I do have a question to which I am hoping you can assist (you did before back in April) here is the background. I have a MC credit card - I am the primary card holder. I opened the credit card with the intention of my daughter using the card for college (she did have her own card). She fell behind in the payments after graduating (she was making all the payments at first). I took over the payments. I have made several payments since mid-2011. In May 2012, I was doing an inquirying about the credit card protections plan - since I wanted to cancel it. I also wanted to find out about getting a new card, since the one I had lost somewhere in my house. I was then told I could not get a new card, becasue the account had been closed since September 2010. I was never told that the account was closed, never received an written notice,nor even when I dailed the credit card company, and punched in my account # XXXXX no mentioned of the account being close, even when I spoke with a live customer service, no mentioned of the account being closed. Of course now, when I dail the number and punch in my account # XXXXX I am told that the account is closed. So when I inquired about the credit card protection plan - I wanted to cancel it - to which I did (had to call another number within the company) But that department was telling me that the account was active. Anyway I cancelled the credit card protection plan. Then, I called back customer service and inquire if the credit card account was closed & expired since 2010, then how was it that the protection plan was allowed to continue to charged its monthly fee on my credit card. No one provided an answer. Since July, I have made several phone calls to offer a settlement of $4,000.00 I felt I was being ripped off with the monthly fee. The customer service people do not want to settle and they are telling me that it is the law, to report to IRS/Income Tax of the extra income I have because I am not paying the full balance on the credit card ($5800.00+) and that I will get a 1099 form..I told them that is not accurate information and I believe it is a form of scare tatic to get people to pay them. The credit card also indicate tht they will report this to the credit report. Told the credit card company, I am not worry about the IRS or the credit report (they already ding me) Regardless, I want to settle the closed account. I made an offer and they do not want to accept, but the credit card company continues to contact me to collect the full balance - they have my home # XXXXX work# XXXXX my email address (all this info and yet they could not tell me that the account was close?). I made my offer of $4,000.00 in good faith and indicated that my company may be downsizing, so I may not have the money next month. Then I filed a compliant with Consumer Financial Protection Bureau on 07/24/12. outlining the above. I did get a response from the credit card company 08/03/12 only confirming that the account was closed since Sept 2010 - they apologized for the difficult experience I had but that is it. No reason as to why the account was close, why I was never notified or why the protection plan was allowed to continue to be charged on the now close credit card. So it comes down to this: 1) Are credit card companies required to notified you when they decide to closed an account? 2) When an account is expired & closed - other than interest charges - there should be no other charges - is that correct? 3) What can be done in settle the account - as mentioned I made an offered of $4,000.00 I might be willing to settle for $4500. or $4800. but no more. I wonder if I write a check for $4000, or $4800. and write on the check front, settle in full and on the back of the check, write "cashing this check is accept and deam paid in full....or something to that nature. Please let me know your feedback.
one last thing, if the unsettle balance is reported to IRS, don't the
credit card company has to disclose that information in their "terms
and conditions" agreement or post it on their webseit?
1) Are credit card companies required to notified you when they decide to closed an account?A: No. There is no law or regulation notice that the account is closed. The only regulation is that the creditor cannot increase the interest rate on a closed account. 12 C.F.R. 1026.30. 2) When an account is expired & closed - other than interest charges - there should be no other charges - is that correct?A: Late fees and interest are permitted, but not a change in interest rate. 3) What can be done in settle the account - as mentioned I made an offered of$4,000.00 I might be willing to settle for $4500. or $4800. but no more. I wonderif I write a check for $4000, or $4800. and write on the check front, settle in full and on the back of the check, write "cashing this check is accept and deam paid in full....or something to that nature.A: A "full satisfaction check" under the Uniform Commercial Code requires a good faith dispute as to the amount of the debt. If you write "full satisfaction check, per UCC 3-311" on the back of the check, and the creditor cashes it, then you may be off the hook. But, the issue remains as to whether or not you have a good faith dispute. The issue concerning the card insurance might give you evidence of the dispute, but you won't know unless and until you defend the case in court. Another option is that if you let the debt go to collections and the tell the debt collector that unless it agrees to your settlement offer, you will immediately file for Chapter 7 bankruptcy, then that may cause the debt collector to accept your offer, because it will know that the alternative is that it will get nothing paid on the debt. A debt collector only pays 5-10% for a debt, so that already provides you with about 80% of a debt reduction, assuming that the debt collector believes you will actually follow through and file for bankruptcy. Obviously, if you aren't able to file bankruptcy, then your threat will go unexercised, assuming that the debt collector calls your bluff, and then you may get sued, and you could be garnished for the enitre debt. But, that's how the negotiation usually goes, and it's really your only leverage to reduce the debt.Hope this helps. NOTICE: My goal here is to entertain while educating the public about the law. I hope my answer is useful and informative to you. During our conversation, the website may ask you to rate my answer. If you rate my answer lower than the middle rating, then the website retains your entire payment, and I receive nothing. It is entirely your choice as to how you rate my answer. However, because your payment to me is in the nature of a donation/gift, rather than as compensation for any services rendered, you are entitled to know how your rating affects the final distribution of your donation. If you need to contact me again, please put my user id at the beginning of your question ("To Socrateaser"), and the system will send me an alert. Please Click the following link for IMPORTANT LEGAL INFORMATION. Thanks and best wishes!
Socrateaser - Thank you for your information. To be clear in question#2
the credit card protection plan should not have been charged in the 2 yrs correct?
What about posting of the 1099/IRS to their website? is it not the law?
And do you think it would help to write a response back to the credit
card company and once again asking why I was not notified and why
the charges of the monthly fee for the credit card protection continue to
be charged for 2 years ?
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