Sunday, March 1, 2009

FCNB Spiegel credit card - collection question

I received 2 leters in the mail, both stating that a lawsuit has been filed against me by Midland Funding LLC. the first letter is from "American Mediation & Alternative Resolutions", the other from "Ferrey & Nicholas, Inc." both want to work with me to settle my case before trial. To begin with I have not been served with a summons for a lawsuit. I called the small claims court clerk and she would only say that I have not been served yet and the address she quoted was the wrong P.O. box number on the case. From what research I have found it is for a FCNB Spiegel credit card I had a few years ago. I fell on some hard times and got behind on my payments. I then was contacted by "NAFS Collections"with whom I made regular payments that were automatically deducted from my account. Then one day they called and said that I had to settle the account and they would accept $463.02 to be paid in full and I had to do it that day because it was the end of the month. I made the payment but I never recieved anything in writing saying it was paid in full. Now this. I'm not sure if just copies of checks made out to this collection agency will work to prove I paid since there is no account number on it to reference and I never got anything in writing, also is Midland Funding LLC the same as NAFS Collections and Midland Credit Management Pinnacle Financial Group. What should I do now, I have not been served and since the address is wrong the court clerk said I can go there and be served? I don't want them to go to court and not be there, I will lose for sure.

My answer:

1. Spiegel Group Inc., went bankrupt in 2003 and effective June 30, 2003, the New York based Cardholder Management Service (CMS) took over tracking and collection of about 4 million credit card accounts, replacing First Consumers National Bank (FCNB), the Spiegel private label card issuer.

2. American Mediation & Alternative Resolutions and Ferrey & Nicholas, Inc. are each debt settlement companies that were trolling public records looking for lawsuits, and trying to drum up business for themselves. These two have nothing to do with your alleged debt or the lawsuit. You can safely ignore their letters.

3. Although you have not been served with a summons, you actually know about the lawsuit. Not only do you know about the lawsuit, you talked to the court clerk and they know that you know about the lawsuit. No doubt a note was made in the clerk's file when you inquired about the case, and you cannot deny that you know about the lawsuit. Actually receiving the summons is not essential since you in fact know about the lawsuit. That's all the summons does anyway. It informs you of the lawsuit. The clock is ticking!

Except, of course, if you live in Texas. The Texas courts have made some strong statements about the necessity of actual service. Many other jurisdictions are not as picky and look to evidence of constructive notice. The best you can do when you know you've been sued, however you get that knowledge, is to act quickly. In this situation, delay is not your friend.

4. NAFS Collections (probably National Action Financial Services - Williamsville, NY) is not the same company as Midland Credit Management, and Pinnacle Financial Group is a different company yet. Midland Credit Management is likely related to Midland Funding LLC, but I'm not sure. This needs to be researched or verified.

5. What must be done immediately is to go to the court clerk's office and get a copy of the complaint, which then must be answered pronto! Remember, they have the burden of proof, and since it has been bouncing around from collection agency to collection agency for years, they might not have the paperwork anymore. Spiegel is long gone. You may also have a statute of limitations defense in addition to the fact that you already paid.

Does this Spiegel debt show up on your credit report?

Monday, February 23, 2009

American Express may pay $300 to close account

"Pay off your entire balance between March 1, 2009 and April 30, 2009, and we will send you a $300 value prepaid card1 to thank you2. Enrolling in this promotion will automatically cancel your account."
link to AmEx offer page.

This offer is not available to all American Express cardholders, and the verification code is being delivered by mail.

If you receive the offer, enroll by February 28, and pay off your account balance in full before April 30, 2009. they promise to send you a $300 pre-paid AmEx card.

Sunday, February 22, 2009

12 Ways to Get out of Credit Card Debt

  1. Stop running up balances
  2. Find your best offer
  3. Stop the solicitations
  4. Pay more than the minimum
  5. Cash in investments
  6. Turn to friends and family for a loan
  7. Consider a home equity loan
  8. If you have a 401(k), consider borrowing from it
  9. Renegotiate terms with your creditors
  10. Consider the debt doctors
  11. If all else fails, file for bankruptcy
  12. Create a budget and live by it

Tuesday, January 20, 2009

Credit card poll - January 2009

Have any of these actions been taken by your credit card provider this year?
  • Credit Card Account Closed (22.9%)
  • Credit Limit Lowered (38.4%)
  • Credit Limit Increased (28.0%)
  • Interest Rate Increased (54.9%)
  • Interest Rate Lowered (12.4%)
  • Some Fees Raised (22.8%)
  • Some Fees Reduced (2.1%)
  • New Fees Added (14.3%)
  • Rewards Program Changed (11.5%)
  • Other Changes Raising Costs (6.8%)


Credit card interest rates - January 2009

Average annual credit card interest rates in January, 2009 according to

Jan 2009July 2008Jan 2008
Prime: 12.94%14.09%15.46%
Sub-Prime: 20.02%20.94%22.78%
Punitive: 27.99%29.0830.16%

Note: Average Rates based on FICO Credit Scores.
Super-Prime = 760-850; Prime = 660-759; Sub-Prime = 500-659.

Monday, January 19, 2009

Minimum payments - general concepts

The minimum monthly payment required by your credit card company almost universally includes all outstanding interest charges, fees, and penalties. In addition, a fraction of the principal loan balance is included in the minimum payment. The amount of principal re-payment required differs from one credit card company to the next.

Components of monthly payment:
  1. Interest - this includes all fees and penalties
  2. Principal
Ten years ago it was common practice that 5% of the balance be paid every month. As of 2009, however, the amount may be as little as 1%.

Five percent solution:

This top chart shows the rate of decline in the loan balance over time when 5% of the principle is included in the monthly payment, at a 12% annual rate of interest. On an initial loan of $1000.00 the balance is paid down to less than $200 in about 28 months, and the total interest paid for the loan is about $165.00.

One percent solution:

The bottom chart shows the rate of decline in the loan balance over time when only 1% of the principle is included in the monthly payment, at a 12% annual rate of interest. On the same $1000.00 loan, it takes nearly 81 months for the balance to be paid down below $200. At that point in time the cardholder has paid nearly $400 in interest.

See also: Credit card minimum payments

Thursday, January 15, 2009

First debt collection letter - Example 1

444 Highway 96 East, P.O. Box 64887
St. Paul, MN 55164-0887
Phone: 1-866-903-1001

December 30, 2008


Washington Mutual
Balance as of December 30, 2008: $7,605.86
Account No: xxxxxxxx-xxx-xxx-xxx
File Number: xxxxxxxxxxxxxxxx

Dear _______________:

Your account is past due and has been referred by Washington Mutual to our agency for collection. The balance shown above is the amount due as of the date of this letter. This amount may change due to interest or other charges that may be added to the account after the date of this letter.

This is a serious matter! If you respond, you may be able to avoid any further contact from us.

Call us at 1-866-903-1001 if you wish to pay this account, but need to make payment arrangements. We want to give you the opportunity to resolve this debt.

Make your check or money order payable to Washington Mutual and send it to:

Washington Mutual Payment Processing
PO Box 660548
Dallas, TX 75266-0548

We are a debt collector attempting to collect a debt and any information obtained will be used for that purpose.




Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice this office will provide you with the name and address of the original creditor, if different from the current creditor.

Telephone calls to or from our General Office are randomly monitored by supervisory personnel for business reasons not directly related to your account. Calls may be recorded for quality assurance.