American Express Credit Fraud Alert – Phony Debt Collection on Behalf of American Express

A reader sent us the following debt fraud alert: A company with no name is sending out delinquent debt collection letters allegedly on behalf of American Express.

If receive a debt validation letter, please read the fine print on both the stationary and envelope!

Debt collection tactics in the AE case:

  • The top of the letter contains an address, but no company name.
  • In small type at the bottom right of the letter are the initials DBAMEXBS….as in, Doing Business as American Express BS!
  • The envelope contains no company name or address.
  • The date of the letter is different than the official “post office” date on the envelope.  The date on the envelope reveals that it was mailed ten days later. Why the time lag?
  • The sender gives the intended victim 30 days to dispute the debt “from the date of this letter” (or else!).  By holding the letter for two weeks, the debt collection group hopes to heighten fear in the heart of the recipient – convincing them to call the phone number listed on the letter.
  • Even the amount of the disputed debt is wrong.
  • The zip code included on the stationary and envelope are not even close.

If you receive an American Express debt collection letter that appears fraudulent, don’t call the number listed! If the sender failed to include your full credit card number, they don’t have it. Don’t provide it.

Phone American Express directly to validate your debt.  If you owe money but don’t wish to phone American Express, you should: 1) contact an attorney; or 2) respond in a few sentences stating that you dispute the debt. Full stop. No more.  Type your name, but don’t sign the letter. Don’t give your signature to crooks.

How could such a debt collection group get their hands on American Express credit card dispute cases?

The following article by Jeffrey Horowitz of the American Banker provides insight.

Bank of America has sold collections agencies rights to sue over credit card debts that it has privately noted were potentially inaccurate or already repaid.

In a series of 2009 and 2010 transactions, Bank of America sold credit card receivables to an outfit called CACH LLC, based in Denver. Co. Each month CACH bought debts with a face value of as much as $65 million for 1.8 cents on the dollar. At least a portion of the debts were legacy accounts acquired from MBNA, which Bank of America purchased in 2006.

The pricing reflected the accounts’ questionable quality, but what is notable is that the bank could get anything at all for them. B of A was not making “any representations, warranties, promises, covenants, agreements, or guaranties of any kind or character whatsoever” about the accuracy or completeness of the debts’ records, according to a 2010 credit card sales agreement submitted to a California state court in a civil suit involving debt that B of A had sold to CACH.

In the “as is” documents Bank of America has drawn up for such sales, it warned that it would initially provide no records to support the amounts it said are owed and might be unable to produce them. It also stated that some of the claims it sold might already have been extinguished in bankruptcy court. B of A has additionally cautioned that it might be selling loans whose balances are “approximate” or that consumers have already paid back in full. Maryland resident Karen Stevens was the victim of one such sale, which resulted in a three-year legal battle (see related story).

Bank of America declined requests to comment for this story, other than to say through spokeswoman Betty Riess that it works with credit card customers to try to resolve delinquent debt issues. CACH did not respond to several phone and email messages seeking comment on the terms of its purchases.

Some industry observers said that the language in Bank of America’s sales documents should be regarded as standard legalese intended to protect it against a disgruntled buyer’s legal claims. And even though Bank of America refused to stand behind the accuracy of the records it sold, debt buyers are the ones who make the call to sue.

 

Protecting your rights,

Dr. Joyce Starr

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