Watch Out For New Credit Card Fees

How many times have you gone to a retail store, usually small, or a gas station, and when you were going to use your credit or debit card, they charged you an additional fee?  ARCO gas stations are famous for their 35¢ charge for using a debit card. Those fees are completely legal.  But, charging to use your card as a credit card, those charges that merchants sometimes hit you with, has been illegal -- until now.  In January, merchants can now charge fees or surcharges when you purchase something from them with a credit card.

In the summer of 2012, the major credit card companies finally settled a lawsuit to the tune of $7.2 Billion dollars, yes, with a "B" for not playing fair on their credit card charges with all merchants.  However, part of the fine print of the settlement now allows merchants to pass on that surcharge to us, the consumers.  It may be in the form of a percentage of the sale, something like 1.5% - 3% or a set amount of some small amount similar to ARCO's 35¢ fee or Carl's Jr.'s fee of 75¢ to $1.50 per debit card transaction. The bad thing is, these fees start out small, mostly like nuisance fees, but over time, since its now legal to charge them on credit card purchases, I don't doubt we will see merchants slowly raise them up, up, up.

Many of the larger merchants, like WalMart, have publicly stated that they are not going to pass that surcharge on to the consumer.  But, there's no doubt that there will be many of the smaller local merchants all over the country imposing it on their clientele.  I have no doubt because though it has been illegal for years, there are some small stores and gas stations that I go to that have always charged the fee whether it is debit or credit.  Me and my big mouth, I always tell them that its illegal to charge it when I'm using credit.  Its a violation of their merchant agreement with the credit card issuers, and it is a violation of law in my state.

Most states are going to allow this surcharge to be passed on to the consumer but there are 10 states that have laws in place already and they are not changing those laws to accommodate merchants, even with this court approved settlement agreement.  The ten states that will still outlaw passing on the surcharge to consumers or charging consumers a "convenience" fee are:

• California
• Colorado
• Connecticut
• Florida
• Kansas
• Maine
• Massachusetts
• New York
• Oklahoma
• Texas 

 I'm in California. The law that makes this kind of activity illegal is California Civil Code 1748.1(a) and it says this:  

      "No retailer in any sales, service, or lease transaction with a 

       consumer may impose a surcharge on a cardholder who elects 

       to use a credit card in lieu of payment by cash, check, or 

       similar means.  A retailer may, however, offer discounts for 

       the purpose of inducing payment by cash, check or other 

       means not involving the use of a credit card, provided that 

       the discount is offered to all prospective buyers."

So, if you're in one of the above states, look for this law in your state's civil code.  If you are charged that fee illegally, and you want to do something about it, you can contact your state Attorney General or you actually have the right to sue for actual damages x 3 plus attorney and litigation fees.  Most people won't want to sue over such a small amount, I imagine, but contacting the state Attorney General, oh, and you can contact your credit card company and dispute it and complain to them as well, and that merchant will get in trouble.  They will get a warning at first, but repeat offenders may actually lose their privilege of accepting plastic payments, which will probably negatively affect their business.

You can also fight back by not using credit in those retail locations that legally or illegally charge that fee and going somewhere that allows you to purchase something without penalizing you for paying with  your credit card.  I use my debit card as a credit card but I've stopped using the major credit cards for a number of years now.  They just make too much money for nothing.  They illegally issue credit (when they are banks, its against the law for banks to lend credit) and they violate the Truth in Lending Act (TILA), Regulation Z, and further, they just create the money out of thin air, monetize your signature on your credit application and sell it, without ever giving you or crediting you the money they made off of it.  Then, they charge you to use your own money (yes, they didn't lend you a dime, and they made money before you even got the "credit" by selling YOUR signature), and then add interest charges, late charges, over the limit charges, fees for making your monthly payment, and if you're late, they put a strike against your credit.

 So, this is just a heads up on some new expenses you will probably start incurring this year, thanks to the greed of the credit card companies.  They are the ones that charge merchants and they pass it on to you so that their businesses don't suffer. Big banks and credit card companies, always finding ways to stick it to the little people and get richer and richer. Please don't take my opinion on being rich wrong. I thoroughly believe people should work hard to make as much money as they want and they should be able to keep it or spend it however they choose.  I just have a major problem with the way banks and credit cards make their money and am against bailouts for them when they don't need them, the consumers do. The consumers are the ones footing the bailout bill in the end also.  Besides, they have the ability to create "money" out of thin air, pretty much whenever they want, so I just have no pity for them at all.

If you're not going to be feeling these surcharges and fees because your credit cards are in collections or charged off and you can't pay them, read some of my other posts about disputing those collection accounts and collection agencies. You can repair your credit. You can restore it to where it was before so that you can get credit again.  You may think that you actually owe these credit card debts and somehow have to find a way to pay them. Please look through my blog and read the posts that will help you.  

As always, if you have questions or comments to make, feel free to hit the comment button below. If you need help with your credit, you can email or call me anytime.  That contact information is a the top right side of this page. I would love to be able to help in any way I can.

Removing 3rd Party Collections From Your Credit Report

The most common negative credit that I see on credit reports are "collection" accounts.  If you have them, you are part of the majority.  There are a number of reasons to get them off of your credit. First, they're bad.  Who wants bad stuff on their credit report?  But here's a few other reasons: 

• They lower your FICO score
• If you pay them, they are still bad
• If you don't pay them and try to get a mortgage, you will have to pay them
• If you refinance your house, escrow will take part of the money and pay them
• Your interest rates on new credit, auto loans, house loans, refi's, etc. will be higher
• And the most important one in my opinion -- YOU DON"T OWE THEM ANYTHING!!

One of the problems with collections is if they can't collect from you, they leave bad and negative information on your credit report, but then they sell it to another collection company and the harassment and negative reporting on your credit report starts again.  They ding your credit with non-permissible pull inquiries, then they go and claim you have an outstanding debt with them and drop your FICO score some more.  Some will even sue you.  You need to get them OFF!

It starts with Validation.  If and when you receive a letter from a collection agency, you need to respond right away.  Write a letter to them, preferably within 30 days, disputing the alleged debt.  Tell them you are not asking them to Verify (as in name, address, etc.) being correct. You are challenging the validity of the alleged debt and they need to send proof that you owe them.  Send your letter to them certified mail with return receipt.  It costs you about $5 - $6 bucks but its worth it.

If you did not receive a letter from the collection agency and you found out about it because you saw it on your credit report, when you write the letter, tell them that you have received a recent copy of your credit report and were stunned to find out that they have put false information on it.  Then you follow through with demanding validation and that you're not requesting verification.  The credit report should have their contact information on it - mailing address, not phone number.  You NEVER want to talk to them on the phone.  They are trained to intimidate, pressure you, get money out of you, get you to admit something, any and everything they can, and intend to and usually do, control the conversation.  You do NOT want this scenario.  Stay off the phone and keep all communications in writing.

After you get the green card back from your certified letter, now you can dispute with the credit bureaus.  Collectors are not allowed to verify with credit bureaus until they provide validation.  Remember, validation means proof, real proof that you owe them.  Proof is not some bill or computer generated statement with your name and their account number on it.  Proof is an actual contract between you and them, that you actually signed and they actually signed.  It is documentation of monies given to you with an accounting of every cent used, every cent paid, every bit of interest applied, and the date any of those events occurred.  

They may claim you had an original account with some other party and they have been assigned the right to collect it.  They need proof of everything about that as well. They need the original contract between you and the original creditor with your true signature and a qualified employee of that original creditor, they need the full accounting, they need to provide proof of the assignment or the purchase they made from the original creditor.  

I really need to make a comment here about original creditor information requested from a 3rd party collector.  I mainly ask for it just to force them to do some work.  Personally, I don't give a rip if they can provide it or not.  If not, they go away a bit faster, but since they are not on the original contract you allegedly signed with the original creditor, they have nothing and you owe nothing.  3rd party collectors are NOT ON ORIGINAL CREDITOR CONTRACTS!  Therefore, you OWE THEM NOTHING, NADA, ZERO, ZIP, ZILCH!

Remember this and quote this when they try to claim they have rights to collect:
The right of subrogation does not exist for a stranger to the transaction.  73 AmJur 2nd, Section 90.  

Now I will explain this in common, easy to understand language. "Subrogation" means to substitute. "Does not exist" means is not allowed. "Stranger to the transaction" means someone or some entity not on the original contract.  So, here we go again in easy to understand wording:
There is no right to substitute someone or some entity that was not on an original contract. It is not allowed. 
 Now, this includes attempts to collect based on assignment, sale/purchase, or trade.  See?  The collector cannot substitute himself to collect money because he believes he was assigned the task or he purchased the bad debt, or traded some bad debt for a different bad debt.

Now, in order to get the bad or negative credit off your credit report, you have to dispute with the bureaus.  I generally don't recommend saying "its not mine" because you want to save that one for a last resort and if you do, they'll usually put fraud alerts on and want you to provide some identity theft stuff to them.  However, you can say it in a way that gets the same message across.  You can say, "I have never done business with this company and I have no idea who this company is."  You can almost always find plenty of other errors in the way they report as well.  They usually say you have late payments or your date of last activity was prior to the account being open.  An account has to be open before you can be late on it -- common sense there! Challenge dates, challenge amounts, challenge the account number, but only challenge 1 error at a time.  If you keep challenging the same thing or things with every dispute, they will send you the dreaded "frivolous" letter and refuse to re-investigate. 

If the collection company obeys the law, they will not verify with the credit bureaus because they haven't provided validation.  That is the best possible scenario.  It happens many times.  But, there are also many times that they just ignore the law and verify again.  You will need to send follow up letters to the collectors and follow up letters (repeated disputes) to the bureaus if they don't come off right away.  Don't expect them to come right off, right away because they are all scum.  Expect to fight. Expect to have to wear them down. But, be pleasantly surprised and proud of yourself for fighting back when they do come off.  Its a wonderful feeling and a beautiful sight!

If there is more information you need me to delve into on this subject, please leave me a comment below.  I will get it and I will respond.  I may even write a whole new post addressing your questions or different situations you need help with.  If someone posts a comment and you have a similar question, please add your comment too.  I want to be able to help as many people as I can.

If you are tired of dealing with these liars, thieves, scum sucking, extortionists called 3rd party collectors and debt buyers and are tired of the back and forth fight you have to stay on top of, I would love to assist you in the fight.  My partner and I have been at this successfully for 50 years combined.   I love the fight and am passionate about helping others get rid of the bad credit that is holding them back.  I get tons of emails about how my assistance has helped people get jobs, buy homes, cars, and start over.  I would love the opportunity to help you too!

If you have found this blog helpful to you, please consider donating as a sign of your appreciation for information I have freely given to you.  The "Donate" button is on the right side bar.  Thank you for your generosity.

Challenging Chaudhry v. Gallerizzo From A Collection Agency

If you have been working on repairing your credit and you have sent validation letters to collection agencies, you probably have received or will receive a semi-form letter back saying that they have verified the account and they are correct.  Then they will put in a little modified excerpt from the Chaudrhy v. Gallerizzo case decision to justify their laziness and to deceive you into just accepting their false claim against you.  The modified excerpt looks like this:

"verification of a debt involves nothing more than the debt collector confirming in writing that the debt being demanded is what the creditor is claiming is owed. The debt collector is not required to keep or provide detailed evidence of the alleged debt."

When I see this in a response for one of my clients, I crack up because it just blares out to me that they don't have anything.  You see, the Chaudrhy decision is not about validation with a collection agency!!  They take a small piece of the decision and quote it, but they fail to tell you that it has nothing to do with them, has nothing to do with validation, and further, you didn't request "verification", you requested "Validation" and that is something different.  

Just so you know, the Chaudrhy decision was about legal fees.  The verification of the legal fees was being challenged and the court said that the law firm just had to confirm in writing that the fees they were claiming were the fees that were owed.  Legal fees are not collections, unless it has been assigned or sold to a collector.  Legal fees are fees that the attorney charges for services rendered.  Since when do collectors render services that you "hired" them to perform for you?  I'll answer that for you --> NEVER!!

The best way to challenge this type of letter is to send a follow up letter letting them know that you are not an uninformed idiot and that their feeble attempt at validation doesn't even come close to the legal requirements set forth in the FDCPA and appropriate case law.  I usually use some of that language in my response letters and then I follow up with laws to defend my demand for validation and what is required.  They are in the business of collecting and they are supposed to know the law, yet they are usually fairly ignorant, deceptive to consumers and flagrantly in violation of the law.

Here is a sample of what I put in my letters that you can modify and use against these obnoxious criminals. (Yes, I consider them criminals because they consistently break the law and commit extortion, mail fraud, violation of the RICO Act (racketeering, etc.), and violating both the FDCPA  and FCRA, among other illegal acts.)

 Dear Sirs, (you can put in the name that they may put on their letter or say To Whom it May Concern, what ever is your fancy)

I am in receipt of your letter dated 01/01/13 in which you claim you have verified the account which I am disputing and in which you attempt to quote a portion of the Chaudrhy case decision to justify your response or to attempt to deceive me, or both.  Please understand, your feeble attempt at validation is a joke.  In fact, you claim you verified when I didn't request verification, as we both know that verification is merely requesting that you have the right name, address, account number and original creditor.  Further, your verification doesn't meet the criteria as defined in Black's Law Dictionary which includes being able to testify to the verification under oath.  I Demanded Validation, which you did not provide.

Since  you are supposedly professional collectors, you should be aware that if you fail to validate, you are barred from "verifying" with the bureaus as that is collection activity, which is barred until full validation has been accomplished.  The Chaudrhy case is not about debt collectors and validation, it is about attorneys' fees.  Maybe your incompetence and laziness has prevented you from actually reading the entire case and the entire court decision.

I am requesting from you AGAIN, Validation.  Here is what I want from you:  The alleged contract with both my wet ink signature and your employee's signature establishing that we have agreed to do business together.  Provide proof that at least the four main elements of a contract have been met.  Provide me with the alleged contract between the alleged original creditor and me, and proof that at least the four main elements of a contract have been met.  Provide me with proof that you have the legal right to collect this alleged debt.  Provide a full accounting for the alleged account - all charges, payments, interest accrued, all fees, and the corresponding dates for which every event occurred.  (Spears v. Brennan).  Prove also that this alleged debt is not time barred, or in simpler terms for feeble minds, outside of my state's statute of limitations.

Please be aware that because you put on the bottom of your letter that it was an attempt to collect a debt, you are already in violation of the FDCPA, and until you validate, you are guilty of mail fraud, racketeering, extortion, and a slew of other felony violations of the law.  So, until you fully and legally validate as I have requested, or rather, have demanded from you, you are required by law to cease all collection activity.  Should you fail to validate within ____ days, you are to delete any and all references and reportings of this fraudulent and alleged debt from every credit bureau and or repository to which you have reported it to and you are banned from ever selling or assigning this alleged debt to another collector, as that would be another violation of law by conspiring to harass and extort again, along with other violations of law.

I then go on to quote some samples of collection activity, give them a certain number of days in which to comply with my demand for validation and usually put in a limited cease and desist.  Sometimes I add some more case law to back up my requirements for validation.  I also usually put in there that I am not requesting verification but am demanding validation pursuant to the FDCPA 15 USC 1692g Sec. 809 (b).  Then I end it with a Sincerely, and my client's name.

So, don't be afraid to send another letter challenging their arrogance and deception.  You don't have to be sweet and nice, because, when are they?  And why would you be nice to law breakers?  I don't care if the original debt was actually yours. It doesn't matter anymore.  You don't owe it to the original creditor anymore because they charged it off and got tax credits, got reimbursed from the insurance that they had on it, and they made profit by selling it.  They made money 3 times just in those ways, but they also made money from every dime you paid on it since it was created out of thin air and they never actually lent any real money to you in the first place.

So, fight, fight, fight, and challenge, dispute and challenge some more.  Its your legal right and like I always say,  "just like when you're a defendant in court, the burden of proof is not on you, it is on them."  Make them prove it.  Oh, one last thing.  They can't legally prove it!  If you want to know why, read some of my other posts regarding AmJur and "Subrogation."  You will be pleased with what you learn!

If you have any questions or comments, please hit the comment button below. (I love questions and comments).   I will respond to you.  If you have questions that you don't want to post on here, you can email me.  The link to that is up at the top right of this blog!

If you have found this blog helpful to you, please consider donating as a sign of your appreciation for information I have freely given to you.  The "Donate" button is on the right side bar.  Thank you for your generosity.

Credit Bureau Things That Make You Say Hmmm!

Today I just want to ramble a bit about some thoughts that have been swirling around in my mind.  I was laying in bed this morning and, [since I actively help a lot of people by writing letters to help them fix their credit], credit repair, collectors, creditors and credit bureaus are on my mind often.  So, as I lay there in bed, I was thinking about one of my clients who Experian has been obnoxiously in violation of the law on.  They keep refusing to send him his report.  This made me spin into a deeper train of thought.

Sometimes I think I can be like a little kid that always has to question everything. Why?  Why this or why that?  The credit bureaus are like the parents with the annoying answer - "Because I said so".  My "why" thought was this:  Credit bureaus are not government agencies, no, they are privately owned and publicly traded companies.  Your social security number is only supposed to be given to state Departments of Motor Vehicles (don't get me started on that one!), tax authorities (yeah, don't get me started on that one either), welfare offices and other governmental agencies.  So, why do they get to have access to my personal, private, sensitive, protected information? 

Did you know that Social Security Numbers are only supposed to be issued to Federal Employees for use only in performance of official duties, they are owned by the federal government and is only "yours" while you are a public officer on official business?  Here are some facts from the IRS:  

1. Social Security Numbers can only be issued to federal "employees" for use only in the performance of their official duties. See 20 CFR §422.104.

2. The Social Security Number is the property of the government and not you. Therefore, it can't be "yours" unless you are a public officer on official business. See 20 CFR §422.103[ d].

3. The SSN is issued to the federal "public officer" and not to the man, and then only while he is an agent of the federal government.

4. Anyone who uses a Social Security Number who is NOT a federal employee acting on official commercial, government business is guilty of impersonating a federal "employee", which is a crime. See 18 U.S.C. §912.

5. You can only use it in connection with a "public purpose", and not a private purpose. It is illegal and a crime to use or abuse the SSN for a private or personal use. This is called embezzlement or conversion, and it is a criminal violation of 18 U.S.C. §641 and 18 U.S.C. §654.

6. Everything connected to the SSN becomes "public property" because the SSN can only be used in connection with a "public office" or federal employment.

7. The private man was never issued an SSN if he is not acting as a federal "employee". Therefore, he can honestly answer "NO" in response to the question of whether he was ever issued an SSN if he is not acting as a federal "employee" or agent.

Did you read numbers 4 and 5? Oh, heck, did you read them all?  So WHY do the credit bureaus get to have that information and WHY are we forced to use this number illegally to live our daily lives?  I mean, you can't easily open a bank account without one. You can't apply for and receive credit without one. They sometimes want to know it when you write a check. You can't turn on utilities without one unless you pay big security deposits, uh and same for cable companies.  WHY????

Okay, here's another "why" I've been mulling over in my head.  Have you ever noticed that consumer laws (FCRA) and even the bureaus themselves claim this is "YOUR" credit report?  It doesn't belong to them, it belongs to you.  So, WHY do they get to allow Whatever on YOUR credit report?  If it is "MY" credit report, I think they should have to get "MY" approval for anything a credit furnisher wants to put on "MY" report.  "I" should get to say, "Yeah, go ahead and put that on there" and "Nope, no way, I'm not authorizing that or allowing you to put that on my report".  Its "MY" stinking report!!  I should get to say yes or no!

I know that the reports are supposed to aid lenders and creditors in their decision of whether or not to extend credit to an applicant. But, there are so many errors on them and so many entities (think 3rd party collectors) that have no business reporting and fouling up one's credit report, that sometimes they do more bad than good.  Just think, if we didn't have to worry about credit reports anymore, wouldn't identity theft be extremely reduced?  Of course, the downside of that for me is that I wouldn't have any more credit repair clients....hmmmm.

Sometimes I wish I was rich.  Not like the morons running the country call rich - $250k/yr, nah, that's not hard to be that "rich". At least like Oprah or Bill Gates rich.  Then again, no, I want to be more sick rich. Insanely, disgustingly, absurdly, morbidly, vomitably (is that a word?) rich like the Rothchilds or the Vatican, or the British Crown - yeah, that rich!!  Here's a why for you.  Why? Because then I would have more than enough money to just sue the collectors and sue the bureaus and sue the banks that create fraudulent loans and credit for all of my clients. That way, when I write letters and they blatantly ignore the laws they are supposed to adhere to and comply with, I can just drag 'em into court and be done with them!

Well, that's is my rant for today.   Thanks for reading it. I hope you enjoyed it, I hope you learned something, and I hope it makes you think in ways you maybe haven't thought before.  

Feel free to leave comments below. And please, if you have questions about credit repair, leave a comment and I will try to write a post just for you to answer your questions.  I like doing that. It inspires me when I can help others.