Credit Card Companies

[jiacinto]

Here is something that really angers me. A thread about MBNA came up so this is where I got this thought. So here is my complaint againt the loan/credit industry. I have student loans and they get sold all the time. Anyway, I consolidated with one company. Then, a few weeks later, I get a letter from a company I never heard stating that they had my loans. I called the first company and they said the second company was simply subcontracted to do the administrative serviciing of the loan.

Why isn't there a law stating that if companies pass on accounts or hire outside companies to handle the administrative tasks, they must tell the debtor so that they don't have to make phone calls or waste time?

[Julien Sorel]

1. I'm confused:

You said,

Then, a few weeks later, I get a letter from a company I never heard stating that they had my loans.

But you also said,

Why isn't there a law stating that if companies pass on accounts or hire outside companies to handle the administrative tasks, they must tell the debtor so that they don't have to make phone calls or waste time?

They did contact you, if I read your post correctly.

[jiacinto]

6. No

The letter didn't say that:

We are Company X. Company W has hired us to take care of your loans.

They just said that we are Company X and we own your loans.

[BiggJawn]

2. My question is...

Why do small institutions make such a big-assed deal about being your local "hometown bank", then when you get a loan with them, they sell your paper within 6 months to some megla-bank from Hell?

[yankeeinlouisiana]

3. It's called diversification

Mortgage companies do this all the time. Banks/mortgage companies will spread their risk of loans being defaulted. Typically, an area of the country might be in a slump, but not the whole country. (Except lately.) This way, if the midwest is in a slump, the east and west costs are usually doing ok and people won't default on their loans. If all of their loans were located in one area of the country, they have a better chance of going bankrupt.

However, you should have received a letter stating the other company would be handling the "administrative" work. :-)

[dweller]

4. What's in YOUR wallet?

simple answer, none of your f**king business.

dp

[unblock]

5. what gets ME is ...

why does the notification come from the NEW company???

actually, i know the answer, because i've personally done these notifications. the new company just bought the loans (or is subcontracting to service them) or maybe it's the same company all along but they just securitized and have to direct you to pay to a different lockbox.

anyway, the new company is on the hook to service all the loans and they have to get you to pay to the correct p.o.box, so they notify you with the correct info.

the old company is done with the loans, they got paid, so they don't care. they're off to the carribean with all that loot.

but from the point of view of the debtor, i just got an UNCONFIRMED letter saying 'pay me' instead of paying that guy! why should i believe that, and isn't that a big scam risk?

i mean, what's stopping someone with access to a debtor list from claiming to have purchased the loans, setting up their own p.o.box and collecting several days collections before closing down and fleeing? well, mostly people pay with checks, so there's still the issue of how to cash it all, and at least one debtor would call the old company to confirm, so maybe i'm just paranoid, but still....

seems to me these notification should at least include something on the old company's letterhead acknowledging the sale....

[jiacinto]

7. The loans weren't sold

They've just been subcontracted to the other company to have them serviced.