" the debt.

Ideally you want a copy of a credit report that shows the incorrect amount reporting.  Even better, if they verify your dispute letter and still report the incorrect amount.

This is not only a violation of the Fair Debt Collection Practices Act (FDCPA) but likely the SSCRA.  I want to clarify that I am not a full expert on the SSCRA but I am pretty certain, if invoked, they cannot late charges or penalties.  See section 202 of that act.

Regardless, one you have evidence that they are reporting an incorrect amount you either threaten a lawsuit or actually file a federal lawsuit under those acts.  This usually get the collection agency to cave.  You can do this yourself - certainly in the initial phases - but an attorney can do it as well.  If you win, they have to reimburse your attorney fees.  in your complaint or letters you send them, you put in there that if this goes to court they will not only be responsible for your attorney fees but court costs, interest and moving fees related to the closing of your house, and punitive damages.  Any one of these will cost them more than the debt they are trying to collect and they are all serious possibilities if you decide to sue.  I would list Sprint as a co-defendant (and send them you intent to sue letters) since they turned over bogus information to the collection agency.

Additionally, because of the particularly troubling aspect of this case with you being deployed overseas, I would file complaints with any Better Business Bureau, state attorney general's office, and any licensing governmental agency in your state(s).  I would even consider contacting the media or other public forum that can spread the word of what is happening to you.  Send additional letters to Sprint higher ups and investor relations personnel.

It sounds, and is, a decent amount of work but any one of the options I listed can get the deletion you are seeking.

DO NOT PAY IT.  At this point, it is better to wait.  Paying it would be an admission of the debt and serves no purpose at this point.  It can also be a negotiating point for you.  Just be sure to get something in WRITING that says the account will be deleted from the three major credit bureaus if you pay or in any settlement agreement.

I'm sorry there is no immediate fix for this.  All these steps are typically in 30 day increments that's why I recommend blitzing all of them at once.

Finally, I would not talk to them on the phone unless you are specifically discussing settlement terms.  Even then, you should be LEGALLY recording the call.  In some states, you must give them notice that you are recording the call.  Recording the call often leads to them committing more violations of the FDCPA and gives you evidence of the possible settlement.

Good luck, I hope this helps

Regan