If you see Southwest Credit Systems listed on your credit report, you’re probably feeling frustrated and possibly confused or panicked. You should not make any decisions until you understand who Southwest Credit Systems is and why the next steps you take are crucial.
Many consumers in your shoes will immediately call the collection agency or rush to pay the debt. One of those two choices can have serious consequences. The debt collection industry is based on fear and urgency. Southwest Credit Systems has had over 50 years to perfect the model.
They are a third-party debt collector. They collect debts for telecommunications providers like T-Mobile, cable companies such as Comcast and Time Warner, utility companies, property management companies, toll authorities, and educational institutions. Their CEO is Jeff A. Hurt. The company employs 175-201 people, and they have an estimated annual revenue of $25,000,000.
At the end of 2015, they were listed among the debt collectors with the highest overall complaint volumes that the CFPB has seen since July 2013. The CFPB complaint database has almost 2,000 complaints about Southwest Credit Systems. This is not a good thing.
The Better Business Bureau (BBB) has received 822 complaints over the past three years alone. Consumer reviews are consistently negative, with 1.4 stars out of 355 Google reviews, 1.0 stars out of BBB customer reviews, and the BBB itself says that, “most complaints that have been filed against this business relate to problems with billing and collection issues. Consumers have indicated that the business makes numerous calls at inappropriate times, and in many cases, the consumer says the business has the wrong person.”
In July 2020, Southwest Credit Systems entered into a consent order with the Connecticut Department of Banking for operating an unlicensed branch office in Corpus Christi, Texas from August 2017 to January 2019. During that time, the company collected debts from Connecticut residents without a license.
They have been a party to multiple class-action lawsuits for violating the Fair Debt Collection Practices Act. The lawsuits alleged that Southwest Credit added collection fees to the debt that ranged anywhere from $19 to over $70. These fees were never disclosed in the original debt agreement.
Should You Pay the Debt?
If you see Southwest Credit Systems on your credit report, you may feel the urge to pay the debt. You should not pay the debt. If you pay the debt, it will not be removed from your credit report. Instead, it will be marked as a paid collection, and it will continue to harm your credit score for up to 7 years from the original delinquency date.
The Paid Collection Myth
If you are not aware, paying a collection has the same affect on your credit score as not paying a collection under most credit scoring models. You will not be rewarded for paying a collection. If you pay a collection, you are admitting that the debt is valid and you are giving up your rights to request for the debt to be removed.
“This company placed a collection on my credit report for a T-Mobile charge. I am not a T-Mobile customer nor have I ever been. Furthermore, this company has never attempted to contact me or collect the debt. I called Southwest and they indicated I could pay the $86 debt, but then it would still remain on my credit report as a debt that had gone to collections. However, if I paid them $378 they would remove the debt from my credit report.” – BBB Review
If Southwest is attempting to collect on a debt they acknowledge is potentially fraudulent and they are willing to remove it from your credit report, why on earth would you pay them $378 to do so? This is why you should never negotiate from a position of weakness.
Disputed Errors
In a study done by U.S. PIRG, they found that 79% of credit reports contain errors or disputes. This should cause you to pause and reconsider paying on a collection account. The debt collection industry does not operate with accuracy. They operate on volume. Sometimes the accounts are sold multiple times before they reach the collection agency. When the accounts change hands this many times, the documentation can be lost or altered and consumers are often times hurt in the process.
Southwest Credit Systems has been involved in over 430 federal cases concerning consumer credit or debt collection. There are multiple CFPB complaints that indicate that Southwest Credit Systems placed debts on consumers’ credit reports without ever attempting to contact the consumer.
“Irresponsible and unethical! They sat on an account for almost two years before placing it on my credit report. They never once attempted to contact me.” – Yelp Review
If Southwest Credit System is attempting to collect on an account without your knowledge, you should be apprehensive. This is not paranoia. It’s called being smart.
The Phone Call
They want you to call them and speak over the phone. The debt collection industry operates in a way that if you speak over the phone, there is no record of the conversation. Collectors can lie and say you admitted to the debt or agreed to make payments you never committed to. If it’s your word against theirs, you will always lose. Phone calls open the door for them to manipulate you. Debt collectors are trained to use coercive tactics over the phone. They want to scare or shame you into making an immediate payment over the phone.
In March 2017, Southwest Credit Systems was sued in federal court under the TCPA for making robocalls that started with silence before an automated click transferred the call to an operator.
“I sent a money order to them to resolve my debt in full. My bank indicated the money order was cashed on 12/24. They still hadn’t posted my payment almost three weeks later. It took me threatening to be absolutely rude to get a supervisor involved who indicated they would send me a letter that the debt was resolved.” – BBB Review
You should never call Southwest Credit Systems. You should never answer their phone calls. You should never negotiate over the phone. Everything should always be done in writing so you have a paper trail and they can’t manipulate you.
Many consumers are concerned that if they don’t call or speak with the debt collector, they will sue them or garnish their wages. In most cases, this will not happen. Lawsuits and wage garnishment are possible, but they are rare. Debt collection agencies would rather work with consumers who call and immediately pay them over the phone. If a consumer is demanding validation and refusing to pay without it, they become a nuisance.
Your Rights as a Consumer
The Fair Debt Collection Practices Act was created because debt collectors have a history of taking advantage of consumers. There are rights afforded to consumers that Southwest Credit Systems must abide by.
Debt Validation
One of those rights is that you are entitled to request proof of the debt. You can request the balance, the name of the original creditor, the date of your last payment and any documentation necessary to prove you owe the debt. Once you make this request, the debt collector is required to provide you with all of the information you requested. If they cannot provide you with the requested documentation, they are not allowed to continue collection activity.
CFPB complaint records show that there have been multiple instances where Southwest Credit Systems has failed to validate a consumer’s debt after it was requested.
“Southwest Credit Systems is falsely reporting a debt to the credit bureaus. When I dispute the accuracy of this information with one bureau, it gets deleted and reported to another bureau.” – CFPB Complaint
If the debt has changed hands several times before reaching the debt collector, the documentation could be lost or destroyed. The original contract you signed, your payment history, and your account records may not exist anymore. This is to your advantage.
Credit Bureau Disputes
You have the right to dispute Southwest Credit Systems with the credit bureaus directly. Once you file a dispute with the credit bureau, they are legally obligated to conduct an investigation. They must contact the creditor (Southwest Credit Systems) and request that they validate the debt. If Southwest Credit Systems cannot validate the debt, the credit bureau must remove the account from your credit report. This process bypasses Southwest Credit Systems altogether.
When you dispute directly with the credit bureau, Southwest Credit Systems has a limited amount of time to respond and provide documentation to prove their claim. If they fail to respond or provide adequate documentation within the timeframe, the credit bureau must remove the account from your credit report. This is not a technicality. This is the law and it is on your side.
The Secret to Successful Disputes
When you dispute a collection, you are not saying you refuse to pay the debt. You are saying that the information is not accurate. If there is anything on your credit report that is inaccurate, an error, a dispute, or cannot be verified within a reasonable amount of time, it should be removed from your credit report.
So, why are disputes successful? Most collection agencies do not respond to disputes. They collect so many debts that they cannot keep track of the documentation for each account. When they are requested to provide validation for the debt within a certain amount of time, they cannot or do not comply. The success of the dispute process relies on the collection agency’s inability to meet the validation requirements.
There are multiple CFPB complaints about Southwest Credit Systems and their responses are mostly “closed with explanation” rather than “closed with non-monetary relief” or “closed with monetary relief”. This indicates that when consumers dispute Southwest Credit Systems, they defend their position instead of providing relief.
Consider the multiple class-action lawsuits against Southwest Credit Systems for allegedly adding fees to the balance of the debt that was not part of the original agreement. If the balance is incorrect, that is inaccurate information that can be disputed and possibly removed.
Professional Help
You can try to dispute the collection agency yourself, but you are at a disadvantage. You do not understand the laws. You do not understand the process. You do not understand the games that collection agencies play. They know all of the tricks and techniques to get you to pay them. They know which consumers will call and pay immediately and which consumers will dispute and request validation. You are playing a game you do not understand.
Credit repair professionals understand the process. They understand the laws. They understand the games. They can help you identify inaccuracies on your credit report that you may not recognize on your own. They can help you escalate your dispute if the collection agency ignores your request for validation. They understand which pressure points to push to force the collection agency to respond to your dispute.
You should not try to navigate this process on your own. You should not attempt to learn the laws and the process in a short amount of time. Southwest Credit Systems has over 50 years of experience collecting debt. Do you honestly think you can outsmart them on your own?
Conclusion
Southwest Credit Systems has almost 2,000 complaints with the CFPB, 822 complaints with the BBB in just three years, a rating of 1.0 to 1.4 stars on consumer review websites, and they have been involved in over 430 federal cases regarding consumer credit or debt collection. They have been sued multiple times in class action lawsuits and they entered into a consent order with a state for collecting debts without a license. This is not a reputable company and you should not take their word for anything.
Do not panic. Do not call them. Do not pay them. Do not make any decisions until you understand your rights and the process. If Southwest Credit System is on your credit report, you should dispute them immediately. Do not call them and ask questions later. Dispute first. Ask questions later.
FightCollections.com is a credit repair agency who specializes in removing debt collectors and questionable collection accounts from consumers’ credit reports. We understand their tactics and we understand how to beat them. We will dispute the collection agency. We will request validation. We will follow up. We will do all of the work for you so you do not have to try to navigate the process on your own.
Contact us at FightCollections.com today for a free consultation. Let us review your credit report and identify all of the questionable accounts. Let us help you develop a strategy to repair your credit. You have rights. It is time to use them.