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Credit One & Midland Credit Management Tango...


stickyfingers
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I'd mentioned in other posts but I was a CB regular for a long while but, having been back for a while now in '22, I've sorted the few issues I had and I'm in the "let things age for six months" period but, to combat boredom while I wait, I offered to take a look at the reports for a friend of my wife's (who is going through a divorce and wants to have her credit straightened out for when it's final) and, while the approach for most of her items are straightforward, there's an interesting one with Credit One (OC) and Midland Credit Management (CA) I thought I'd run past the hive mind...

 

So she had a Credit One card which she was certain she paid in full and then closed. When I looked her (hard copy) report, I see a high balance of ~$650 in August of 2020 which gets PIF in April of 2021 and stays at $0 through November of 2021. She claims when she PIF'ed she followed up with a request to close the account.

 

However, the account continues to report as open through July 2022 and, you guessed it, in December of 2021 it appears the card was hit with the new annual fee ($39) which somehow (late fees and the like one imagines) grows to $277 in June 2022.  As of July 2022, the account status on the Credit One entry reads "Paid, Closed."

 

She's certain the account had been PIF'ed and closed (it's unclear to me if she paid *another* $277 in June to clear the balance and late fees, I've asked my wife to reach out and confirm).

 

The MCM entry has a "Date opened" of December 2021 which is odd because, on the Credit One line, her account shows as "current" in December 2021 (with the $39 balance) as well as January 2022 (with a $67 balance) with the first 30 day delinquency on the Credit One account reporting in February 2022. Lastly, the MCM entry lists $880 past due as of July 2022.

 

In my own personal credit repair experience, I've never worked with something so recent to default so this is why I'm reaching out to my CB peeps. While I'm working to sort the best plan of attack, there are some oddities right?

 

1. How does MCM have a balance due of $880 when the OC has a "Paid, Closed" entry? (and she's entirely sure she PIFed - I'm not vouching for her, just relaying her statement to me)

 

2. She's even amenable to PIFing (again) the balance if the Credit One and MCM entries can be removed. She's angry as heck with Credit One but when I mentioned to her in passing that, this close to the delinquency, a PIF might be her best/only bet she said if it would go away, she'd "write those rat *Admin and our Terms of Service prohibit profanity*s one last check." But there might be enough inconsistencies in the reporting, she might not need to go down that road yes?

 

3. Going from a $39 annual fee to a $900 balance due in seven months seems nuts!! Holy greedy fees Batman!! 

 

In any event, I'd appreciate a second/third/fifth set of eyes and brains to opine what the best course forward would be (again, I've never really dealt with reporting items this new)

 

TIA CB folks!

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Pull out her certified letter that they signed for on the closure. 

 

I can only HOPE she closed in accordance with the Agreement.  A phone call is generally not sufficient, and anyone who understands the pond scum cards KNOWS that such closures need to be in writing to preserve rights. 

 

And what did she do with the statements which came in the interim?  There is no reason for it being ignored.  She either got the email or she got them in the mail.  Remember also that the STATEMENTS are what she needs to be looking at, NOT the reports. 

 

Oh, and since divorce was referenced, make sure she understands that a Court decree directing another party to assume responsibility will not be binding except and unless the bank was afforded an opportunity to respond.  More than once, we have seen one spouse directed to make payments and they don't do so...then comes the collection activity against the original spouse. 

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2 hours ago, centex said:

Pull out her certified letter that they signed for on the closure. 

 

I can only HOPE she closed in accordance with the Agreement.  A phone call is generally not sufficient, and anyone who understands the pond scum cards KNOWS that such closures need to be in writing to preserve rights....

Same first question I asked "I hope you sent your cancellation in via mail and tracked..?"

 

Of course the answer was "No. I did it over the phone..." 🤯

 

So I told her it was likely going to be a "he said she said" kinda thing and that Credit One is a known bottom feeder.

 

In the event it's going to come to down to her not being able to prove she canceled is PFD to the OC her most expedient form of action? Or is it worth trying to pry apart some of the inconsistencies in the reporting between Credit One and MCM?

 

'Preciate the reply centex!

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Remember that 'date opened' is simply the date that a furnisher opened their tradeline. 

 

If Credit One sold the file, they should be reporting as a zero balance now and have nothing more to do with the matter.  I hope she can negotiate better than she can close an account and hope for a PFD

 

In the future, she needs to be more attentive to her accounts...otherwise post-divorce life will ALSO be a trainwreck.

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on the kiddie site it seems cred1 is sensitive to CFPB complaints. Are you saying she received no confirmation of closure and ignored statements?

 

and I assume she's looking at paper copies of her reports?

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1 hour ago, centex said:

If Credit One sold the file, they should be reporting as a zero balance now and have nothing more to do with the matter.  I hope she can negotiate better than she can close an account and hope for a PFD....

...but should she approach Credit One (OC ) or MCM (CA) when hoping for the PFD?

 

In my own personal experience, I've only dealt with CAs past SOL (but, again, she's not well-off but she could come up with $1,000 within a few weeks if a PFD was viable) and I've never personally negotiated a PFD (though I'm reading up a fair bit in my free time) so it's unclear if, with something this new, I should go to the OC or the CA for the PFD (and if I go to the CA, doesn't that mean she'd be left with the OC reporting for the full seven?)...

46 minutes ago, hegemony said:

on the kiddie site it seems cred1 is sensitive to CFPB complaints. Are you saying she received no confirmation of closure and ignored statements?

 

and I assume she's looking at paper copies of her reports?

Thanks for the CFPB tip!

 

And yes, after hearing how she got into this (cancelling via phone) when I offered to take a look for her, the first step was ordering paper copies! CB raised me well. ;)

 

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Look, if Credit One sold the file, they have ZERO say in the matter unless she is REALLY good and can persuade them to repurchase a single account.  In this day and age, I don't see that happening. 

 

Negotiation is with the owner of the paper and if Midland is reporting with a balance, then my guess is their letters to her describe themselves as the owner of the account.  If they were working it just as placement paper, they would not be able to report...

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You can get anything you want done by filing for arbitration with Midland. C1 did the EXACT same thing with me ..... ran a zero balance up to $800 in a few months with fees, penalties for not paying the fees, and interest on everything. They then sold it to Midland, who I made very sorry they bought my account. Cost them north of four figures to get rid of me. You MUST file for arb BEFORE they sue. The contract forbids arb in small claims. And yes, the agreement states you must close the account in writing. You can use the angle that their fees violate the TILA statute. Doesn't matter what you use, tho, they won't arbitrate. Initial fees for them are 5K and non-recoverable.

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Midland is a tough one.

They have lived with me for years.  I had a couple of accounts with them in 06 07 and tried all of the tricks in my bag.  I even was able to get friendly with the receptionist (the office was in my city), which did not help. 

It just eventually aged out and went away.

 

 

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@legaleagle2012 I'm sure I can do some arb digging (and will) but, up front, given that it's not my account, if I were so inclined, would I be able to accompany my wife's friend in an arb hearing/call or is it limited to only the individual party and/or counsel (I'm not a lawyer - though I'm sure I wasn't fooling anyone in that regard)..?

 

I might actually be inclined to pursue the arbitration route here on her behalf but I don't know if that's allowed in arbitration. You seem more experienced than most, can you bring a "second" to an arb hearing who is *not* a lawyer..?

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Yes you can. That's one of the good things about arb. FILE before they sue. Altho with Midland, you won't have to worry about any arb taking place. They will refuse as usual; they will be starting out about 4,000 in the red if they arbitrate. Would you do that? After they refuse, you can make lots of trouble for them.

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@legaleagle2012 - I think I'm ready to get on the arb train! ;)

 

In my (albeit limited thus far) research, I've a few questions:

 

1. It seems like the two main arbitration companies are AAA and JAMS - is there any particular value in choosing one over the other?

2. In terms of actually filing for arbitration, it appears I file directly with the selected arbitration group (JAMS or AAA) and they contact the other party (i.e. I'm not sending the arbitration request to the CA via mail or even directly myself) - correct?

3. I'm inclined to get this ball rolling sooner rather than later. Any reason to not file as expeditiously as possible?

 

I'll be off to educate myself as much as possible regarding arbitration over the next couple weeks (I'm not solely relying on posters here on CB but I'm also happy to avail myself of the knowledge of those who are more familiar with the process) so are there any useful "Guides to Arbitration (for consumers)" out there..?

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JAMS is more expensive and a little more consumer friendly. As stated previously, file before they sue, because if they do it will be in small claims and arb is prohibited in small claims in the cardholder agreement. Just file and print out a copy and mail it to them.

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4 hours ago, legaleagle2012 said:

Just Midland, they own the account. C1 is out of the picture.

...but they're also reporting and my goal was to see if I can get both TLs removed.

 

Is there a mechanism to remove the C1 TL after a (hopefully) successful arb with Midland?

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52 minutes ago, stickyfingers said:

...but they're also reporting and my goal was to see if I can get both TLs removed.

 

Is there a mechanism to remove the C1 TL after a (hopefully) successful arb with Midland?

What is incorrect about the reporting?

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@centex - I appreciate where you're coming from and, I suppose, technically your point is well-taken - it's likely all "accurate."

 

It's also fair to say she should have known she was signing up with a shady institution who makes their money doing shady things. All that is fair.

 

But, yes, absolutely I'm looking to help her by any means available which means thinking outside the box (which, generally, is what the arb approach is IMO).

 

As I said earlier, based on her reports, I can see that the story she told me holds - she got it, realized it probably was a bad card company and PIFed and (believed she'd) canceled it - only to have another annual fee hit months later (with zero activity) and quickly become an $800 balance.

 

I understand and can appreciate the "Consumers need to be more educated/informed/diligent" POV but I'm also quite sympathetic to the power imbalances at play too and want to help (if I'm able). If predatory lenders can embrace questionable practices to make money, I'm ok finding potentially questionable (though I'd always stop well short of "illegal") approaches to remedy to situation.

 

Just looking for some outside of the box ideas...

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