If a collection account is being reported on your credit report, or you receive a phone call or written correspondence from a company called Capital Management Services, don’t ignore it.
The company is an established collection agency serving a diverse clientele. You’ll need to deal with Capital Management Services in some way that will satisfy the obligation and improve your credit score in the process.
The worst course of action with any collection account or collection agency is to completely ignore it. That’s a frequent response, particularly when consumers don’t believe they owe the money the agency claims they do.
A collection account can stay on your credit report for up to seven years from the date it first became delinquent with the original lender. It will lower your credit score for the full seven years, and even more so if the balance is left unpaid.
Is Capital Management Services Legit?
Based in Buffalo, New York, Capital Management Services, LP is a collection agency that’s been in business since 2000.
The company is nationally licensed and recognized, and like many collection agencies, it refers to itself as a receivable management firm.
They have more than 2,600 employees and have recovered $2.4 billion in delinquent accounts.
The company does not disclose which industries or institutions it represents in its collection efforts on its website.
We can probably assume they provide collection services for a diverse group of clients, so you may be dealing with the company on a wide range of debt types.
There is some indication, however, that the company frequently represents credit card issuers and student loan providers.
The company has a Better Business Bureau rating of “A+”, the highest rating on a scale running from A+ to F.
However, the company is not BBB accredited. The BBB reports 26 customer complaints filed against Capital Management Services in the past three years—all of which have been answered by the company, with nine resolutions to consumers’ issues.
How to Deal with Capital Management Services
Before getting into any specific strategies for dealing with Capital Management Services, let’s start with some basic rules you should follow in dealing with any collection agency.
If you’re not careful, you could make your situation worse, and the rules below will help you avoid that outcome.
1. Don’t Communicate by Phone
Without a doubt, this is the worst way any consumer can deal with a collection agency.
The deck is stacked entirely in favor of the agency over the consumer.
That’s in part because collection agents are trained and experienced in dealing with consumers in the collection process, while consumers lack similar qualifications.
Collection agents know how to draw additional information out of consumers, and even how to get them to make promises to pay that could prove harmful later in the process.
To make matters worse, collection agencies routinely record phone conversations. That gives them a record of all exchanges that can be used against you. If the company decides to bring a lawsuit, the phone recordings can be presented as evidence in those proceedings.
Though your first contact with Capital Management Services may very well be by phone, make sure that’s the last call.
The risk of providing too much information or making a promise to pay is too great by phone to allow that practice to continue.
2. Communicate in Writing
Under federal law, you have the right to demand that all communications with a collection agency are handled by written correspondence. Don’t be afraid to assert this right.
By limiting communications to written correspondence, you’ll eliminate harassing phone calls, both at home and at work. You’ll also reduce the possibility of being intimidated into providing additional information or making promises to pay.
One of the inherent problems with phone conversations is the tendency consumers have to either ramble—and inadvertently give away information they don’t need to—or feel obligated to answer questions they don’t need to. Written correspondence removes both potential outcomes and levels the playing field.
In any communications with a collection agency, your goal is twofold:
- To provide as little information to the collection agency as possible (that may be used against you), and
- To get as much information from the collection agency as possible.
Written correspondence will also provide an additional, very important benefit: it’ll give you a written paper trail of all your communications with Capital Management Services.
That paper trail will help you to both organize and execute a workable strategy.
Be sure that in all communications you send to Capital Management Services, you do so by certified mail, return receipt requested.
That will provide written evidence that your letters were both sent and received.
3. Never Promise to Pay
This one is super important, so keep it in mind in any communications with Capital Management Services.
If you make a promise to send a payment to the collection agency, whether in partial or full payment of the debt, and fail to do so, the company can assert deception against you, and use that against you in court.
You also need to be careful not to even imply you’ll send a payment, as that can be interpreted as a promise.
The only time you should make a promise to pay is if you have the funds available to make that payment, and you fully intend to deliver on it.
Anything less could put you in a worse situation than you were in when you started.
4. Know Your Rights
The Fair Debt Collection Practices Act (FDCPA) provides consumers with certain protections from collection agency abuses.
You can learn these protections by reading the Debt Collection FAQs provided by the Federal Trade Commission (FTC).
Just knowing your rights under federal law may give you the upper hand when a collection agency starts getting ugly.
Get Professional Help to Deal with Capital Management Services
If you’re sensing that your attempts at dealing with Capital Management Services aren’t working, or if you decide against the do-it-yourself route, you can get professional help by engaging the services of a good credit repair company.
They know how to deal with collection agencies, and will have a better chance at settling your accounts and improving your credit score.
Using a credit repair company is even more important if you have multiple collection accounts since settling those can turn into a part-time job if you try to do it yourself.
However, if Capital Management Services threatens you with legal action, you may need to hire a credit attorney.
Lexington Law specializes in credit law and may keep the case from ever making it to court.
Specific Strategies for Capital Management Services
With the above basic rules in mind, you can use various strategies in dealing with Capital Management Services. Here’s what we recommend:
Demand Debt Validation
When a collection agency asserts a claim against you, they must validate the debt.
This is done through a debt validation letter, which you have a right to receive under federal law.
The letter must provide complete information on the debt, including the name of the original creditor, the date the account went into collection, the amount of the debt, and information that clearly connects you to the obligation.
If Capital Management Services either fails to provide the letter, or it comes back missing significant information, you’ll have a basis to dispute their claim. We’ll cover how to do that shortly.
Request a Goodwill Deletion
Let’s say Capital Management Services provides a fully complete debt validation letter, or you readily acknowledge you owe the obligation.
You either pay the debt, or you have paid it in the past, but the collection account is still showing on your credit report.
Since you’ve already paid the debt, the only issue is the collection account entry.
You may be able to have that removed by requesting a goodwill deletion, which you can do by sending the company a goodwill letter.
In the letter, you’ll request that Capital Management Services delete the collection account from your credit reports as a goodwill gesture.
The letter should include not only a reminder that you’ve already paid the debt, but also an explanation that attributes the debt to extenuating circumstances.
For example, let’s say the account went into collection because you were out of work for eight months, or had to care for an ailing loved one for an extended period of time.
That kind of explanation may convince the agency to remove the collection account from your credit reports.
It may be even more convincing if you also send documentation supporting your claim.
A goodwill deletion request is not guaranteed to work, but it’s certainly worth trying if the debt has already been paid, and you have a reasonable explanation for why the account went into collection.
Offer a “Pay-for-Delete” Agreement
This is a strategy that may be worth trying if you’re willing to pay the debt in full, and your main objective is to have the collection account removed from your credit reports.
It’s hardly guaranteed to work, but as the saying goes, nothing ventured, nothing gained.
The basic concept is that you will offer to pay the debt in full in exchange for Capital Management Services deleting the collection account from your credit reports.
You’ll do this using a pay-for-delete letter. Capital Management Services may agree to the arrangement because it offers an opportunity for them to receive full payment.
But, it’s just as likely—and even more so—that they’ll agree to the arrangement, then renege after receiving payment.
They can do that, even if they’ve provided written confirmation of their willingness to cooperate.
And, if that happens, you’ll have no legal recourse, because pay-for-delete arrangements are not legally enforceable. But, you can certainly try it and see what happens.
Demand Deletion If Not Your Debt
Your best chance of making the whole collection account go away will be if Capital Management Services is either unable to provide a debt validation letter, or if it comes back incomplete.
You can then demand they remove the collection account from your credit reports and halt all further collection actions against you.
Even if they don’t cooperate, you can open a dispute with all three credit bureaus—Experian, Equifax, and TransUnion—based on the missing or incomplete information.
The credit bureaus will investigate within 30 days, and will remove the collection account if Capital Management Services is unable to fully verify the debt.
However, there is the possibility the collection agency will continue to pursue you for the debt, even if the credit bureaus delete the collection account.
That’s hardly an unusual outcome in the collection industry.
Settle the Debt
If you owe the debt Capital Management Services claims you do, it may be possible to settle the account for less than the full amount.
This will not remove the collection account from your credit reports, but it will put an end to future collection activities.
Remembering that the entire process needs to be handled with written correspondence, you’ll send Capital Management Services a letter offering to settle the account for a lesser amount.
Start with something like 50% or less. If they’re willing to settle, they’ll counter with a higher number.
You’ll then go back and forth until a satisfactory dollar amount is reached.
However, send no money until you receive a letter of confirmation of the arrangement from Capital Management Services.
It must acknowledge that they are accepting the reduced payment in full satisfaction of the debt, and will report the account as paid with all three credit bureaus.
(This is not a bad outcome, since reporting a previously open collection account as paid should provide at least a small improvement in your credit score.)
If you send money before receiving this letter, the collection agency may accept the payment, and then continue to pursue you for the full amount of the original debt.
It’s not fair, but it’s the way collection agencies work.