What Should I Do?

[nodollarsnomo]

In the last week I have been getting calls from a local CA. They are trying to collect on an outstanding invoice dating back to 2007. This is from a company that we purchased some products from on two occasions.

We did not have a credit account set up with this company so my husband provided them our business debit card number. They debited the account for the first purchase, several months later my husband placed another order and gave them the card number again. Now they are saying they were never paid and have turned it over to a collection agency when I talked to them yesterday I told them that we did not have an account with this company and payment was made before shipment and asked for a copy of the invoice. When I received the fax the invoice had been stamped NFS. Our business account has never been overdrawn. I told the lady at the CA that I would have to research this and get back to her since we used our debit card alot it could take awhile. I talked to her yesterday and she is already calling again today.

They say they are ready to take us to court if we do not take care of this. It is for a little over 1000 but since our business is tanking we just don't have it. Any thoughts on how to handle this?

[StartingOver08]

First I would stop talking to the CA. You should receive a dunning letter in the mail any day now as they are required to send you one within 5 days of first contact. IF you do not receive it, then the CA has its first violation.

With that letter, you need to send a DV to obtain PROOF that there was an actual NSF. This one event (sending the DV letter) can buy you a min of 30 days and in many instances much, much longer. You can search other parts of the forum to find out what to say in a DV letter.

You are in the best position to judge whether there was an NSF because you would have received communication from your bank at the time of the incident. If you never had a return check with the bank on your business account, then the CA does not have a leg to stand on for collections.

In any event, I would add the OC and the CA to the BK for this debt - whether it exists or not, just to cover yourself in the BK.

[BigJohn]

You should actually audit your bank statements. The statements should tell you if you paid it or. I had a similar case. I paid with American Express. The creditor claimed I got declined. I was able to produce the statement from American Express that said it got paid.

[nodollarsnomo]

Big John, I was looking at a copy of the invoice the the CA faxed over, and our terms were prepay. From what I can tell whoever took the order failed to run the debit through and stamped it as NSF. Now two years later they are trying to collect. They did not get paid but the account was never overdrawn. Do you think we have a leg to stand on? Can they still try to collect on this?

[HHM]

Nod...you MUST audit your bank statements.

What do your bank statements say? The bank may have simply denied the charge. You need to go through your bank statements and see if payment was ever sent. If it wasn't, you are basically screwed.

[BigJohn]

Big John, I was looking at a copy of the invoice the the CA faxed over, and our terms were prepay. From what I can tell whoever took the order failed to run the debit through and stamped it as NSF. Now two years later they are trying to collect. They did not get paid but the account was never overdrawn. Do you think we have a leg to stand on? Can they still try to collect on this?

The invoice sayd the terms were prepay? There is a small possibility that they have terrible records.

You say it was a debit card but is it one that can be used as a credit card?

I know if I sell to someone and then run the credit card afterwards without approval, according to my merchant agreement I am screwed if funds are not available. If it is purely a debit card, I don't really know if that is handled the same way.

[nodollarsnomo]

Yes, the card can be used either way. I checked and the money never came out but this is my husbands business acct. and it always has at least $5,000.00 or more in it and it has never been below that amount. This purchase was for $1,000.00 so I know there was money in there to cover it. I would have also thought that if it came back as NSF they would have never shipped the items since the terms were prepay. They never contacted us to say the debit did not go thru. Now they have turned it over to a CA.

[BigJohn]

I would ask them for a copy of their Merchnt's Agreement and also let them know (CC) that a copy of the letter is going to Visa (I assume this was a visa stamped card). My understanding is that if a merchant does not run a charge at the timne of purchase, the merchant, in a worst case scenario, might be out of luck if funds are not available later.

We used to go to shows and sell and we like everybody else, we got caught a few times by running a charge after the sell. But when we bought a cell phone that could be hooked to a credit card machine, such loses came to a stop.

[HHM]

Big picture, none of this really matters because it does not serve as a defense to the underlying debt. If you ordered goods, and goods were shipped, but never paid for (either intentionally or accidentally) you still owe the money.

Now, these issues could serve as an equitable defense against any interest, penalties, late fees, collection fees, and attorney fees; but you would still be responsible for the purchase price of the good or service.