Finding a mysterious debt collection agency on your credit report is the financial equivalent of discovering that you’ve had an uninvited roommate secretly living in your home.
Alliant Capital Management, or Alliant Capital, is just such a mysterious housemate, and it has shown up on credit reports all over the nation without much explanation.
So who is Alliant Capital Management? That’s the first question you need to answer if you want to take back control of your financial life.
Alliant Capital Management, LLC, is a debt collection agency that was founded in 2013 and is based in Buffalo, New York. The company is a third-party debt collector that focuses on the collection of fintech loans, installment debt, and credit card debt on behalf of original creditors like Upstart, as well as debt buyer Velocity Investments, LLC.
Here’s the basic contact information for the company:
1965 Sheridan Drive, Suite 100, Buffalo, New York 14223 (mailing address)
2825 W Galveston Rd, Suite 7, Chandler, Arizona 85226 (secondary location)
877-957-8122 (main phone number)
855-546-9103 (secondary phone number)
customercare@alliantcapital.net (email address)
12-13 years in business (founded in 2013)
Getting Acquainted with Alliant Capital Management’s Reputation
When we see a disconnect between a company’s own description of its business practices and the way in which it actually interacts with its customers, that disconnect can reveal a lot about the truth of the situation.
Alliant Capital Management enjoys an A+ rating from the Better Business Bureau (BBB) but rates between one star and 1.6 stars on consumer review platforms like Trustpilot and Consumer Affairs.
The reason for this disconnect is simple: while consumer review platforms measure consumer satisfaction, BBB ratings are based on the company’s responsiveness to customer complaints.
The Consumer Financial Protection Bureau (CFPB) has received anywhere from 168 to 250 complaints about this debt collection agency in the past decade. The most common issues raised by the complaints to the CFPB included third-party disclosure, debt validation, and continued contact after a consumer has requested the communication cease. These issues suggest a pattern of behavior that is more than just a random anomaly.
In 2016, the Minnesota Department of Commerce fined Alliant Capital Management up to $50,000 for collecting debts in Minnesota without a collection agency license, failing to register collection agents, and using deceptive collection practices. A subsequent investigation by the BBB found similar licensing issues in seven other states, including Nebraska, North Carolina, and Tennessee.
Inside a Debt Collection Agency: High Turnover
High turnover rates mean that a debt collection agency’s employees are constantly cycling through its positions. There is very little job security in this industry, and employees don’t stay for long. In fact, many are gone in a matter of months. While the work is grueling and pressure-filled, a lack of training is another significant issue for new collection representatives. Many representatives are barely trained before being unleashed on the phones to begin placing calls.
The loss of knowledge that occurs when an employee leaves a debt collection agency is substantial. The knowledge about the consumer accounts and cases an employee was working on literally walks out the door with that departing employee. High turnover at debt collection agencies creates an environment ripe for mistakes and errors.
When a creditor sells a portfolio of debt to a debt collection agency, the documentation doesn’t always arrive intact or accurate. Sometimes account numbers are transposed, debt balances are noted without the underlying calculations, or chain-of-title documentation is missing altogether.
One former debt collection industry insider familiar with Alliant Capital Management described the culture of the company this way: “There is a lot of dishonesty among the management staff and some of the practices used are unbelievable.” It’s worth noting this is the kind of culture in which your account data is being handled and stored.
Volume-Based Processing: When Speed Trumps Accuracy
Debt collection agencies handle thousands of accounts every month, and they process them in a way that prioritizes speed over accuracy. While representatives are incentivized to make a certain number of calls and meet a specific collection quota, there is little incentive for them to meticulously maintain accurate records. Quality control is not a priority in the debt collection industry.
Math is helpful in understanding the debt collection business model and how it affects you as a consumer. Debt collectors don’t actually make a lot of money on the debts they collect. Their profit margins are thin, and to remain profitable, they must collect debts quickly. The more time a debt collector spends validating a consumer’s account and researching documentation, the less time the collector has to make calls to the next consumer on their list.
The economic incentives of the debt collection business mean that, in many cases, a debt collector simply won’t invest the time and resources necessary to pursue a debt that it can’t collect. If a consumer pushes back and demands validation and documentation, many debt collectors would rather move on to the next consumer than continue to devote resources to someone who is going to put up a fight.
Common Credit Report Errors You Need to Know About
The frequency with which errors appear on credit reports is something every consumer should recognize and understand. In fact, a study by U.S. Public Interest Research Groups found that as many as 79 percent of credit reports contain some mistakes or serious errors. This is a statistic that you should memorize and internalize as you consider any collection account that appears on your credit report.
Credit report errors can take many forms. Sometimes, a debt appears on the wrong consumer’s report due to a mix-up of similar names or Social Security numbers. Other times, a debt balance is inaccurate because of improper fees or interest that has been added to the account. Sometimes, an account that was settled years ago still appears as an active account. Some consumers even find that they are being pursued for a debt that is not their debt at all.
Alliant Capital Management’s history in federal court illustrates this point. In 2017, the U.S. District Court for the Eastern District of New York issued a default judgment against the company for $3,025 after it failed to defend a Fair Debt Collection Practices Act (FDCPA) lawsuit in the case of Khan v. Alliant Capital Management. If a debt collection agency doesn’t even bother to defend itself against allegations of this type, that’s a pretty good indication that it may have a problem with accuracy.
What Happens When a Debt Collector Can’t Validate a Debt?
When a debt collector is pursuing you over a debt, the Fair Debt Collection Practices Act says it must verify that debt upon your request. If you dispute the debt and ask for validation, the debt collector must provide documentation showing that the debt is valid, that the amount the collector says you owe is accurate, and that the debt collector has the legal right to pursue the debt on behalf of the original creditor.
Many debt collectors, including Alliant Capital Management based on some of the CFPB complaints filed against it, struggle to meet that burden of validation. When a debt buyer purchases a portfolio of debt, much of the original documentation may not be included. The chain-of-title paperwork and the original account agreement may be absent, along with the payment history and other details necessary to properly validate a debt.
If a debt collector cannot validate a debt within a reasonable amount of time, credit reporting laws require credit reporting agencies to delete the account from your credit report. This isn’t a loophole or a technicality. It’s a fundamental consumer protection provided to you under federal law.
The Hidden Danger of Paying a Collection Account
Many consumers assume that paying a collection account will make a bad situation better. In many cases, however, paying a collection can actually make things worse.
When you pay a collection account, you may change the status of the account from “unpaid collection” to “paid collection.” That paid collection, however, will remain on your credit report for the full seven years from the date the original account first became delinquent.
The presence of any collection account on your credit report, paid or unpaid, is a sign to lenders that, at some point, you had a significant problem paying a bill. Many credit scoring models treat paid and unpaid collections the same, so you may pay a collection without seeing any improvement in your credit score.
In addition, paying a collection may restart the clock on the statute of limitations for a debt in your state. That means you could make a payment on an old debt you thought you were beyond the legal reach of only to find the clock starts again, opening you up to the possibility of a lawsuit. Making a payment can also be deemed an admission that the debt is yours, which can make it harder to dispute the debt later.
The Pay-for-Delete Trap
Many consumers have heard of something called a pay-for-delete agreement. In this arrangement, a debt collector agrees to remove the collection account from your credit report as part of the agreement to settle the debt. While this sounds like a great deal, in practice, it rarely works out the way you hope.
Debt collectors have a contract with the credit reporting agencies that prohibits them from removing information that is accurately reported to the credit reporting agencies simply because a consumer makes a payment. Even if a debt collector verbally agrees to delete a collection account as part of a pay-for-delete agreement, the debt collector may not follow through once it receives your payment.
Consumer complaints about Alliant Capital Management include several mentions of the company’s refusal to provide documentation once a payment has been made. One consumer who reviewed Alliant Capital Management wrote, “This company refuses to send receipts of payments or any monthly statements.” Without the proper documentation in hand, it’s very difficult to enforce a pay-for-delete agreement.
Red Flags: Warning Signs of Illegal Practices
There are some behaviors by debt collectors that should serve as giant red flags waving in the air.
If a debt collector demands immediate payment on a debt without providing documentation to validate the debt, that’s a violation of your rights under federal law.
If a debt collector threatens to sue you over a debt, particularly if it’s an older debt near or past the statute of limitations, that may also be a violation of your rights.
A debt collector that refuses to provide you with basic information about the debt it’s pursuing or that uses abusive or threatening language in its communications should also raise significant suspicions.
Finally, if a debt collector ignores your written requests to stop contacting you, that’s another sign that you may be dealing with a debt collector that doesn’t play by the rules.
Consumer reviews of Alliant Capital Management include mention of some of these behaviors. One consumer reviewed Alliant Capital Management and wrote, “Rep stated it was ‘no laughing matter’ when I told them I knew about the debt. He then started acting threatening and yelling and then hung up the phone.”
Another reviewer documented Alliant Capital Management contacting family members and friends in an attempt to relay messages about debts, which is a practice that can raise third-party disclosure concerns under the FDCPA.
The Power of Saying Nothing
Debt collectors are big fans of your voice. They want to hear it on your voicemails, they want to talk to you on the phone, and they want you to promise them things. Debt collectors collect information about you and your accounts and use that information to their advantage in their communications with you. That’s why one of the most powerful things you can do when a debt collector contacts you is to say nothing at all.
You don’t have to talk to a debt collector on the phone. In fact, you don’t have to talk to a debt collector at all if you don’t want to. You have the right under the FDCPA to insist that all communication from a debt collector be in writing. Getting your communications in writing gives you the time and space you need to evaluate the situation and respond thoughtfully. It also prevents the type of high-pressure tactics debt collectors can only use in real-time phone calls.
If you do talk to a debt collector on the phone, you may inadvertently confirm or admit facts about a debt that can be used against you. You may also make promises you have no intention of keeping or can’t keep. Debt collectors have access to information about your accounts, but you don’t have access to the same information about their knowledge of your accounts. When you engage in conversation with a debt collector, you risk giving them more information than they ever give you. That information asymmetry is something debt collectors rely on every day.
Disputing a Debt: Why It Works
When you dispute a collection account, you force the debt collector to prove its claims. Rather than just accepting what the debt collector says is true, you make the debt collector show you proof that the debt is valid, that the amount is accurate, and that the debt collector has the right to collect it.
Given the operational realities of the debt collection industry described above, many debt collectors can’t clear that bar. Debt sold in debt portfolios often arrives without all the underlying documentation. Employees and their knowledge about the accounts they handle are constantly leaving the debt collection agency. Volume-based processing means that emphasis is placed on speed rather than accuracy.
If a single collection on your credit report contains an error or cannot be validated properly, that should prompt you to take a long, hard look at every single entry on your report. The same weaknesses and flaws that caused one error probably caused more than one. Sometimes, getting a single account removed from your report is just the first in a series of dominos that will fall once you start pressing for change.
Getting Help from a Professional
If you want to try disputing items on your report yourself, you certainly have the right to do so. However, working with a professional credit repair expert can make a big difference in the outcome. Not only do credit repair professionals understand the documentation and information necessary to validate a debt, but they are also well-versed in the applicable laws and know which buttons to push to get action from a debt collector or credit reporting agency.
When a debt collector realizes it’s dealing with an experienced advocate rather than a lone consumer, it alters the calculus significantly. The strategies and tactics employed by debt collectors to get consumers to pay up are far less effective when aimed at professionals who understand the rules of the game.
When debt collectors violate your rights under federal law, there are meaningful penalties. In the Hollander v. Alliant Capital Management class action, for example, plaintiffs alleged that Alliant Capital Management collected debts beyond the statute of limitations without making legally required disclosures. Debt collectors that violate the law are subject to liability, and if you know your rights and have a professional helping you enforce those rights, you’re in a much stronger position.
Taking Control of Your Finances
You don’t have to live in fear of mysterious debt collection agencies like Alliant Capital Management that appear on your report without warning. In fact, dealing with a company like Alliant Capital Management is really a matter of something much bigger than a collection account. It’s really about taking back control of your financial identity and refusing to be intimidated or steamrolled by companies that make money by taking advantage of consumer confusion and fear.
The operational weaknesses of debt collection agencies are real, documented, and well understood. High employee turnover, volume-based processing, incomplete records, and licensing deficiencies all create vulnerabilities for debt collection agencies that a well-informed consumer can exploit to their advantage.
Your situation is not as grim as the letters and phone calls from the debt collector want you to believe. So take a deep breath, understand your options, and begin taking informed action today. Knowledge is a powerful thing, particularly when it comes to your finances.
When you understand the error rate on credit reports, when you understand the rules around debt validation, and when you understand how to get help, you can begin to take strategic action rather than simply reacting anxiously in the moment.
Ready to Reclaim Your Finances?
If you’re seeing Alliant Capital Management on your credit report, you need to understand your options and your next steps.
At FightCollections.com, we have helped thousands of consumers just like you navigate this tricky and often frightening financial situation.
Our team specializes in disputing erroneous collection accounts and holding debt collectors accountable when they don’t follow the law. We know how to review your credit report carefully and develop a personalized plan to address your specific circumstances.
So why wait? Contact us at FightCollections.com today to talk to a credit expert who understands exactly what you’re going through and knows how to help. The debt collectors have their playbook for collecting debts.
Now, it’s time for you to have yours.
