John Oliver made a huge splash this week when, to prove a point on his show, he purchased $15 million worth of medical debt for $60,000… and then promptly forgave it all. A lot of that debt was “zombie debt,” which, like its namesake, keeps coming back from the dead to bother people who would much rather be left alone and unbitten.
Sometimes debt isn’t so bad, and sometimes it is, but one thing is clear: 80% of Americans owe someone, somewhere, some money. It might be a mortgage or student loan, or a five-year-old fee that got forgotten about, but the vast majority of us have some outstanding debt. And worse: a third of the country may have debt collectors chasing after them for that cash.
For months, we’ve been telling you about KlearGear.com, the online retailer that was trying to collect a $3,500 fee from unsatisfied former customers over a negative review because of a “Non-Disparagement Clause” inserted into the site’s Terms of Sale after the customers made the purchase. The customers have been trying to fight the ridiculous anti-consumer fee (which shouldn’t apply to them anyway, as they never agreed to it at the time of purchase), and finally sued the company after having their credit tainted by a bogus debt. Now a federal court has sided with the couple and tossed out the $3,500 fee. [More]
James’ roommate moved in, had Dish Network service for a while, and then moved out. The roommate canceled service before moving away. Or so he thought. Despite what James tells Dish and their collection agencies, then what his ex-roomie tells Dish and their collection agencies, they continue to come after him for the account that was never his in the first place. [More]
The home-buying process can be stressful enough without questionable debt from the past rearing its ugly head just as you’re applying for a mortgage. And if you deal with that debt right away, you don’t expect it to linger — and you certainly don’t expect the company you owed money to will suddenly lose all record of your account.
Way back in 2004, Cameron had DirecTV service. When he moved, he ended his service and turned his equipment back in. At least, he thought he did. It wasn’t until this year that he learned the account had gone zombie back in 2005, charging the debit card of a bank account he didn’t watch closely for two years before going dormant–likely because the debit card expired. The zombie account had been slain, and a collection agency tracked Cameron down earlier this year to make him pay the balance on the account that he had never reactivated in the first place. Never mind that he had paid almost two years’ worth of bills without noticing it or even having a dish at the time.
David, a Cablevision customer, recently moved outside of their service area. They were evidently sad that he left, because they just can’t let him go. Or figure out whether he owes them money or not. First he had a zero balance, then it was weeks overdue, then he had a small balance from his last month of service, then he received a letter from a collection agency. He called in to verify whether he needed to pay this bill or not, and learned that Cablevision isn’t able to send him a document stating that his balance is paid in full. Because they just can’t.
Why does Dish Network keep charging Amy’s boyfriend for his old account? It could be because he made a few payments on a deadbeat roommate’s account, and then that roommate never turned the equipment back in. But he did. It could be because the account was canceled before the contract was up, and it was his name on the contract. But it wasn’t. Dish just keeps making up reasons, and are determined to get his money one way or another.
Lindsay rented a DVD from Redbox, and kept it longer than planned. Except her card on file was closed, and they couldn’t charge the extra rental fees to it. Can they take her payment over the phone? No. They aren’t set up to handle this situation, and don’t particularly want her money.
A man in Chicago has filed a lawsuit against the company that serviced his car loan for allegedly ruining his marriage by revealing, via a voice mail, that another woman was making loan payments for him.
Tim has been stuck in a 7-month limbo with his ex-health insurer Kaiser Permanente that he is trying to break it off with. First he was told to write in a fax that said “I [name here] no longer want health care coverage by KP.” Then it turned out they gave him the wrong fax number, which he found out after he got a bill for missing payment. He called back and got the right fax number, was promised a refund and prorated payment, and sent in all his info. Instead, he got back a letter from the collections department.
A few months after Minnesota Senator Al Franken convinced the FTC to look into the practice of debt collectors having arrest warrants issued for people with less than $100 in debt, the former SNL star announced that he will be introducing legislation to put an end to some of the collection industry’s more abusive practices.
Joseph says Allstate is sticking him for more than $100 in unwarranted charges because he was so bold as to switch his policy over to a new car. He says none of his arguments have convinced the company to correct the charges and the bill has gone to collections.
Ed and his wife successfully filed a chargeback against Expedia for a canceled trip earlier this year. Now he’s being dunned by a collection agency for the amount that Amex refunded him.
Gyms are notorious for being difficult to cancel your membership at, so at first Heather thought hers was different. They even backdated the cancellation date so she wouldn’t pay for the full month. So nice! A month later, collections called her.
Ryan recently went to a clinic operated by Western Dental Centers, a franchise that operates in California, Arizona and Nevada, and now he regrets that decision. He writes that first he was forced to endure $800 worth of upsells while he was stuck in the chair, even though he was just going in for a cleaning. What happened with billing, though, was worse and may lead to lasting credit issues.