Problems with Credit Corp - Evil Numbers

Luserindebt on 13/06/2018 - 19:19
Last edited 13/06/2018 - 19:24

Hi all, this is a new account but I have been with the OzBargain community for years. Just want to remain anonymous if I get into trouble with them that’s all.

I had a credit card debt of $30,000 with Commonwealth Bank (salary was around $60,000). I couldn’t pay for the debt and it has been sold to Credit Corp since 2015 (For a few years I was unemployed and I suffer from depression). I found employment since then and have been working continuously. Since 2017 I have been working for myself and made 35,000 that year with $13,000 expenses (raw = $22,000).

Summary

1) I am with Credit Corp - no longer with the Commonwealth Bank Visa Card
2) The Commonwealth Bank sold my account as little as 20 cents per dollar to Credit Corp, so they could have bought the account for $6,000
3) At Credit Corp, the “opening balance” was $30,000 since 2015
4) Now still “owing” $28,000 after paying $13,000 over 3 years
5) When I asked for a settlement they were asking for $21,000 which made the total payout $34,000 which was 600% gain considered some could get away with $15,000 or $20,000
6) Even if I paid off at Credit Corp, it still showing money owing at Commonwealth, so there is no incentive to pay dollar-for-dollar (unless Credit Corp pays back Commonwealth Bank and clears my name)
7) Checked my credit file and it is still clean

I found help from Salvation Army Moneycare on December 2017 and they requested a statement from Credit Corp and it was the first time I knew they were charging 12% interest rate, and along the last few months, they reduced the interest rates to 6%, which both were not communicated nor agreed on. Should I knew I was doing this badly, I would use any external help including borrowing from others to settle the debt.

Recently I approached them again with the help of Salvation Army and ask for a final settlement. They were asking for $21,000!

I want to know if they have any misconduct and can I make any complain on the evil numbers?

Appreciate any pointers from those who know the industry

1) They never told me the interest rates
2) They never sent me any statements over the last 3 years and if I knew I was doing this badly, I would use any method include borrowing money from others (still a very large number I didn’t think I could borrow) to settle the debt
3) If they misconduct or having ethical issues where I need it most
4) Any government/non-profit arbitration/ombudsman as I genuinely believe they have been taking advantage of me where I need the most help
5) Will they pay back Commonwealth Bank and clears my name within the bank? (My external credit file is still clean)

Appreciate any tips or pointers, as I really need those comments to reduce the damage done. Thank you.

Financial Evil

Related Stores

creditcorp.com.au
creditcorp.com.au

Comments

  • Zedsdeadbabyzedsdead on 13/06/2018 - 19:24
    +3

    Debt collectors go straight to hell.

    • HighAndDry on 14/06/2018 - 11:35

      And yet in this case, OP comes off as the scummier one. It's almost impressive.

    • [Deactivated] on 14/06/2018 - 14:03

      Care to elaborate? IMO they do a public good. They're willing to get their hands dirty to make people accountable for their actions.
      Don't like them? Don't be irresponsible with money.

  • subywagon on 13/06/2018 - 19:35
    +3

    It's strange that your credit records are clean. You should have a default there for the Commonwealth. Are you sure you are paying the debt collector and not being scammed?

    If you are actually paying the correct debt collector, are you able to get a lump sum together of say $5000? If so tell them you are willing to pay $5000 to close the account out or otherwise you will no longer be able to afford to pay it as you are going broke, take it or leave it. My brother had a fair bit of debt and this technique worked for him. Once they were payed out he was still able to get a mortgage. Might be a bit more difficult these days though.

    • userindebt on 13/06/2018 - 19:43
      -1

      I almost never missed any payments so I am a good customer in their eyes. Am thinking a lump sum of $10,000 (I still need to borrow but that is more manageable) but they were asking for $21,000 even with medical report of mental health issue. The lady at the Salvos was nice and helpful, but she said that was as far as she could help.

      • HighAndDry on 14/06/2018 - 11:22
        +3

        What? No you're not.

        I couldn’t pay for the debt

        Debt collectors don't have 'good customers'. You're only there because you defaulted on your debt. And what makes you think you can just get out of repaying $20,000+ of your debt? I assume you actually DID take that money and use it.

      • HighAndDry on 14/06/2018 - 14:39

        Also:

        Am thinking a lump sum of $10,000 (I still need to borrow but that is more manageable)

        And then repay $3k of that $10k back in another 3 years? You could borrow that $3k too and only have to pay back $1k a further 3 years down the line!

  • Doggiie on 13/06/2018 - 19:45
    +12

    Don't call them evil when you owed someone the numbers in the first place - CommBank.

    Commbank didn't want to deal with you anymore, so sold your debt to someone else, claiming a loss. This is their problem, not your benefit.

    Credit Corp bought debt at a ridiculously low price, knowingly they can only recover 20-50% of their debt overall across the bundle of debt the purchased (which included yours).

    Credit Corp is giving you discounted interest rate already, to your own benefit. They only want to recover as much as they can - to make a win-win situation for you and for Credit Corp.

    It's fine to want to reduce your payable debt, that is totally possible, like you have already try. Just push a bit harder with your stance. But it is not okay to call them evil, when you borrowed money without the capacity to pay them back.

    Good luck however! And welcome back to the workforce!

      • Doggiie on 13/06/2018 - 21:02
        +9

        What's the figure you want to pay then? You can't just expect the debt collector to let you go because you had issues. They are being nice to you already compared to what you had with CommBank. Once again, CommBank accepted their loss in money, but this is not for your benefit.

        Their job is to consolidate bad debt, not to help debtors' financial positions. Time to stand up and do your best to stay up. Don't play the blame game, because frankly it started off with you using your credit. I don't want to say it's your fault because I know there are underlying reasons out of your control.

      • kingmw on 13/06/2018 - 22:23
        +2

        Commbank accepted the loss.
        Credit Corp took the risk to buy the debt (there's always a risk they won't get paid at all).
        The big banks bundle their losses together to be sold so Credit Corp would usually have to pay 5-6 figure sum to buy the bundle.
        You should have tried to negotiate with Credit Corp early on and set a repayment plan from the beginning.
        You will have a black mark with CBA and you will just have to wait until it expires. On the other hand, it makes it harder to obtain CREDIT only so should hopefully stop this situation from happening again in the near future.

        The interest charged is arbitrary and set by them but unsecured debt is always high (big banks 15-30%/year), 6% is as cheap as a home loan.
        Credit Corp wants you to keep paying them and not default so they are more than happy to negotiate. Not sure you will be able to clear the debt quickly but set up a reasonable repayment plan (that you can afford) to clear it over 2-3 years.

        • userindebt on 13/06/2018 - 22:57
          -4

          Thanks kingmw and Doggiie for the insight. I and hoping for a $10,000 settlement and will call them to explain the situation. Hopefully can come to a better outcome.

        • JimmyF on 13/06/2018 - 23:11

          @userindebt: Have you offered this amount then and what did they say?

        • userindebt on 14/06/2018 - 00:08

          @JimmyF: Yes I have but they came back with $21,000.

        • [Deactivated] on 14/06/2018 - 03:13
          +7

          @userindebt:

          Yeah, damn shame when you have to pay back what you owe.

          SO UNFAIR!

      • Tech5 on 13/06/2018 - 22:45
        +2

        Do you always blame others for problems of your own making?

      • HighAndDry on 14/06/2018 - 11:23
        +1

        It doesn't matter how much they paid. You owed $30,000.00 and were paying far more than the 6% or 12% interest you're now paying. Grow a sense of damned responsibility.

  • plmko on 13/06/2018 - 20:31
    +11

    Let me guess this straight

    • Lower than industry average credit card interest 12% and now 6% = evil
    • Bought out CBA debt and you strung them out for another 3 years = evil
    • Offered to bail you at a discount vs your actual debt = evil
    • Still continues to give you credit at no risk to your credit score = evil

    Wow, good luck, seems like you just refuse to face the music.

      • coco1458 on 13/06/2018 - 21:18
        +4

        Under your name at CBA, you will be referred to as a high risk applicant when applying for credit.
        So any future credit you apply for may be declined or you'll receive a ridiculously high interest rate because you have a history of not being able to pay it back.
        But good luck, hopefully you'll get this one sorted

      • HighAndDry on 14/06/2018 - 11:26
        +2

        You defaulted on your debt with CBA. There's no "clearing your records". You're a shit credit risk and that's that.

        And "dollar to dollar"? No, you owe $30,000 or whatever is remaining. You don't get to make demands here, you owe the money, you're not bankrupt, so you should pay.

  • kipps on 13/06/2018 - 21:22
    +10

    Your attitude represents a serious impediment to resolution. What they paid to acquire the debt is not relevant to their action against you. You have no proper understanding of the terms upon which the debt was sold. At the end of the day you sought, obtained, and used credit that you couldn’t afford to pay. The fault of that lies solely with you. I suggest you focus upon showing them why you are not good to pay the debt and seek their agreement for a full and final resolution to be paid by a third party to call it all quits. Alternatively you can do this the hard way. Ask them for proof of their claims, legal assignment, etc, and get on their hit list. They will then sue. It isn’t likely to go your way.

  • [Deactivated] on 13/06/2018 - 23:44

    I would suggest you see a financial counselor and get them to negotiate on your behalf, they will have the knowledge to help you get the best deal possible. (By financial counselor I mean someone through a not for profit such as anglicare.

    The moneysmart website is good place to start

    https://www.moneysmart.gov.au/managing-your-money/managing-d…

    • userindebt on 13/06/2018 - 23:59
      -1

      I saw a financial counselor at the Salvos I was hoping for a $10,000 settlement. She offered Credit Corp $7,000 but they came back with $21,000 which is way too high for my current situation.

      • HighAndDry on 14/06/2018 - 11:27
        +2

        Should've thought about that before you got into $30k CC debt on $60k annual income. Ask nicely for a payment plan, or keep slowly paying it off. Considering you would have been paying >20% interest on the credit card and are only paying 6% now, you're already getting off lightly.

  • garetz on 14/06/2018 - 03:24

    2) The Commonwealth Bank sold my account as little as 20 cents per dollar to Credit Corp, so they could have bought the account for $6,000

    how do you know this ? It could of been alot less than 20 cents on the dollar, most of the time its less than this, commonwealth bank just writes it off, even if you pay for this debt to the "credit corp" you will still have a default against your name, so clearing the debt doesnt benefit you at all.

    • userindebt on 14/06/2018 - 09:01
      -4

      Thanks for the neutral response. I am seeking for help but instead I receive a lot of judgements.

      I agree with you and do not understand how could these people asking for so much when you already paid them 200% of what they were worth (13,000 VS 6,000).

      • Baysew on 14/06/2018 - 09:32
        +3

        but instead I receive a lot of judgements

        Funny you should say that.

      • HighAndDry on 14/06/2018 - 11:30
        +1

        You're getting judged for being unwilling to take responsibility for yourself. You're not a kid (because you could get a credit card), so stop acting like one.

        It doesn't matter how much Credit Corp paid for your debt. You owed $30k. Are you disputing that?

        Flip it around - Say someone deliberately trashed something you got as a Christmas present. Do they get to argue because you got it for free, they don't need to repay you anything?

      • Tech5 on 14/06/2018 - 13:21

        Ever heard of interest? That's how it works

        • HighAndDry on 14/06/2018 - 13:27

          Not even that. OP is arguing that because the debt collector bought his debt for cheap, that he gets to basically write off $20k of his own debt. In what world is he living?

    • HighAndDry on 14/06/2018 - 11:28

      It also doesn't matter. OP owed $30,000 - CBA could've GIFTED that account to someone else and OP would still owe $30k.

      • idonotknowwhy on 15/06/2018 - 13:54

        I wish they'd gift an account like that to me :)

        Actually I don't, trying to get anything our of the debtor would be really tiring.

  • HighAndDry on 14/06/2018 - 11:35
    +2

    1) They never told me the interest rates

    Would you rather pay the credit card rates of interest? Usually around 24%.

    2) They never sent me any statements over the last 3 years and if I knew I was doing this badly, I would use any method include borrowing money from others (still a very large number I didn’t think I could borrow) to settle the debt

    Ha. It's your responsibility to keep track of how much you owe. Or to ask for a statement. Did you ask at any time? (Also, you seemed to have learnt nothing. No, don't borrow from others to repay this.)

    3) If they misconduct or having ethical issues where I need it most

    Hilarious. You're the one defaulting on your debt and you're worried about the ethics of others? What about the ethics of "repaying what you owe"?

    4) Any government/non-profit arbitration/ombudsman as I genuinely believe they have been taking advantage of me where I need the most help

    You're an adult. Act like one. No one forced you to borrow $30k on your credit card.

    5) Will they pay back Commonwealth Bank and clears my name within the bank? (My external credit file is still clean)

    Your record reflects the fact that you don't repay your debts and are a bad credit risk. That's based on facts. It doesn't get cleaned just because you want it to.

    • idonotknowwhy on 15/06/2018 - 13:56

      Overall I agree with your points but:

      Usually around 24%.

      wtf? I've never seen such a hight interest rate. The most I've seen is 20% and that's with epic point-earning and a low annual fell.

  • MeesusEff on 14/06/2018 - 12:58
    +1

    Interest is usually around 20%+ for debt, so the $13,000 you paid off during 3 years doesnt cover the interest they usually charge. It doesn't matter what amount they paid CBA to purchase the debt is as that is CBA's loss, they are still a business at the end of the day. The 6% interest that they are charging you is actually more than reasonable. Expecting them to accept $10k on a $30k debt is worse than a lowball offer on Gumtree. In my experience with debt collecting agencies, if its a big debt, you can squeeze 40-50% off but you have to be able to pay immediately over the phone. Lower debts, maybe around the 10-20% mark. You would need to get your finances ready first before you can negotiate a better outcome.

    • HighAndDry on 14/06/2018 - 14:38
      +3

      It doesn't matter what amount they paid CBA to purchase the debt is as that is CBA's loss

      Exactly right.

      Can you imagine the chaos if everyone knew you could rack up $30k in CC debt, cry poor, wait 3 years, and only have to pay $6k or $10k back with no consequences like OP wants? I'd start investing in CC debt instead of index funds.

  • HighAndDry on 14/06/2018 - 13:00
    +2

    Appreciate any tips or pointers, as I really need those comments to reduce the damage done. Thank you.

    The damage is fully self-inflicted, and worse, caused harm to someone else (CBA - and their customers and shareholders). You managed to make me feel sympathy for a big bank and a debt collector. Think about that for a second.

  • idonotknowwhy on 15/06/2018 - 13:57

    You should have put that 30k into bitcoin instead. You'd be able to buy a small bank by now.

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