American Profit Recovery is a large, third-party debt collection agency. Originally founded in 2004 and according to their website they’ve collected over $309 million dollars, as of the publishing of this article.
They serve a wide variety of types of consumer debt accounts including: financial services, healthcare, retail, service providers, dental, credit cards, schools and universities, and many more. They have two corporate office locations in Marlborough, MA and Farmington Hills, MI.
The first item we need to share is the Fair Debt Collection Practices Act (FDCPA). This is federal legislation passed with the intention of protecting you, the consumer, from aggressive and unlawful debt collectors.
In short, it regulates the debt collection industry. It says what time of day they can contact you, how they can communicate, who they can discuss your debt with, and much more. The FDCPA is worth reviewing in detail, at your convenience.
It also says debt collectors are required to provide you with the modicum of respect and dignity, that every human being deserves. And in full disclosure, according to the American Profit Recovery (APR) official website, it sounds like they try to be diplomatic and respectful of folks.
Does Paying Off American Profit Recovery Collections Improve Credit Score?
The most common concern for folks is does paying off collections improve credit score? It makes sense, and seems logical. But no. The only thing that happens when you just pay off collections is a change in the status of the item on your credit reports.
It’ll be changed to a paid collection. This is still a negative item to have on your credit reports, and it will cause you to have a lower credit score. According to Anthony Sprauve, a spokesman for FICO, collections on your credit reports can potentially damage your credit score by as much as 100 points.
You see, the key to improve your credit score is to remove this collection item from your credit reports. And for some folks, after first performing the necessary due diligence that will be sharing in this article, they may discover the easiest, most efficient way to clean up credit report dings, is to pay collections.
Debt Collection Tactics
Now, typically your alleged account will be sent to collections after about six months of delinquency. This is when you’ll start receiving phone calls, demand letters, and they’ll report this collection on your credit reports.
In addition, they can legally inflate your total balance by charging you interest fees, and even collection fees. And in some cases, these can be significant fees. If they’re unable to collect payment, and you don’t address the issue, they have two options.
First, they can turn around and sell the rights to your account to yet another debt collector. This new debt collector will then begin calling you, sending letters, and they’ll report even more negative information on your credit reports. Or alternatively, they can sue you for payment.
Yes, debt collectors especially late-stage debt collectors frequently file civil lawsuits against consumers. The goal is to win a judgement, because then they’ve really got you by the short and curlies.
Depending on your state of residence a judgement can result in wage garnishment, liens being placed against you and or your property, and potentially even asset seizure. For full details, investigate your local legislation, because every state has unique laws.
By the way, according to the American Profit Recovery website they do say in some cases legal action can be used. The worst part is a judgement on credit report files will decimate your credit score, and virtually overnight.
Please, don’t just ignore American Profit Recovery or believe they’ll just disappear like a fart on a windy day. It’s much more likely this collection account will snowball into a much bigger problem both in the size of the debt, and the damage to your creditworthiness.
American Profit Recovery
33 Boston Post Road W Suite 140
Marlborough, MA 01752
Phone number: 1-800-711-0023
4 Tips To Deal With American Profit Recovery
1. Request Debt Validation
The very first step when dealing with debt collectors and American Profit Recovery is to request debt validation on your alleged collection account. This is your right as a consumer, granted by the FDCPA.
It’s best to make this request in writing and send it using certified mail, so you have evidence they received your validation request. You see, they’re required to respond by providing you with documents, evidence, and paperwork that proves this is, in fact, your debt and they own the collection rights to it.
If they fail to validate your debt, for any reason, then in compliance with the FDCPA you’re no longer legally responsible for payment. In other words, the debt is legally forgiven.
And this can be a result of them just misplacing the paperwork to validate your debt. Moreover, they’re supposed to contact all three of the credit bureaus to have them remove collections from credit report files, concerning this account.
2. Legal Time Limit
If they do validate your debt, our next step is to investigate the statute of limitations. This is a state law, and it does vary, so check out your local legislation for full details. The statute of limitations says precisely how long you’re legally responsible for repayment of a debt.
Generally, it’s about seven years from the first date of delinquency. Once this time window expires, then according to state law, the debt is legally forgiven. As in you’re no longer legally responsible for payment.
The statute of limitations applies to most types of consumer debts including charge offs, medical collections, retail, utilities, telecommunications, credit cards, and many more. The few exemptions are defaulted federal student loans, and federal income tax.
Warning. And this is big, debt collectors especially late-stage debt collectors are notorious for re-aging consumer accounts. For obvious purposes, so they can continue to attempt to collect payment despite your legal obligation expiring.
3. Negotiate a Settlement Agreement
Now, let’s talk about how to pay debt collectors and so it will help your credit score. It’s important to only enter into negotiation with a debt collector after your account has been validated and you’ve checked out the statute of limitations time-window.
Assuming everything is on the up and up, our next step is to negotiate a settlement agreement directly with American Profit Recovery. There’s two key parts to your settlement agreement, and it’s best to get this in writing.
First, we want to negotiate to settle the debt for less than the total balance. Often, you’ll be able to settle for just a fraction of the balance. You can anticipate somewhere in the ballpark of 15% up to 45% of your total balance.
For example, with a $1,000 debt, you may be able to settle and pay just 30% or $300. The exact amount will depend on a few factors, most notably how old the account is.
The second part of your agreement is mission critical, because at this point if we just pay off this collection we’re going to get stuck with that paid collection on your credit reports. As we shared earlier, this will cause you to have a bad credit rating, potentially damaging your credit score by as much as 100 points.
We must get American Profit Recovery to agree that in exchange for our payment, they’ll stop reporting our account information to all three of the credit bureaus. This will enable us to clean up credit report negatives in our fourth and final step.
We need to take a moment and dispel a mysteriously popular internet myth about a pay-for-delete approach for dealing with debt collectors. If you’re unfamiliar this is where you demand the debt collector first delete the negative item from your credit report, and then you’ll make payment.
It sounds wonderful. And you’re welcome to try it. However, we have better odds of seeing PETA opening a butcher shop than any debt collector ever agreeing to this, and for a variety of reasons.
It’s much more effective, pragmatic, and they will agree to stop reporting your account information to all three of the credit bureaus, in exchange for your payment. And with this agreement, we’ll be able to remove the negative mark from your credit reports.
4. How To Remove Collections From Credit Report
Our final step is looking at how to remove collections from credit report files. And to do this, we’re going to need to use more of your rights as a consumer, this time those granted by the Fair Credit Reporting Act (FCRA).
This federal legislation enables us to challenge and dispute any item on our credit reports, so long as we believe it’s incorrect, misleading, or made in error. And yes, we’re going to dispute this American Profit Recovery collection item.
There’s three ways to dispute credit report items: online, over the phone, and by mail. Once the credit bureaus get our dispute, they first get to deem it valid or frivolous. Which is another conversation for another time and place, so make sure to sign up for our free newsletter and join our congregation, for more credit restoration tips with Dan Willis.
Once the credit bureaus deem our dispute valid, they’re required to investigate the item. They’ll call it a re-investigation. Nevertheless, when they re-investigate they’ll contact American Profit Recovery and ask them to verify the account and the relevant details.
As per our settlement agreement directly with American Profit Recovery, they won’t verify our account when the credit bureaus investigate. This is the second part of our settlement agreement.
As a result, this means the credit bureaus must remove this collection item from our credit reports. You see, every single item on your credit report must be verifiable. This is how to clear credit report dings, blemishes, and legally remove negative marks.
Listen, it ain’t easy dealing with debt collectors. By default, this is an adversarial relationship, and even if American Profit Recovery does provide you with diplomacy and treat you with respect and dignity, their profits are directly tied to squeezing as much money as possible out of you.
Even if they do it with a smile on their face. The good news is every last alphabet soup law Congress has passed is on the books for you, the consumer. That said, many folks feel as if they’re living in biblical times and they’re David going into battle with Goliath.
When all is said and done, your credit score is a lot like your Grade Point Average (GPA) in glory school days past. It doesn’t matter if you’re acing all your courses, if you’re failing underwater basket weaving, because this negative mark is going to obliterate your overall GPA.
This same principle applies to your credit score. We must clean credit report dings, blemishes, and remove any negative marks in order to fix credit, and get the score you truly deserve.
We encourage our members to consider professional, legal, and legitimate credit repair companies to help. Because in 2016 alone, over 9 million negative items were removed from consumer’s credit reports.
One of the best firms is The Credit Pros. They’ve helped their client’s successfully remove collections, late payments, charge offs, judgements, liens, repossessions, and many more negative credit report items.
Get a free credit consultation with a certified FICO professional by calling toll-free 1-877-418-7596. And for more tips, techniques, and strategies about how to get your credit score up with Dan Willis, sign up for our free newsletter and join our congregation.
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