Credit Questions? Just Ask Nicole

Don't try to keep up with The Joneses!

This video cartoon demonstrates in a humorous way how trying to "keep up with The Joneses" can cause you to get way in over your head financially. Check it out...

Are Consumers Set Up to Lose When Resolving Credit Card Disputes?

The June 16th issue of BusinessWeek has a really interesting cover story entitled "Banks vs. Consumers (Guess Who Wins)."

It explores how credit card companies use the arbitration system to settle cardholder disputes.

Most cardholder agreements contain a "mandatory arbitration" clause, which basically means that you agree to use the arbitration process instead of going court in the event of a cardholder dispute.

If you don't recall seeing such language in your cardholder agreement, just pull it out and start searching - I bet it's there somewhere buried in all the legal-ese.

After reading the article, which cites several legal professionals with the inside scoop on the arbitration process, it becomes clear how the arbitration system is manipulated so that consumers lose and the credit card companies win.

Which, of course sucks.

An overwhelming number of credit card companies use the National Arbitration Forum (NAF) to arbitrate their cases, and the NAF uses tactics that favor the creditors and puts unsuspecting consumers at a huge disadvantage.

The article is a little lengthy but definitely worth the read. Especially if the arbitration clause in your credit card agreement says that you'll have to use NAF for arbitration!

You can read the article by clicking here.

There's a Spy in the Room!

Today I'm acting as a double-agent.

I'm going undercover to an all-day seminar that's specifically for debt collectors so I can spy on what they're up to.

You know, I have to stay on top of this kind of stuff for the good of my CreditSmart 101 students and NixFix credit restoration clients. :)

And after all, consumer complaints against debt collectors are on the rise.

And I just can't help it! This kind of stuff excites me!

I try to go to different credit-related seminars all over the country as often as I can.

Because the credit game changes so much and so often, it's very important for me to stay current on what's happening in the credit marketplace.

I can't wait to see what new information I'll learn and uncover this time.

And rest assured, any newfound "intelligence" will be used for good, not evil, as I will most certainly use it to further assist my clients with their credit needs.

Have a great day!

Consumer Complaints Against Debt Collectors Rise

According to the Federal Trade Commission, consumer complaints of violations of the Federal Debt Collection Practices Act (FDCPA) by third-party debt collection agencies rose 2.4% in 2007.

Are you surprised?

You shouldn't be.

There are still quite a few "bad" debt collection agencies out there that employ unlawful tactics to try to collect debts from consumers.

And unfortunately, there are still many consumers out there who are not fully aware of their consumer rights, and therefore, unable to even identify when their rights are being violated.

Imagine how many more complaints the FTC would receive if people actually knew they could officially complain about certain debt collection activities?

The #1 complaint received by the FTC was that collectors were trying to collect debts from consumers that they did not owe, an amount that was more than what the consumer owed, or a debt that was discharged in bankruptcy.

The #2 complaint was harassment - collectors calling consumers repeatedly or continuously, or using profane, obscene or abusive language.

Other complaints received included:

• threatening consumers with dire consequences the collectors legally could not, or would not, initiate if the consumer failed to pay, such as garnish wages, sue, seize property, have the consumer put in jail, etc.

• continuing to call the consumer's place of employment after being notified not to, or knowing that the employer does not allow such calls

• improperly contacting and revealing the consumer's debt to third-parties, misrepresenting themselves to third-parties, using abusive and harassing communication tactics with third-parties, and even trying to collect from the third-party

• failing to send required consumer notices, which should include, among other things, the amount of the debt, the name of the creditor the debt is owed to, and a statement that if, within 30 days of receiving the notice the consumer disputes the debt in writing, the collector will obtain verification of the debt and mail it to the consumer

• failing to verify disputed debts by ignoring written requests, sending no verification, and continuing collection efforts

• continuing to contact the consumer after receiving a "cease communication" notification

The FTC receives more complaints about the debt collection industry than any other single industry.

"Can a utility company report a delinquent account to a credit reporting agency?"

Answer:

YES!

Recap of Today's Show...

Today on Just Ask Nicole LIVE! I talked a little about:

• How the email update delivery system for this blog acts weird sometimes - sorry!
• The US Treasury Secretary's statement from yesterday about the current mortgage foreclosure crisis.
• "Alex's" (code-name) phone call to a collection agency and why she got hung up on twice!
• Does credit repair really work?

If you missed the live broadcast, you can catch the replay on BlogTalkRadio at your convenience by clicking here.

Hope you can tune in again next week! Tuesday at 2:00 PM EST.

Unpaid Cell Phone Bills and Your Credit

I was asked not too long ago the following question:

"Can an unpaid cell phone bill affect your credit?"

My answer: ABSOLUTELY!

When you don't pay your outstanding cell phone bill, you are in breach of the contract agreement you have with your cell phone provider. You agreed to pay them for the cell phone services they provided you, and when you don't pay, that causes a big problem.

So, your cell phone company will most certainly come after you for the outstanding balance owed on your cell phone account.

The first course of action your cell phone company will most likely take will be to restrict or terminate your cell phone service.

Secondly, they'll pursue collection efforts themselves, by calling you (perhaps on your home phone since they've probably already shut off your cell phone), sending you email notices, and sending you "final notice" bills and/or collection notices in the mail.

And lastly, if the cell phone company doesn't get an acceptable response from you, they will most likely wash their hands of the situation and outsource their collection efforts to a third-party collection agency, or turn your account over to their own internal collection agency/department.

When you have an outstanding cell phone bill and you don't pay it, your cell phone provider and/or the collection agency will, in most cases, report the delinquent account to the credit reporting agencies.

And that negative entry on your credit report(s) will have an adverse affect on your credit and credit scores. Something you DO NOT want!

So, if you have an outstanding cell phone bill out there, contact your cell phone provider, and see if you can work something out to get the situation resolved.

If there's already been negative reports made to your credit reports about the account, even go so far as to negotiate the removal of any negative entries made to your credit reports in exchange for the payment of the account.

And do it in writing!