How do I negotiate with a collection agency?
As always, make sure you correspond in writing (or get telephone agreements in writing) and send everything via certified mail. Also keep a log of the names and contact info for the people you deal with. Verify that the company on the other end of the phone is actually the same company the school sold the debt off to… otherwise you could be throwing your money away. Remember that there is absolutely zero incentive for them to follow through with reporting your payment to your school after you pay them. Plus, collection agencies are staffed by cretins… so… play it safe, get everything in writing before you pay up. An agreement with a corresponding receipt should be enough for your school, but I would keep calling and asking around admissions until someone can verify how this process works exactly. Someone must know. Good luck!
First of all, you need to be absolutely certain that the collection agency has actually bought the debt from your school. It’s possible the school still owns the debt, but has outsourced collection to the agency. If the school actually owns the debt, mail a $299 check to the bursar’s office with a letter and see if you can just get this to all go away. Otherwise, keep in mind that the collection agency bought this debt from the university for pennies on the dollar. While they may play hardball, they should actually, in truth, be thrilled to get $299 from you. You could try offering them that price in writing with a promise of immediate repayment and see if they’ll accept your offer. Also, your original contract with the school should have stipulated interest rates and late fees as part of the agreement. These terms should (IANAL) apply to the collection agency that bought your debt as well and you can insist on them.
Attempt to pay the University. If they refuse to accept it, ask to speak to the manager of the accounts receivable section. If they still refuse, ask for proof in writing that they have sold the debt, and how much they have sold it for. If they refuse again, ask for the manager’s name and mailing address, and send a letter to both them and the agency stating that you will pay the debt on receipt of proof that the debt was sold, including a statement of how much it was sold for, and that they assure you that good-faith efforts to contact you before selling the debt were made; OR you will pay the original debt to the university in full, and the university may then decide for itself whether to give the debt collectors any of that money. Call the agency. Ask them for proof in writing that they have bought the debt from the university, as without that proof there is nothing whatsoever to distinguish them from any common scammer.
Typically, collection agencies buy the debt they’re collecting for about 25% of the original. I’ve successfully negotiated several claims on this basis, beginning at 25% and usually wrapping about around 33%. They hate this, and they dislike informed consumers, but not a single cent you pay will be going back to the University. What you’re dealing with is a company that is holding your credit score hostage. Of course, it’s best to avoid things getting to this point, but we can’t always help that. Good luck!
