Immediately upon discovering an unknown collection account on your credit report, you will likely feel a sense of urgency. That is the reaction collection agencies are hoping for.
Before you call the number listed on the report, or quickly make a payment, take a moment to understand that you are dealing with an industry built upon flaws, loopholes, and soft spots that you can exploit to your advantage.
You are reading this article because you discovered Plaza Services, LLC on your report. Their entire business plan is based on you reacting to them with haste and emotion, rather than with a clear and level head. But there are inherent weaknesses in the way that Plaza Services and other collection agencies operate that you can use to your advantage. Let’s get started!
Who is Plaza Services?
Plaza Services, LLC is an Atlanta, Georgia based debt purchaser and third-party collection agency. Here is some basic information about the company:
Address: 110 Hammond Drive, Suite 110, Atlanta, GA 30328
Phone: (877) 475-1103
Secondary Phone: (833) 628-0136
Years in Business: August 2014 (approx. 11 years)
BBB Accredited: July 22, 2016
Credit Bureau Reporting: TransUnion only
The company purchases charged-off debt from the original creditors and attempts to collect on the account. When a debt is sold multiple times prior to being placed with Plaza Services, it is common for the documentation chain to be broken or to be missing altogether. This can present valuable opportunities for consumers who understand how to exercise their verification rights.
What’s Their Track Record?
Plaza Services has a pretty bad track record, but it’s one that is common for debt collection agencies. The Better Business Bureau has received 293 complaints about the company in the past three years, with 61 complaints closed in the past year alone. Of the 293 complaints, only 39 have been marked as resolved.
In addition to complaints filed with the BBB, there have been at least 13 federal lawsuits filed against Plaza Services. Most of the suits were filed based upon allegations that the company violated the Fair Debt Collection Practices Act.
In the case Conquest v. Plaza Services, LLC, the court denied the motion to dismiss filed by the company after finding that the collection letters they were sending to consumers did not adequately inform them that they must dispute the debt in writing. There are several other lawsuits that have been filed against the company for similar reasons.
Despite the high volume of complaints and lawsuits, there have been zero formal enforcement actions taken against Plaza Services by federal regulators. The company is based in Georgia, a state that does not require debt collectors to be licensed, which means that they are not subject to routine compliance audits or surety bonding requirements as they would be if they were based in states like California or New York.
The Soft Spots of Collection Agencies
High-Volume, Low Accuracy
Debt collection agencies handle thousands of accounts every month. Many of the employees who will be working on your account this month will not be with the company next month. The level of training is low, and the compensation model incentivizes speed over accuracy.
This combination inevitably leads to mistakes. In fact, a study conducted by U.S. PIRGs found that 79% of all credit reports contain errors or inaccuracies. Knowing that debt collectors input data into an already flawed system, and doing so in high volume and at a rapid pace, it is extremely likely that your account contains some level of error.
A verified customer review of Plaza Services confirms this to be true: “I settled my debt with them almost 3 years ago. After they failed to update the collection on my credit report a month later, I called them and all of a sudden they had no record of my payment… Someone in your company accepted my payment and you either don’t care to look into it further or you know it happened and you are trying to cover it up.”
The Documentation Gap
When original creditors sell debts to a collection agency, they typically only provide the most basic information. This is usually data that can be found in a spreadsheet, such as names, addresses, account numbers, and balances. Rarely does the detailed documentation associated with the debt sell alongside it. This can include things like signed agreements, payment records, account statements, and more.
Debt buyers purchase accounts like this because they are cheap. It’s difficult to collect on them, and they are not always easy to validate. The further the debt is away from the original creditor, the less likely there is to be much documentation to back it up. This is another area where it is in your best interest to understand your rights.
Under the FDCPA, you have the right to request verification of any debt. This includes verifying the balance, the identity of the original creditor, and even validating that the debt is yours. If the collection agency cannot provide this information, they do not have the right to collect on the account or report it on your credit report.
The Risk of Paying First
The Paid Collection Trap
You want to pay off the debt and be done with it. That’s completely understandable. But before you make a payment, you should know that doing so will change the status of the account on your credit report from “unpaid collection” to “paid collection.” The account will still remain on your credit report, and the damage has already been done.
Collection accounts can remain on your credit report for up to seven years from the original date of delinquency. Paying the balance does not remove the account from your report, nor does it reduce the amount of time it is listed. In some instances, making a payment can even reset the clock and extend the amount of time a collector can pursue you.
A verified customer review from a Plaza Services customer reads: “This company has taken their payments from me ten times and is still taking more. I’ve paid, and this is still on my credit report. It’s not fair and extremely predatory.” This isn’t an isolated incident. It’s a common occurrence in the debt collection industry. Consumers are told to pay their debts, when in reality it doesn’t even resolve the credit reporting issue.
Rethinking Your Approach
By now, you should have a different understanding of how debt collection agencies operate. Companies like Plaza Services don’t have some moral obligation that you owe them. They bought your debt, which was simply an entry on a spreadsheet that included your name and an outstanding balance, for pennies on the dollar.
They’re an investment firm that purchases distressed assets. Your debt is a commodity to them, not a promissory note that you violated. They purchased the right to attempt to collect on your debt, but that doesn’t mean they have the documentation to prove you owe it, that the amount is accurate, or that the statute of limitations hasn’t already expired.
When you approach the situation armed with the knowledge that debt buyers are just that — buyers and sellers of financial instruments — you can begin to deal with them from a position of logic rather than emotion. They don’t have the upper hand here.
How to Deal with Plaza Services Collections
The best way to deal with a Plaza Services collection is to dispute the account instead of paying it. Here’s why. When you dispute the account through the credit bureaus, the collection agency must investigate and verify the account within 30 days. If they can’t verify it, the credit bureau must delete the account from your report.
Considering that Plaza Services has been sued multiple times over inadequate validation notices and has 293 complaints registered with the BBB, there is a good chance that Plaza Services may not be able to verify some accounts.
Here’s the thing: collection agencies don’t want to spend more money to verify, document, and defend an account than the account is worth to them. If they have to file a lawsuit, conduct a thorough search for documents, and/or conduct ongoing efforts to validate an account, it will cost them money, which will cut into their profits.
In many cases, they would rather abandon pursuit of the account than spend the money to verify it.
What Can You Dispute?
You can dispute and potentially remove a collection account from your credit report if the account information is incorrect, if the account cannot be verified with documentation, if the account was placed on your report as a result of identity theft, or if the collection agency does not respond to your request for verification within the allotted time period.
The devil is in the details, so if you think any of the following is incorrect, you may have grounds for a dispute:
Balance reported
Is your name spelled correctly?
Is the account number correct?
Is the date of first delinquency correct?
Because Plaza Services only reports to TransUnion, you may want to focus any disputes you have with that credit bureau.
Here’s an example of an aggressive tactic that one consumer experienced with Plaza Services, as reported in a complaint filed with the BBB:
“Plaza Services purchases loans with 300% interest that people can’t pay off from companies such as CashNet and then drags the least informed with the most to lose and the fewest resources through a confusing court system…A $1000 debt turns into a $3000 debt.”
If the balance is not accurate, you may be able to dispute it.
Why You Need Professional Help
Information Imbalance
Debt collectors work in the credit reporting industry every day. They know the ins and outs of the system and how to work it to their advantage. They know which of your buttons to push to get you to do what they want. Most consumers only deal with collection agencies once or twice in a lifetime, which means that collectors have a huge advantage when it comes to information.
That’s why collectors use urgency and fear to get consumers to pay debts quickly without taking the time to research their options or understand their rights. Here are some of the ways they may try to rush or scare you into paying a debt:
Phone calls designed to create a sense of panic
Letters that imply that they will file a lawsuit immediately if you don’t pay
Vague threats about what will happen to your credit score
By working with a professional credit repair agency, you can even the playing field. The agency will understand the weaknesses of the collection agency and will know what documentation the collector must provide. The agency may be able to find errors in the account that you don’t recognize.
Strategic Silence
Consumers have a powerful tool in their arsenal that they rarely use: silence. Every time you talk to a debt collector, you give them information that they can use against you. Even if you simply acknowledge that you owe the debt, discuss possible payments, or explain why you can’t pay it, you are providing them with ammunition they can use later.
A professional credit repair agency will handle all communication with debt collectors on your behalf, which means that you won’t inadvertently give them any information they can use against you. This is especially important when dealing with Plaza Services, which has a history of problems with payment processing and credit reporting disputes.
Strategic Use of the FDCPA
The FDCPA regulates what collectors can and can’t do when pursuing consumers for payment. Knowing your rights under the law and how to use them to your advantage can make all the difference in dealing with a collection agency. A professional agency will understand how to wield your rights as both a sword and a shield.
Protecting Your Future
Fixing the Immediate Problem
If you have a Plaza Services collection on your report, you first need to address the current problem. That collection is harming you right now by reducing your credit score, harming your ability to get a loan, and possibly even affecting your employment prospects. Every day that the inaccurate or unverified collection remains on your report, it’s causing you harm.
You need to act now to address the problem, but you need to do so in a strategic way by disputing the account through the proper channels instead of simply paying the collection agency to make the problem go away.
Once you have resolved the issue on your credit report, you can focus on strategies for preventing the problem from happening in the future, such as monitoring your report regularly, understanding your FDCPA rights before you have a problem, and knowing how to respond if a collection agency contacts you in the future. But first, you need to resolve the current issue.
Taking Action
Plaza Services has 293 complaints registered with the BBB, with only 13% of them resolved. The company has been the target of at least 13 federal FDCPA lawsuits. It has a history of payment processing failures. And it is based in a state that does not require debt collectors to be licensed.
All of these factors suggest that Plaza Services may have significant vulnerabilities that you can exploit to deal with a collection on your report.
You don’t have to navigate the situation on your own. The credit repair specialists at FightCollections.com can help you identify any errors in the collection account, challenge any inaccurate reporting, and exploit any gaps in documentation that the collection agency may have.
Conclusion
Receiving a collection letter from Plaza Services can be frightening, and that’s exactly what the collection agency is counting on. But behind that scary letter is a company that has been sued multiple times for its practices, has hundreds of unresolved complaints registered against it, and operates in an industry where documentation and processing errors are common.
Instead of responding to the situation by immediately paying what you owe, you should take informed action. Understand your rights when it comes to verifying a debt. Recognize that debt purchased by a collection agency may not have the documentation necessary to verify it.
And consider working with a professional credit repair agency that understands how to exploit the weaknesses of high-volume collection agencies.
Your Next Step
Don’t let Plaza Services or any other collection agency force you into making decisions that may not be in your best interests.
Contact FightCollections.com today for a free consultation. We’ll review your credit report, identify any potential errors or gaps in documentation, and help you develop a strategy for dealing with the situation.
The sooner you act, the sooner you can begin repairing any damage to your report and protecting your financial future.
