Friday, November 23, 2012

Don't sign up for airline discount credit cards unless you're going to fly soon

Well, I got rooked by US Airways and Barclays for $111.  It’s another case of throwing away money in the hustle and bustle of an estate settlement.  It’s not that much money, but it’s the principle of the thing.  This is unethical, deceptive behavior by the airline and the bank.

Just before landing in Los Angeles last May on a cross-country USAirways flight, I foolishly signed up for a credit card (VISA) that was supposed to give you one round trip for, I think, $199 on US Airways.  The only trouble was, I didn’t know how long it would be until I flew again.

I didn’t even see a bill in the mail for the card’s $89 annual “fee”.  I got a call from one of  Baclays’s collectors in August and “settled” it for a total of the $111 (the “penalty” for being a couple days late was $22; it could be worse).  

Today, I got a notice that the account had been closed for lack of use.  I’ve only had the card five months.
Is this a security procedure, or just a racket?

Tuesday, November 13, 2012

FTC has FAQ page on dealing with debt collectors, and the FDCPA

I thought I would share a Federal Trade Commission FAQ page on debt collection practices and the rights of consumers (according to the Fair Dent Collection Practices Act, or FDCPA), link here

The list of questions is long.  But some of the answers are surprising and important.

Yes, sometimes, a debt collection company can sue consumers, and get a court judgment resulting in wage garnishment.  That is generally the case(only)  when the debt collection company has actually bought the debt (which is a boutique business model in the debt collection industry).  Most federal benefits are exempt from garnishment, and that includes Social Security and veterans benefits.  I don’t see mention of IRS refunds in the exemption list.

A debt collector must stop contacting you if you send a letter disputing the bill (as with an identity theft situation), but can resume if the collector can produce evidence of the bill.

If you have multiple debts, you can direct how payments are applied among debts. 
Debt collectors will normally apply a convenience fee on payment by phone, and companies tend to discourage collections employees from waiving it.

The video below shows how collectors are trained about legal (FDCPA) violations: