“AMEX Negotiations” Archive
Feb
6
I received an email from a reader who finds himself in the same situation with American Express as I found myself in several months ago. I had significant balances with American Express which I knew I wouldn’t be able to keep up with given they were charging me 30% interest each month. Like this loyal reader, I too tried to get American Express to work with me on a reasonable payment plan with reasonable interest. As I mentioned in prior posts about my negotiations with American Express, you cannot reason with the unreasonable.
I had three accounts that were officially charged-off by American Express in 2007:
- AMEX Blue ~12K Balance
- AMEX Gold ~8.7K Balance
- AMEX Green ~1.8K Balance
In early December, the negotiations with the collection agencies that had been handling the AMEX accounts had stopped. The lawyer that I had been using–a member of my group legal plan–was dropped from the plan and my case was closed. Since then I have continued to receive phone calls–albeit less frequently–and numerous letters from the collection agency than is handling the AMEX Gold and AMEX Green accounts. The AMEX Blue account actually went back to AMEX.
In mid January, I received an offer from American Express to settle the balance on the Blue Account for 55% of the original balance. The offer came with several important caveats:
- Should I ever apply for an personal AMEX card again, any amount that was ‘forgiven’ would have to be repaid for the application to be considered
- Should I ever apply for an corporate AMEX card again, any amount that was ‘forgiven’ would have to be repaid for the application to be considered
From my perspective the only possible problem would be getting an AMEX corporate card. I currently have one with my current employer, an employer which I frankly don’t see myself leaving anytime soon. That said, there is always the possibility I’d need to take another job and apply for an AMEX corporate card. There are other corporate card providers, but AMEX seems to dominate that marketplace.
The other problem, quite frankly is that I don’t have $6,500 sitting around to send to AMEX, so a lump sum debt settlement isn’t in the cards. From my perspective, I’m left with the following options:
1) Repay everything in full over time, with payments that fit my budget. The accounts have already charged off so frankly AMEX would be happy to collect something each month on these account. Should I decide to head down this route, I will ask that upon payment in full, AMEX remove the charge-off entry from my credit report. The removal of the charge-off would likely be a deal breaker for me in this scenario, particularly given how inflexible they have been to date.
2) Settle for an amount less that the amount owed. Again, I would ask that the charge-off entry be removed from my credit report. If they didn’t agree to this, I’d ask that the charge-off be reported as ‘Paid In Full’ when settled for a smaller amount. This is probably the more likely scenario and until confronted with having to repay any forgiven amount, I’d just be done with AMEX and never do business with them again from a personal perspective.
3) Do nothing. Given the accounts are already listed as charged-off, my credit score has likely taken a big hit already. In the State of Washington, the statute of limitations for creditors to pursue collection is 3 years. After that, they cannot come after you BUT the negative credit information will remain for a total of 7 years. This is an undesirable choice because the creditors could sue me, something that is feasible given the amount of the debt. I don’t recommend folks take this approach.
Ethically I would like to try Option #1 and given my tight budget, this may be the only possibility for now. That said, if I could get the charge-off entry removed using Option #2, I would figure out a way to make this happen. I’m willing to take a calculated risk that the next time I would need to apply for an AMEX Corporate Card, I will be in a financial position that would allow me to simply repay anything that was ‘forgiven’.
I’ll keep everyone posted as I determine the best course of action. Now that the account has charged-off, AMEX does indeed seem a lot more willing to work with me to get things resolved. Of course, of monumental importance to me, will be getting those charge-offs removed from my credit report. Charge-offs are about the worst mark, with the potential exception being bankruptcy, that you can have, particularly if the charge-offs are recent.
Dec
14
Well just when I thought the shuffling with my AMEX collection accounts couldn’t get any crazier, I got the following letter in the mail yesterday (edited to protect my identity of course):
Dear Madam or Sir:
As of Tuesday, December 11, 2007 your case will be considered closed. ARAG has terminated their contract with us effective immediately and we are no longer able to represent you. We at XXXX,YYYY and ZZZZ would like to thank you for the opportunity of having represented you. Your file will be stored by our office.
Please let us know if you need a copy of your file.
Sincerely,
XXXYYYZZZ Office
You can imagine my surprise upon getting this letter, given that I was told just days before that progress was being made. Well, it looks like the shuffling will continue as I now have to find another attorney to handle these matters and essentially start all over again with the collection agencies. Truth be told, there are all new agencies handling my accounts at this point, so maybe this is actually a blessing in disguise.
I will keep everyone updated once I find a new attorney and what the strategy will be going forward.
Dec
11
As I mentioned in my previous post, my accounts with AMEX are still unresolved at this point, after several months of negotiations with the original collection agencies. The offers that were being made were between 50% and 60% of the original balances, with the condition that my credit report have no negative reporting associated with these accounts.
Unfortunately, before the collection agencies could respond, AMEX pulled the plug on Collection Agency A and sent the accounts along to Collection Agency B. This month, while my attorney once again sent out an offer letter, AMEX pulled the plug yet again and sent one account to Collection Agency C, another to Collection Agency D and the third and smaller account to Collection Agency E.
I’m not exactly sure what the strategy is exactly for AMEX, other than the fact that they seem fairly uninterested in negotiating–or having someone else do it for them–at this point.
All the shuffling between Collection Agencies doesn’t really impact me for the time being as my legal plan covers the entire matter. It does seem to be a fairly wasteful process on both sides, but I think AMEX would rather keep pressing me for full repayment as they know I work for a relatively stable company and have a regular income. What they don’t seem to grasp is just how tight and dire my finances really are at this point, i.e. full payment isn’t possible or it would have been done in the first place.
As the end of the year rapidly approaches–and many companies close out their fiscal year–I can’t help but think that the collection agencies might show some renewed interest. After all, they too have books to close for the year!
Oct
1
One of the things that has become painfully obvious to me over the past few years is that you should always be prepared for the unexpected. Well, I had hoped to be done with one of my AMEX accounts by the end of last week, and things looked good on that front. In fact, my lawyers and I had received the offer, in writing, from the collection agency. So why the bad news you ask?
The day after we got the offer from the collection agency, I got a call from a law firm who claimed to now be handling my account on behalf of AMEX. I immediately advised them to contact my attorney and as it turns out, these folks are legit. Now it is clearly just another collection agency operating as a law firm designed to scare me and force to make ‘immediate payment arrangements’.
The friendly employee of this law firm did indeed try and get me to tell him what kind of settlement offer I was looking for, but unfortunately for him I’ve been down this road before and told him to get in touch with my attorney.
So, we are back to square one, with this law firm holding the same bogus position as the collection agency, in that they “absolutely cannot accept anything less than 60% of the balance and will only report the account as ’settled’ “. Oddly enough, the collection agency gave me the same exact line, so the negotiations are back in full swing. My guess is this will drag out for another few months.
As a ‘precaution’ I am going through the process of filling out a bankruptcy questionaire, just in case I need to file in order to protect myself legally from these clowns. I am prepared to do so if necessary and am aware of ALL the consequences of doing so. There is another development, which I will post about in a later post that may indeed make this necessary, but hopefully not. Another lesson I am learning is that there are ALWAYS options. 
Hopefully, I will have some GOOD news shortly.
Sep
24
Well it looks like I have some good news to report. My lawyer called me today and the collection agency who is handling my larger AMEX account–a balance of just over $12K–has apparently agreed to settle for 50% of the balance. In addition, they have also agreed to remove any negative reporting to the credit agencies once the payment is received.
My lawyer and I both agreed that no payment will be sent until the offer is confirmed in writing along with the agreement. The collection agency indicated they would faxing over the settlement letter tomorrow.
So for a little over 6K, I will eliminate nearly 12K in debt, which will absolutely jumpstart my running totals. We still have some work to do on the other AMEX account, but it will certainly feel good once both of those account are retired and I can focus on managing my monthly budget/finances.
Hopefully I will have a confirmation to report tomorrow. I am also considering posting the letter–details blurred out of course–so folks can see what a proper settlement offer should look like in case you don’t have the resources available to you to use an attorney.
Sep
14
I spoke with attorneys yesterday and they have fired off settlement offer letters to the two collection agencies handling my accounts from AMEX. The offer, which both agencies have indicated they would accept is for 40% of the original balance owed, to be paid in two payments.
In addition, my attorneys have asked for any negative credit reporting to be deleted once payment is received. This too, has been verbally agreed to by both collection agencies.
That said, as I am painfully aware, nothing is ever complete and final until it is received in writing so we shall see how things progress. If the settlement was agreed to, this would knock out nearly $21K ($8,400 paid out of pocket) of my debt, so I am hoping things work out for the best.
The collection agencies have been given until the 24th of September to respond so I should have some answers in the very near future as to how this unfolds.
Aug
3
It has been a while since I have had any dealings with American Express so I wanted to keep my loyal readers (and my new ones) abreast of the situation. The latest, and most interesting development, was having my one other account with AMEX–which I have been paying on-time each month–sent to collections without any notification whatsoever. Fortunately, it was sent to the agency that my lawyer has already been dealing with so the negotiations should be swift.
As I reported in an earlier post, my lawyer had sent letters to the collection agencies asking for verification of the debts. To date, they have not responded and, as I come to find out, aren’t legally required to respond. This is interesting, given I have the legal right to dispute the debt under the Fair Debt Collection Practices Act (FDCPA).
Regardless, I have advised my attorney to start the negotiation process with both collection agencies. There are two key things that I would like to get from the process:
- Settlement of the debt for less than the total amount due as I simply don’t have the means to pay that amount in a lump sum.
- Deletion of any negative credit reporting to the major Credit Reporting Agencies (Equifax, Experian and Trans Union). This is commonly referred to as a “pay for deletion”.
My lawyer has indicated that both of these are quite possible, particularly given the amount of the debt I owe to AMEX. The process will probably take another few months to completely wrap up, so in the meantime I am stashing away funds so I can pay whatever settlement is reached in short order.
I will keep you all posted as things move forward.
CLARIFICATION: Although there is no legal time limit for the collection agencies to respond to the debt verification request, they cannot continue to pursue the collection of the debt until I am given a written verification of the debt.
Jun
15
Even my attorney cannot clearly determine, after looking at all the correspondence and my credit report, who exactly still owns the debts from American Express. As a first step and in an effort to determine who really owns the debt, the debts will be be verified in accordance with the Fair Debt Collection Practices act. Yes, this is little more than an attempt to make the debt collectors wait longer for any kind of settlement but it is also a potential avenue for them to make a mistake, in which case I will not owe anything. I don’t anticipate this to be the case so I have planned on settling the debt and am setting the funds aside to do so.
Assuming the debt is verified, my attorney will then try and secure a settlement of 40% of the original debt, along with the stipulation that any reference to a collection account be deleted from my credit reports and that AMEX will report the account as ‘paid in full’ rather than settled or charged off. I think the collection agency will oblige because logically they have no reason to keep the negative reporting on my report if they get paid. Collection agencies, particularly around the end of the month, just want to get paid, period! I will likely have to settle for something in between what I want and what AMEX will do in terms of reporting the debt, however. That’s fine to be perfectly honest. No matter what happens it will take a few years for my credit history to rebuild itself. In the meantime, I will use a debit card that either gives me frequent flier miles or cash back for the everyday things I need to buy, i.e. gas, groceries etc.
I hope to have some more definitive news in a few weeks once the debt is verified and the true negotiation begins. Who knows, perhaps the collection agencies will screw up and the debt will just disappear. Okay, wishful thinking
Jun
9
As you all know the debt has had me pretty stressed out the past few weeks but with negotiations underway to settle the AMEX debts and the details of the DMP to be settled on shortly, I do see some light at the end of the tunnel. The good news is that on Friday I officially signed the retainer for my attorney (all covered by my group legal plan) and I no longer have to deal with the clowns at the collection agencies. For now they will remain nameless but I have checked them out on several sites, including My3Cents.com and RipOffReport.comand it looks like my opinion of these firms isn’t far off. My lawyer called both firms while I was in her office and informed them that no contact should be made with me going forward; she also fired off a letter to this effect as well. She seems like a ‘touch cookie’ just like me in terms of her negotiating style, so I am confident things will get resolved to my satisfaction with my credit relatively intact and my payment only amounting to a fraction of the original debt. Again, I cannot help but wonder why AMEX would want to NOT work directly with me and collect all their money, but based on other readers’ response to AMEX, I’m actually kind of glad that in some small way I will stick it to them. I will, of course, keep you all posted on how the negotiations progress and I hope to share the lessons learned from this process with all of you. I realize not everyone in my situation will find themselves fortunate enough to have a group legal benefit at their disposal so I hope to share some tactics, letters and other tidbits that may allow others to deal with a similar situation on their own.
