Charter Communications bungles collection notices

Few things are more annoying than getting notified by a collection agency that you owe money — when you don’t.

That’s been happening recently to hundreds of former Charter Communications customers across the nation. Charter’s billing system acted as if these ex-customers owed money for unreturned equipment when they didn’t. Fixing the problem proved frustrating.

The problem was caused by Charter’s conversion to a new billing system, but that happened two years ago. Only recently, though, were inaccurate bills for unreturned equipment sent out.

M.L. Bogan of Fort Worth disconnected her Charter service years ago. When she first received notice after her disconnection that she owed the company $25 for a modem, she explained that she had bought it.

Then last month, she started getting letters from a collection agency.

She called Charter to explain again, but a rep kept telling her to pay the $25 or return the modem.

“After going round and round in circles and getting nowhere,” she says, she finally got a supervisor who took ownership of her case. She learned that Charter actually owed her $4.81.

Case closed? Not that easy. A week later, she received another collection agency notice claiming she owed Charter $4.81. She made more calls to Charter.

She also called the collection agency, which told her there would be a $9.95 processing fee for her to collect her $4.81 refund, but if she paid the $4.81 to them, they would waive the fee. (Yes, I know that doesn’t make sense, but little of this does.)

She called Charter again and was told the company had to complete a form for her refund, then it would take six to eight more weeks to process the check. Her account with the collection agency would be cleared.

Then the Charter rep asked whether she wanted to stay on the line and complete a customer satisfaction survey. Really. (I would have!)

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When Nancy Fitzhugh of Fort Worth ended her Charter service two years ago, she sent her modem back. In January, a collection agency demanded $33.

She says, “Their approach was ‘It’s only $33, and it would be easier just to pay it.'”

When she refused, an agent warned her, “We are not going away.”

Oh, yeah? I shared her problem with my Charter contact. The calls stopped coming. Then last month, she received an unexpected refund of $45 from Charter.

Richard W. Cree Jr. dropped Charter a few years ago, and he returned his modem. After that, he kept receiving letters asking for $25. Each time, he’d call and explain that he returned the modem.

“This went on for over two years,” he says. A month ago, he received a demand letter from a collection agency in Florida for $33.

He visited a Charter storefront in Keller. A Charter rep told him she heard the same story from other customers.

Turns out Cree had a $95 credit on his account that he didn’t know about. After he received his refund, he took $25 of that to use for a gift card for the Charter rep who had been kind to him. Classy.

Charter spokesman Kevin Allen says, “These accounts should not have been sent to the collector, and Charter corrected this as soon as we realized the error that had occurred.”

The company is changing its procedures to review equipment returns and compare them with a customer’s credit balance before collection agencies are notified, he says. He estimates that less than 1 percent of Charter’s customers were affected.

What do you do if you get caught in a similar comedy of errors?

The Charter spokesman suggests: “Keeping detailed records and receipts is key. In the example of Ms. Fitzhugh, she had maintained detailed records including her receipt for returned equipment, which made her situation simple for Charter to resolve.

“In addition, Charter’s associates at our sales and service centers are trained to research and resolve all situations that arise. Visiting one of our community offices is another way to resolve an issue such as this.”

The Watchdog adds that federal law gives consumers protection when they are served with false collection notices. The Fair Debt Collection Practices Act is the rulebook for these situations.

Consumers wrongly dunned need to send a letter to the collector challenging the debt. That starts the clock, giving the collector 30 days to prove that the debt is accurate.

It ends up a battle between your paperwork and theirs, and that’s why keeping receipts for returned equipment is vital.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is available in hardcover, as a CD audio book, ebook and hey, what else do you need. Visit our store. Now revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

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How to get collectors off your back when the debt isn’t yours

Imagine you get a $500 bill from a debt collector for an old cellphone that’s not yours.

You call the collection agency to dispute it, but an agent hangs up on you.

You contact AT&T, the company that hired the collection company, and they don’t know what happened.

So you contact Watchdog Nation.

That’s what Marijo Malesa of Fort Worth, Texas did after getting the runaround.

“I have always paid my bills on time,” the Crowley school district librarian told me. “I have excellent credit, so I was concerned when I received a notice from Palisades Collection, Llc., very official looking, that I had an outstanding debt.”

I looked up Palisades Collection on the Internet and learned that the New Jersey company collects outstanding debt from past-due cellphone bills for AT&T and Verizon, among others. Some consumers complained that they were charged with debts that weren’t theirs.

I called Palisades and spoke to Chris, a floor supervisor. He said he couldn’t talk due to privacy concerns. So I had Malesa send him a waiver letter. After she did, no one from the company would return my repeated calls for comment.

Quickly, though, I found several problems with the bill sent by Palisades. The name on the bill was not the name listed on Malesa’s old cellphone bills. The account number was incorrect. What’s more, Malesa had never lived at the address listed for the account.

Also, the bill was from six years ago. In many states, a person cannot sue for debt that old. [Check your state law here.]

One way to get a collection agency off your back is to sue. That’s what a Utah woman did in 2007. She sued Palisades Collection in federal court, saying that despite repeated explanations, Palisades kept harassing her for an AT&T wireless debt she didn’t owe.

The year before, Palisades had sued the woman for $1,800, but that complaint was dismissed. After the collection agency resumed sending collection letters, she sued.

Judson Pitts, her lawyer in Salt Lake City, told me this week that this is not uncommon. He found that after phone contracts are canceled, sometimes companies report ghost debt to credit bureaus. Collection agencies go after them.

“It depends on the company, and whether they do a good job on keeping track of their records,” he said.

Trying to explain the truth to collection agencies is difficult, he added. “Most companies won’t accept any information that consumers give them over the phone because they assume they’re making excuses or being dishonest.”

Pitts said he settled the case with Palisades out of court.

Last year, in a Pennsylvania bankruptcy case, Palisades was fined $11,000 in punitive damages for “arrogant defiance of federal bankruptcy law.”

According to Consumer Bankruptcy News, a consumer denied owing money for a Verizon wireless bill, but the company contacted the person every day for 24 days using an auto-dialer and a computer. A bankruptcy judge found that the company ignored pertinent information from the consumer.

This week, AT&T figured out what happened to the school librarian.

AT&T spokeswoman Meredith Adams explains: “In researching the issue, we learned that Palisades mistook Mrs. Malesa for another customer with a similar name who had an outstanding AT&T debt from several years ago.”

She added, “To resolve this issue for Mrs. Malesa, AT&T has taken back the debt, and she should no longer receive notices from Palisades Collection. Mrs. Malesa’s credit has not been affected by the agency’s notices of collection. On behalf of the collection agency, we apologize for any inconvenience this has caused her.”

If this happens to you, the first step is to read the Fair Debt Collection Practices Act. It spells out your rights in any debt-collection process.

If you are contacted by a debt collector with an inaccurate bill, send a dispute letter by certified mail with a return receipt. Under law, the collector is not allowed to contact you for 30 days.

Demand that the collector provide proof that you owe the debt. If collectors can’t, they aren’t supposed to call again.

In July, the Federal Trade Commission released a report on reforming debt-collection litigation. Two recommendations would affect a case such as Malesa’s.

The report says states should require collectors to include more data about the alleged debt in their legal complaints, and should work to make it less likely that collectors will sue for debt that’s expired because of a statute of limitations.

Fortunately, Malesa doesn’t have to sue.

She cheerfully told me, “My name is cleared, and no one will be bothering me anymore.”

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Here’s an interesting anti-Palisades Collection website.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the book won two national book awards in 2009 for social change. Twitter @DaveLieber

Dave Lieber book that won two national awards for social change.