How to Ensure a Debt Collection Is Legitimate

download (22)Your phone rings. Someone on the other end is claiming to work for a collection agency of some kind. He tells you that the purpose of this call is to collect a debt. A debt which you either do not remember owing or is so old that you thought it was gone. How do you ensure this is legitimately collectible?

The caller must identify who he is and who he works for. A legitimate debt collector will supply a phone number, business name and mailing address. A scammer will fudge around this or claim he does not have to supply this information.

The majority of collection agencies will send you a letter prior to calling you. Federal law requires them to send you a letter about the debt no later than five days after their first contact with you. Sending the letter first ensures they are following the law and eliminates the surprise to you when they call.

You have the right to have the collection agency verify the debt. You must do this in writing and I recommend you send the letter via certified mail with return receipt so you have proof they received the letter. A sample letter from the Consumer Financial Protection Bureau can be found at consumerfinance.gov.

Though there is no federal definition of what constitutes a debt verification, the assumption is that if they can prove to a judge that you owe the debt, then that is acceptable verification. So you should receive one or more of these items:

  • A copy of the original, signed contract.
  • A copy of the charge-off statement from the original creditor.
  • A copy of at least one cancelled check paid from you to the original creditor.
  • Information from the creditor that ties you with the debt (the creditor’s name, an account number, the charged off amount, the current balance and the last four digits of your social security number).

The collection agency has thirty days to supply this verification to you. During this time period, the collection agency cannot attempt to collect this debt in any manner and they cannot report this debt to the credit bureaus (note the original creditor can still report it).

Some things you should do during this thirty day period:

  • Check your credit report to make sure the debt is truly yours. The original creditor will report this as “Charged Off” if it has been transferred or sold to a collection agency. You may also determine the debt is too old under your state’s statute of limitations for the collector to sue you.
  • Contact the original creditor to determine who they sold the debt to. They can tell you this information. If the debt has been sold numerous times, you will have to follow the “chain of title” to learn who the actual owner is. And if it has been sold numerous times, the chances of this collection agency being able to verify the debt drops dramatically.

If the verification cannot be supplied to you within the thirty days, then the debt is uncollectible. But if they do verify it, the debt is collectible and the collection agency will add this to your credit report.

According to Clearpoint Credit Counseling Solutions, only 51% of debts are verified by collection agencies ( FTC Data on Debt Verification ). So you have a 50-50 chance of this collection disappearing on its own!

If you have any questions about this debt not being yours, do not spend time on the phone with the debt collector. You do not want to give any hint of acknowledging the debt is yours. Just tell the collector that you will be sending a verification request, confirm the mailing address to send it to and politely end the call. Then get that letter sent out ASAP!

7 Tips to Avoid Credit Card Fraud

download (21)Your credit card offers you access to a world of possibilities. It can not only help you in making payments, but it can also help you to improve your credit score. If you make the payments on time and use your card wisely, you can improve your credit score by leaps and bounds. However, if the card is misused due to negligence or fraud, your credit history and score can be severely affected. Hence, it is important that you avoid being a victim of credit card fraud.

Here are 7 tips that will help you to avoid credit card fraud:

1. Do not disclose your credit card info – You should never disclose your card number, security code, expiry date and other details of your card to anyone. These details can be used to make fraudulent transactions and so you need to make sure that no one has access to them. Even if you get calls from people claiming to work for your bank, do not disclose your card info to them.

2. Keep your card safe – It is very important that you keep your cards safe and away from the reach of other people. Place your cards in a bag or wallet close to your body so that it cannot be easily snatched away. If you use a purse, make sure that it is properly zipped so that the cards do not fall off from your purse. Also, instead of carrying all your debit and credit cards with you all the time only carry those that you need.

3. Be cautious when using your card online – When you use your card to shop online, be careful and make sure that you only use it on websites that are legitimate and offer SSL encryption security for online payments. If the site does not provide adequate security, your card information can be stolen and the same can be used for identity theft or for making fraudulent transactions with your card.

4. Keep a track of your account – Opt for mobile and email alerts to keep a track of your credit card account all the time. In case of any unauthorized usage of your card you can report it to the bank immediately. You can also access your account online through electronic banking and make sure that you are aware of all the transactions made with your card.

5. Keep your PIN safe – When you swipe your card at merchant outlets to make payments, you will need to provide a 4 or 6 digit Personal Identification Number (PIN) to authorize the transaction. Make sure that you do not share your PIN with anyone or write it on any piece of paper as it can be stolen and misused.

6. Shred your statements and other documents – Shred your credit card statements and all other documents that have your card information on them. Your account information can be accessed online and all other details will be available on your card. Even if you forget your password, user ID or PIN you can get them reset by contacting the customer support team of your bank. Hence, it is important that you shred all possible documents that include information about your card.

7. Inform the bank if your card is lost or stolen – In case your card is lost or stolen, call the card issuing bank immediately and inform them about the same. The customer support representative of your bank will then guide to you to get the card blocked so any unauthorized usage of your card can be avoided. The representative will also inform you about the steps you need to follow to get a new card.

Apart from the above, you should also ensure that the supplementary cardholders use their cards wisely and are aware of the procedures they need to follow to safeguard your account against fraud.

How You Can Make The Online Money Transfer Process Pleasant

download (20)One of the beneficial possibilities that the internet has brought forth is the possibility to send money online. Today, you do not have to be in the same locality or country with the recipient for you to be able to send them money, all you need is internet and a good service provider to send money across the globe safely and securely. Financial services have become robust and this means that you can enjoy low fees as an individual or a company sending money to your preferred destination.

Unfortunately, even with the great benefits of being able to transfer money online, there are risks involved, especially if you are not careful with the choices that you make. For instance, when you use a money transfer platform that does not have a good reputation, you could end up losing your money or end up charged heftily for the services. It helps to handle the transfer process with care so you can enjoy good results every time you send the money.

Know your options

If it is your first time sending money online, then you want to start by knowing what your transfer options are and thinking through them as well. You can choose an international bank that has branches across the globe to make it easier for you to send money or you can choose electronic transfers that are expedient and appealing today. There are so many online money transfer sites that you can use and some even offer free transfers to specific countries and nominal charges for overseas transfers. You are better placed to make good decisions when you lay all your options on the table and go over them one by one.

Get planning

The secret is that when you have enough time to plan for the transfer, you have increased chances of minimizing costs. Early planning means you will have enough time to compare money transfer platforms and other service providers, especially as far as fees for the transfer are concerned. Comparing also means that you can land offers that can save you a great deal of money with the transaction. It is very cheap and efficient to send money electronically, but it can get even cheaper when you have time to compare and choose the best platform.

Keep an eye on the fees

The amount of funds you intend to send can be eaten up by fees charged for the services. If you are a company sending money, consider sending larger denominations because smaller ones will always be more expensive as per percentage. Think about currency conversion rates that can affect the last amount that the recipient gets. It helps to be up to date with the current exchange rates so that you are sure of getting a fair offer from the transfer company that you choose to use. Verify the exchange rates if you have to and ensure that you are aware of all transaction charges before going ahead with the transfer

Why Paying on Time Will Be the New Trend: Credit Score in the Philippines

download (19)For a country with a budding consumer lending system like the Philippines, the idea of creditworthiness is as alien to many Filipinos as music is to the hearing impaired.

The numbers spell out just how financially immature the average Pinoy is. According to the National Baseline Survey on Financial Inclusion conducted by the Bangko Sentral ng Pilipinas (BSP) in the first quarter of 2015, only four out of 10 Filipinos are able save money. Of those who have savings, 32.7% deposit their money in banks, while 68.3% keep them at home. This is a rather small improvement from 2012 when the same BSP survey showed that 20% of Filipinos have a bank account.

Statistics from the credit sector also tell the same tale. The majority of Filipinos would rather borrow money from the informal sector like friends or family members (61.9%) or informal lenders (10.1%). Consequently, formal lending institutions get the smaller chunk of the loan market with banks turning out to be the least preferred money-lending option by Filipinos (4.4%). With the country’s promising economic growth pattern for the past few years, financial experts found that this credit-wary attitude of Filipinos has created a vacuum in the sector.

Before, it would’ve been deemed too much information for the general public to know about the intricacies of the credit system. But today, educating ordinary people about debt may prove beneficial in stimulating the dormant credit information ecosystem in the Philippines.

For the common Juan, understanding the “system” starts with the credit score. Much like how a person wants to know if he can trust someone before he lends the person some money, the credit score is a means by which lending institutions determine the amount of risk involved in granting a loan and reduce the likelihood of “bad” or unpaid debts.

A credit score is a numerical expression reflecting an individual’s creditworthiness generated by accredited accessing entities — known as credit bureaus — by analyzing an individual’s credit information. They usually range from 300-580, with higher values indicating more positive credit health. Computing the credit score involves assigning values to a person’s payment history, amounts currently owed, the length of credit history, accounts recently opened, types of credits in use, and number of hard inquiries on a person’s credit health. The algorithm and the weight given to each factor may vary from one credit bureau to another but the ratings will still create more or less the same impression of a borrower’s ability to pay out his debt.

So what does the regular consumer get from having a stellar credit score? Two words: better financing.

Creditors take the adage “time is money” literally because they literally lose money when payments are delayed which is why they value diligent payers.

Their valued clients are offered more flexible financing schemes, lesser interest rates, and are waived of extra fees. It’s also easier for them to get approved for bigger purchases like house or car loans.

But the thing with credit scores is that it’s much more difficult to build it up than to ruin it. Just one major red flag and it will stay reflected on your credit score for years, so one can’t be too confident about his credit score.