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payee messed up and sent me to collections

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rated:
weird but true story:

last year i paid a medical bill via credit card, roughly $500. they mailed me a paper coupon, which i filled out with my CC info and mailed back. no big deal in my mind; done this many times before. i tell my spouse (who handles all our finances) to expect a charge on the account. all taken care of.

suddenly, i get a collections notice for about $450 from someone i don't recognize. i write to dispute and validate, and get no response. shows up on my credit report, and i write to dispute that too. CRAs so far have not acted on my dispute.

as i was preparing my taxes, i came across the medical bill and copy of the payment coupon, and i realize that the collection notice is for that medical provider, and the bill is exactly 90% of the original amount. it dawns on me what happened:  when i paid the bill, someone at the office keyed in ~$50 instead of ~$500 paid. sure enough, our CC was charged exactly 10% of the amount due. my spouse didn't realize the discrepancy, because they knew to expect a charge, but didn't know the amount.

now i'm making arrangements to pay the full balance due (by cheque this time, to avoid further mistakes). but can anyone offer me guidance on the best way to deal with the collection agent and CRAs?  thanks!

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rated:
can you deal directly with the original creditor and clear the balance due? if that is reasonably not going anywhere, can you negotiate a "pay-for-delete" type arrangement in writing with the collection agency?

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Contact the CA and negotiate pay to delete.

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dealgain said:   can you deal directly with the original creditor and clear the balance due? if that is reasonably not going anywhere, can you negotiate a "pay-for-delete" type arrangement in writing with the collection agency?
  Just pay the original creditor.

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dealgain & stanolshefski:
certainly, i want to pay the original creditor. i owe the money! but they already demonstrated their incompetence once, by screwing up my payment. my concern is that they'll take their money, but won't do anything about the CA they sicced on me.

ZeeNUTS:
i don't want to pay the CA anything if i don't have to. i actually tried to pay my balance in full, but the creditor screwed up and sent me to collections. perhaps i should have noticed the discrepancy sooner, but practically speaking, so should have the creditor - and not responded by taking me immediately to collections.

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creditboards.com has a TON of material on this, with people who have had similar things happen and resolved them. I highly recommend checking that place out. There are probably many stickies too.

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crabbing said:   dealgain & stanolshefski:
certainly, i want to pay the original creditor. i owe the money! but they already demonstrated their incompetence once, by screwing up my payment. my concern is that they'll take their money, but won't do anything about the CA they sicced on me.

ZeeNUTS:
i don't want to pay the CA anything if i don't have to. i actually tried to pay my balance in full, but the creditor screwed up and sent me to collections. perhaps i should have noticed the discrepancy sooner, but practically speaking, so should have the creditor - and not responded by taking me immediately to collections.

  Pay the original creditor and get a receipt. Send a copy of the paid receipt to the CA. If they don't cease reporting you sue them.

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stanolshefski said:   Pay the original creditor and get a receipt. Send a copy of the paid receipt to the CA. If they don't cease reporting you sue them.
  

If they accurately report it as a paid collection for the next seven years, what do you intend to sue them for?

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taxmantoo said:   
stanolshefski said:   Pay the original creditor and get a receipt. Send a copy of the paid receipt to the CA. If they don't cease reporting you sue them.
  

If they accurately report it as a paid collection for the next seven years, what do you intend to sue them for?

  A collection agency can't report a collection that they don't have the right to collect on.

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stanolshefski said:   
  A collection agency can't report a collection that they don't have the right to collect on.


crabbing said:   suddenly, i get a collections notice for about $450 from someone i don't recognize. i write to dispute and validate, and get no response. shows up on my credit report


EDIT: I didn't notice the above when I first read the OP.
Crabbing disputed the debt, presumably within 30 days of receiving first notice of his dispute rights from the collection agency, and requested validation. Once that happens, the CA is enjoined from collection activities, including reporting to the bureaus, until they obtain validation from the original creditor and forward it to the debtor. So Stan is correct, at this moment in time it appears that the CA does not have the right to collect on the debt.

rated:
paying the original creditor is always the wisest thing.....ofcourse you need to establish paper trail and in writing that you are settling the debt to the last penny.........ignore the past incompetence....in this specific case you cannot put 100% blame on the medical firm.......you clearly own some percentage of the blame because it was just 1 BILL for you and you ended up loosing sight of it ($50 vs $500 posting to your Credit Card)...and your SO also missed it despite the fact that YOU PAID VIA PAPER COUPON MAILED BACK....just imagine you and your SO loosing focus on this one bill vs the medical firm fat fingering one item????
so ignore the past incompetence and this time pay via check....you will get to know in a short span whether or not they encashed the check....I would tell you not to complicate it more that it needs to be....

What stanolshefski said is very simple and straightforward

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dealgain said:   paying the original creditor is always the wisest thing
 



After, of course, explaining to the OC the error they made and having them recall the account from collections.
  

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jaytrader said:   creditboards.com has a TON of material on this, with people who have had similar things happen and resolved them. I highly recommend checking that place out. There are probably many stickies too.
  Yes go read WhyChats method on creditboards and follow it.

rated:
stanolshefski said:   
dealgain said:   can you deal directly with the original creditor and clear the balance due? if that is reasonably not going anywhere, can you negotiate a "pay-for-delete" type arrangement in writing with the collection agency?
  Just pay the original creditor.

  may not always work. I had issue once, some bill got mixed up, and was never paid, and collection called me.  After tracing thru paperwork, i realized it was my fault, and i called the original docs office to make the payment.  They said they can't do anything .. already sent to collection.  So i just paid up with collection agency.   But in my case i didn't see it on credit report ... so bit simpler.

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