Got a collection letter

[jessyclk]

I have purchased a hosting/domain package from 1&1 last year. They apparently bill half of the package every 6 months, so they billed my account last year and they have tried to bill it again this February. The transaction was refused by my bank (not sure if it was due to funds insufficiency or some other reason) but nevertheless I have never received any communication regading the payment issue. Up until today when I received two separate letters from NCO Financial Systems, collecting $42.89 on behalf of 1&1. I called 1&1 to ask them what is the situation and they have told me that they tried billing me, the transaction was refused and they have emailed me an Invoice. I never got the email, the payment was not received so they have sent the debt to the agency.

I have canceled the account with 1&1
I have also prepared a DV letter I am ready to send it tomorrow

I pulled all three credit reports today and I noticed that there are no collection records on them. Is it possible that they are waiting for the 30-day period before they actually fully surrender this to the collection agency? Should I just pay to 1&1 instead and hope that they will drop it or should I proceed with the Dv letter? The letter reads: 'The named creditor has placed this acct with our office for collection. It is important that you forward payment in full. If you choose not to respond to this notification, we will assign your acct to a collector with instructions to collect the balance.'

Does that mean it is not fully in the hands of NCO yet?

And also, I have a question about the adress I should send the DV to. This is the adresses I have on the notices:

po box 15630 dept 99 wilmington de 19850
507 prudential road, horsham, pa 19044

I also called and asked where should I send letter and they told me this adress:

po box 15740 wilmington de 19850

And I also found this adress on the net:


6324 Fairview Rd, Charlotte, NC 28210

[boosami]

The letter reads: 'The named creditor has placed this acct with our office for collection. It is important that you forward payment in full. If you choose not to respond to this notification, we will assign your acct to a collector with instructions to collect the balance.'

Does that mean it is not fully in the hands of NCO yet?

It sounds like they have already placed your account in collections. However, it won't always show up on your credit report immediately, because it is up to NCO on when to report it. When they say "we will assign your account to a collector" they mean to an actual person who will hound you for payment.

It sounds like you are actually liable for this debt, and should pay it. Why did this happen? Did you forget to cancel and/or pay the account? If it was your mistake, I would first try and get 1&1 to pull the account back from NCO and have you pay them directly. Get a letter from 1&1 and NCO if possible stating that the account is not in collections. (You may need it if the collection ends up showing on your report later on.)

If 1&1 can't pull the account back from NCO, try to negotiate with NCO to pay the full amount but not report to the credit bureaus as part of the settlement. Again, make sure to get this in writing. From the letter you received, it sounds like they would work with you on this.

[jessyclk]

Hi there,

It is partially my fault, for not looking at their 120-pages user agreement which states that they will renew and charge automatically and they are not even required to let you know that they are charging you. I have not used it I pretty much bought the hosting & domain, used for some weeks and then deleter all the content. And I then completely forgot about it. But yes, 1&1 are crooked and they suck. They have the worst customer service ever. When you call their phone number, you get three choices: to press 1 for accounting, 2 for tech support and 3 IF YOU GOT A COLLECTION LETTER! What kind of a reputable web hosting company would have so many collections that they would need to have that option in their phone menu???

Anyway, they wouldn't let me discuss this. They just refer me to NCO. So my game plan is to now send a DV letter to NCO, if they validate, I will mail a PFD, if they dont - well hopefully that would be the end of it. I am in any case willing to pay in full, but I am definitely not willing to have that on my report for 7 years.

[AlligatorBaby]

Maybe you can see if they will lower the amount based on how long you used the account, since you deleted it early. If they won't just pay it and be done with it. It's $43 and not worth your time or the potential mark on your credit score.

[boosami]

I am in any case willing to pay in full, but I am definitely not willing to have that on my report for 7 years.

Even a paid collection stays on your report for 7 years. You need to make sure as part of the settlement with NCO that they agree in writing not to report it to the credit bureaus. If they have not reported it yet and you are quick to settle with them, the immediate is the best chance you have to avoid hurting your credit with this. I would call ASAP and tell them you are willing to settle with a no-report of the settlement account, and have them fax you confirmation that the account will not be reported to the bureaus. Then pay it and monitor your credit to make sure it doesn't show up. If it does, use the fax to dispute it from your report.

If NCO refuses and says they have to report it, it is going to hurt your credit even if you settle it immediately. If that is the case, try to negotiate for them to list the account as "PAID" only. Not "PAID SETTLEMENT" or "PAID CHARGEOFF" but just simply "PAID." Again, get it in writing so you can dispute it if they list it incorrectly. The collection account will still show on your credit report for 7 years, but saying "PAID" is the best option at that point.

Good luck, and read those terms more carefully next time!

[1and1 Class Action]

Let's File a Class Action against 1and1

I'd like to file a class action lawsuit against this company. Anyone with me?

1and1 is ruining people's credit if people let their subscription expire. That's crazy! I have plenty of hosting accounts on the internet, so I am very familiar with hosting policies. When a subscription expires, and your card is expired, your prepay doesn't go through. That then cancels the account.

But I guess 1&1 finds that it's profitable to threaten people with a collection agency if they don't prepay for the next term without clicking the 'cancel' button, which is not even available on your control panel!

Anyone else think this is an unfair business practice? I think we should contact the Abbey Spanier law firm and file a class action lawsuit!

[PetMom]

Also of note:

Paid in full of the total debt owed
and 'settling' the debt are different things
and likewise show up on credit report.

A written statement about how this
will be handled on the credit report
is needed (as suggested).

But, remember you still will need to check up
on this in a few months and find out if they
did end up doing this.

Be aware that paying in full while doing this process
they (debt collection agency) can keep your account
with them 'open' by saying your cashier's check/m.o. is
not going to arrive on time (never pay with a check
from your checking account - ever).

They can assess a late fee of up to $30.00 and have
you owe that and they try to get access to your
bank account to pay that that day so that it is considered
an 'on time' payment with no late penalities which keep
you in perpetual debt to them.