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Looking for credit advice for a coworker...

V

Viper GTS

Lifer
A coworker told me yesterday about a problem she has.

She purchased a $1,200 PC from Gateway, on a monthly payment plan (financed by Gateway). She paid the ~$50 a month for about 8 months. Then she got a letter in the mail stating that the particular credit program she purchased the system under had been discontinued, so she would be unable to purchase any additional components on that plan. That didn't bother her, since she didn't plan on buying anything more anyway.

Fast forward two months, & she hasn't received a bill since that letter. She calls Gateway to find out what happened. After being transferred around 4-5 times, she was finally given the number for a collections agency. They turned her account over to collections. :|

So, she called the collections agency & was informed that she owed them $1,100, & that they had sent her a letter advising her of that (which she never got). Much like me, she is relatively soft spoken & mild mannered, so she didn't fight it. She knows she owes someone money, since she hasn't yet finished paying for the PC. She has paid the collections agency $300 of the $1,100 thus far.

Basically I need to know:

1) Will this negatively impact her credit? (I'm assuming yes, since it got sent to collections)
2) Will she be considered at fault for what happened?
3) Does she have any options to avoid having her credit impacted? She is more than willing to pay off the money, & is not terribly concerned about the collections fees, but she feels like she got screwed by Gateway & now they've vilified her.

She planned to simply pay off the collections agency, but I think she needs to do more than that, both to potentially reduce the amount she owes & to prevent her fledgling credit from being damaged.

Any suggestions?

Viper GTS
 
It may have no impact on her credit at all. Collection agencies don't automatically report the information to credit bureaus. In fact, many do that as a last resort so they can keep the threat as a hold card in their collection efforts.

Russ, NCNE
 
The problem with her credit isn't going to come from the collection agency, it will come from Gateway. If their financing company reports to the credit bureaus, they will more than likely report the debt as turned over to collections which will hurt her credit.
 
Tell her to check her credit report every 6 months or so. If something shows up, she should send a certified letter to each of the three main credit reporting agencies disputing the negative feedback on her credit report. She should include with the letter, any documentation (she should keep copies of all documents from Gateway and the collection agency). Once she disputes the negative remarks on the report, (I believe) the creditor has 30 days to respond and if they do not, the credit agency is required by law to remove the negative entries from her credit report.
 
Sounds like she got screwed over by Gateway. I am a soft spoken and mild mannered person also.. but not when something that is going to threaten my credit history. How can she still owe $1100 after paying $50/month for 8 months on a $1200 PC?
 


<< How can she still owe $1100 after paying $50/month for 8 months on a $1200 PC? >>




kt, it's called interest.
 
Ok, for the last post, thats a LOT of interest, sounds more like the collection agency is adding on fees for collection.

And if they touch her credit record then yes, DEFINITELY file a dispute, because that is a load of garbage.

I tell you what, I have to call three different companies this week alone because of being dicked around.
I'm so sick and tired of this type of crap happening....
 
I'm assuming the $1100 is a result of 1) interest (originally she was paying 16% on the PC, now she's paying well over 20%) and 2) collection fees.

I don't know what the balance was prior to the collections agency taking over, she may know.

I told her I'd try to get her steps to follow, since she has no clue what to do.

Viper GTS
 
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