If you have been losing sleep over a debt that is now in collections, do not worry. It happens to the best of us.
What you need to know is how to go about the situation. Now that debt collectors have your number; there is no need to change it or start looking for a new apartment. No. I am here to help. Once you understand your rights and how to handle debt collectors, your life is about to become very easy.
In this review, we look at Paramount Recovery Systems, which is a debt collection company. I shall explain to you who they are, how they work, and most especially how to go about dealing with the debt.
So let’s get started.
Who are they?
Paramount Recovery Systems is a third-party debt collector located in Waco, Texas. According to the Better Business Bureau, they have been in the business for 17 years.
They have a B rating on the BBB website, and so far they’ve had 106 complaints lodged against them. Most of these complaints allege violations of the Fair Debt Collections Practices Act, such as false statements, failure to verify debts, and many attempts to collect on the debt that the customers did not owe.
If Paramount Recovery has contacted you, keep reading, because I shall give you some tips on dealing with debt collectors.
How do they work?
The BBB listed this company in 2002. They are, therefore, a legitimate company whose annual revenue is estimated to be $3.2 million. They currently have more than 40 members of staff working on their debt collections.
They mostly specialize in medical debt collections, which means that they collect debts on behalf of dental offices, private medical practices, hospitals, and emergency service providers.
Their staff is well trained to use technology-assisted skip tracing and letter writing techniques to try and collect on all delinquent debts; In addition, their call centers are equipped with “collection-based,” predictive dialing systems.
Each client is usually assigned to a team of collectors who are led by a senior-level manager whose work is to monitor the key performance indicators and provide monthly feedback to identify the reasons for delayed payments.
Paramount claims to comply with the Fair Credit Reporting Act (FCRA) and all of the local and state regulations, but as mentioned earlier, this company has been reported numerous times for not complying with the rules, and many customers have sued them on the same.
On Justia – the legal cases website, there are at least five civil litigation cases, of which Paramount Recovery is named as a Defendant.
Therefore, although this company certifies its collectors in the sensitivity training and customer service, they have been known to take an aggressive approach when dealing with medical collections.
They usually advertise a policy of viewing healthcare, medicine, and emergency services, not as a necessary public service, but rather a business contract like any other. E.g., they commit the emergency department to physician collections that provide superior customer service.
This is a company that has been known to go above and beyond the required regulations when collecting debts on behalf of their clients. As a result, they tend to leave a long list of unhappy customers who are more than willing to complain.
Some of their questionable tactics include;
The use of profanity or an abusive language when speaking with consumers.
Calling you before 8:00 am, or after 9:00 pm.
Calling you multiple times per week.
Talking to other people about your debt, such as your family, colleagues, and friends.
Calling you at your place of work.
Threatening to harm you, sue you, or destroy your credit.
Telling you, and everyone else that you have committed a crime.
Failing to notify you that you have a right to dispute the debt.
Trying to collect more than what you legally owe.
Tips on dealing with Paramount Recovery Systems
If Paramount Recovery Systems have already contacted you, the first thing you need to do is calm down, especially if you do not owe the debt. Most people never understand how to deal with debt collectors, and as such, they end up in a terrible back and forth situation with them.
Here are some tips on how you should handle Paramount Recovery Systems when they come calling;
Understand how debt collection works
Debt collection can happen to anyone, even the most financially responsible consumers. A bill may slip your mind, or you may have a dispute with a creditor on how much you owe, or a billing statement can get lost in the mail before you even know that the debt exists.
Occasionally, debt collectors even fabricate bonus debts in an attempt to scare customers into paying them.
No matter how desperately you wish, you could ignore the debt in collections, taking care of it is usually much better for you, and your credit score in the long run.
Once you verify the debt and pay, you shall stop receiving calls and letters for good, and this will also help you improve on your credit history, plus eliminate the risk of getting sued for the debt.
As with most negotiations, understanding as much as you can about the other party will always put you in a better position to get what you want out of a deal.
The goal of debt collectors is to make as much money as possible from collecting a debt, and so, they will do this in two ways. They can add fees on the debt as is allowed by state law, or the junk debt buyers can earn profits on a debt they have purchased simply by collecting on it.
A debt collector will only make money once a consumer pays the debt. They cannot seize your property or take money from your bank account unless they sue you and obtain a court judgment and permission to garnish your wages.
You must know your rights
Do you know that you have rights? Do you know that debt collectors are not supposed to harass you or threaten you in any way? You must get familiar with your rights; otherwise, debt collectors who are savvier and more experienced can easily take advantage of you.
Here are a few things you need to know:
They should never use harmful and unfair tactics when trying to collect on a debt.
They should never contact anyone who is not the owner of the debt.
They should never threaten you with referral to an attorney, harm your credit or even wage garnishment, unless they have the actual intent of acting on the threat.
They should never call you at unreasonable times, such as before 8 am or after 9 pm.
They must never contact you at your place of work or after you have specifically requested them not to do so.
They should never place any calls to inform on you to your employer or disclose any aspect of your debt to other people.
They must never use any profanities or obscene language during the calls.
They should never send collection letters which appear to be from a government court or office.
They should not threaten to arrest you if the debt remains unpaid.
You have many rights, and once you understand them, you shall be able to control how debt collectors behave towards you, when it comes to collecting. One thing you should know is that you can ask them to stop contacting you, and they are supposed to obey such instructions.
Ensure that the debt belongs to you
Do not allow debt collectors to keep pursuing you for a debt you do not own. There are procedures to be followed when validating a debt. In my article on Central Credit Systems, I have outlined a step by step guide on how to verify a debt when debt collectors contact you.
Debt collectors have been known to pursue bogus debts, and they attempt to collect on debts that you have already paid.
You must approach all debt collections with a healthy dose of skepticism until the debt has been verified and validated.
Five days after a debt collector contacts you, he is supposed to send you a debt validation notice. This should list how much you owe, the names of the creditor and the detailed steps you should take if you believe there has been a mistake.
Thirty days after receiving the notice, you should request – preferably in writing for the debt collector to send you a proof of the debt. Once they receive your verification request, they should not continue trying to collect from you, until they send you the evidence you have asked for.
Once they send the proof and you are satisfied that the debt is indeed legitimate, you can then proceed with the negotiations for payment. Otherwise, if the collector doesn’t have sufficient proof of validity, you must send them a cease and desist letter, asking them to stop contacting you and then you need to dispute the debt with the credit bureaus that reported it.
Get some leverage
You need to consider the leverage you have over the debt collector when you start negotiating with them. A few things can work in your favor, e.g., if you know that the debt collector has no chance in winning a lawsuit against you, he might be more willing to accept a partial repayment deal.
If the statute of limitations has passed, this means that the debt is not legally enforceable. The debt collector will have a tough time getting the courts to force you to pay after this period has passed, and hence you are in a perfect place to negotiate with them.
Warning: you must be careful not to accidentally restart the statute of limitations, which can be done by admitting to the debt and making a partial payment. This limitation varies from state to state and the type of debt.
Something else that would work in your favor is the credit reporting time limit. This period affects whether a debt has been listed on your credit report. In case the debt has fallen off the report and is scheduled to fall off soon, there is less incentive for repayment because it no longer affects your credit.
You may become motivated to pay off a debt because of your moral obligation, and also to ensure that you stop the debt collectors from contacting you. This will, however, not help you and may make things worse than they are. Therefore, it is advisable to do some background checks on the debt before you even begin any negotiations.
Generally speaking, the older the debt is, the more likely you shall be able to convince the debt collector to accept a partial payment.
Find out what you can and cannot afford to pay
Paying the debt is essential, particularly if it will help in improving your credit.
But, before you offer to pay it off, consider your financial obligations, and have a look at your budgeted income and expenses to figure out what you can afford. Also, consider whether you can pay it as a single lump-sum payment or break it up into a few payments at a time.
Understand how the payment will affect you
You must be aware of what the offer means to you. Your payment will be reported to the credit bureaus. Paying off a debt in collections does not necessarily mean that it will be scrapped off your credit report, and the credit bureaus shall still report it if it is within their credit reporting time limit.
This time limit is seven years.
Settling the debt may also have some tax implications. For example, if you pay more than $600 of your debt and it is canceled, the debt collector has got to report this cancellation to the IRS. You will then receive a 1099-C form for you to fill and include in the canceled debts as income to your net tax returns.
These points are crucial when dealing with any other debt collector other than Paramount Recovery. Remember that debt collection agencies regularly sell off debts to other agencies when they are unable to collect, and therefore, if you find yourself dealing with more than one collector, make use of these steps to make the process a smooth one.
It’s never easy dealing with collection companies, and most people are usually tempted to ignore their calls. This may seem like a good idea, but it is not. You will find yourself in more trouble than ever before if you decide to ignore them.
Debt collection companies can also sue you for payment of a debt, or put a lien on your properties. Wisdom dictates that you find a way of dealing with them, other than having a long drawn out legal battle that will leave you in more trouble than you were in before.