Are you being pestered by letters and phone calls from a company called IC System? If so, you may have a tiger by the tail. IC System is one of the most established and efficient collection agencies in the industry. If they’re contacting you, you need to take action.
In this article, I’m going to show you the best course of action to do that.
What is IC System?
IC System, Inc. is a legitimate debt collection agency, meaning a notification of a debt from them should never be ignored. The company is located in St. Paul, Minnesota, and has been in business since 1938. This makes it one of the best-established collection agencies in the country. And for what it’s worth, IC System even has a Better Business Bureau rating of “A+”, the highest rating the agency issues.
So that you know the “beast” you’re dealing with, collection agencies often work on commission. They offer a service to other companies that have unpaid debts owed to them. IC Systems is compensated by those companies to assist them in recovering the amount owed.
One popular program they have charges a 25% contingency fee, meaning IC System earns 25% of the amount they collect for their client companies.
As a debtor, this commission structure is both a friend and a foe.
On the foe side, it helps to explain why the agency is so aggressive in attempting to collect a debt. After all, they won’t get paid their fee until you pay the debt.
But you can also make the commission process your friend. Since IC System will earn their commission on whatever the amount is that they collect, they may be almost as happy to get 50% of the debt claimed as they will be at 100%.
We’ll get into how you can use that to your advantage as we move along in this article.
Who Does IC System Collect For?
The short answer is, everybody! Just about any business or institution that’s owed money by anyone is a candidate for their services.
Their website does provide a list of their most common clients. Those include small businesses, rental agencies, governments, financial institutions, utilities, education, law firms, dentists, medical practices, chiropractors, optometrists, veterinarians, and businesses engaged in retail, telecommunications, and pest control, among many others.
This is another compelling reason why any notification from IC Systems, even for what seem to be multiple debts, should never be ignored. Their client base is so diverse that it could be representing just about anyone you’ve ever done business with in the past.
How to Remove IC System from Your Credit Report
Okay, so you’ve been contacted by IC Systems, maybe once, maybe multiple times. You’re going to need to be proactive. Ignoring the notifications will only lead to bigger problems.
You should be aware that either an original creditor or a collection agency can secure a judgment against you if you fail to cooperate. A judgment will take the debt to a higher level, since it removes any ability to negotiate the payment. The only way to settle the account will be to pay it in full.
Meanwhile, a judgment enables the creditor or collection agency to take steps to recover the debt. That can include garnishing your wages or your bank account.
Most collections don’t become judgments. However, a judgment may be pursued on a large debt balance. The same company that might not pursue a judgment on a $500 debt may not hesitate on a $5,000 debt.
I’m not telling you this to scare you into paying the debt, but you should be aware of the range of possibilities.
Given how uncomfortable a situation can become if the judgment is filed, the best strategy is to take action before it reaches that stage.
Here is the recommended course of action, in five steps:
1. Do Your Homework
Your first effort in this direction should be to familiarize yourself with the Fair Debt Collection Practices Act, or the more user-friendly Debt Collection FAQs provided by the Federal Trade Commission (FTC).
They will let you know exactly what your rights are under federal law. You should familiarize yourself with those rights and be fully prepared to exercise them in your dealings with IC System or any other debt collector.
For example, a creditor is legally prohibited from harassing you or threatening you with violence or harm. They are also required to disclose the amount you owe, the name of the original creditor, and the procedure to follow if you don’t believe that the debt is yours.
Next, get a copy of your credit report. See if the collection IC System is attempting to collect from you relates to a previous obligation from a legitimate creditor. If you can’t find a connected creditor account, and you don’t recall the details of the original balance being collected, move to Step 2 below.
2. Require IC System Prove the Debt is Legitimate
A collection agency can only pursue payment on a legitimate debt. If you have any reason to believe that isn’t the case, you are legally entitled to require IC System to prove the legitimacy of the debt.
That means they will need to provide full disclosure of all details of the debt, including the original creditor as well as dollar amounts and dates.
But before we go any further, there’s an important rule you need to follow: all communication must be in writing.
You can start out with a phone call, but any information agreed to in the call must be confirmed in writing, especially by IC System. The preferred method is by traditional mail. Failing that, you should at least get an email.
You need to be aware that collection agencies are notorious for making promises and representations verbally, then not following through. By insisting on communication in writing, you’ll have a paper trail. That will be absolutely necessary if your dealings with the company get ugly.
Along the same line, you should never make promises on the phone. Collection agencies frequently record conversations. If you make any representations and fail to follow through on them, the agency may be able to assert fraud on your part.
Keep all conversations, whether verbal or in writing, concise, and without promising anything you can’t deliver.
Let’s move on.
3. What to do if the Debt Isn’t Yours
The purpose of making IC System prove the debt is legitimately yours is because you’re not legally required to pay it if it isn’t.
This isn’t an unusual situation, either. Collection agencies often work with debts from hundreds or even thousands of individuals from the same company. There’s a real possibility they got the wrong person associated with the debt.
Still, another factor is the age of the debt. Collection agencies often become involved in debts that are several years old. It’s something of a last-ditch effort on the part of the original creditor to collect something on the debt. But because of the age of the debt, significant details may be lacking. If they are, the agency may not be able to conclusively tie the debt to you.
By forcing them to prove the debt is yours, you’ll create the opportunity that they will be unable to do so. If they can’t, you can request they remove your name from the debt, and correct your credit report with all three credit bureaus — Experian, Equifax, and TransUnion.
In fact, if IC System can’t conclusively prove the debt is your obligation, you can contact the three credit bureaus directly and dispute the debt. The bureaus are legally required to investigate your dispute within 30 days. If the creditor cannot prove the obligation is yours, the credit bureaus must delete it from your report.
4. What to do if the Debt Is Yours
What if you challenge the legitimacy of a collection account, and IC System provides evidence that it’s really yours?
The easiest course would be to pay the debt in full and get on with your life. However, that’s not what I’m recommending.
Remember earlier I said collection agencies often work on commission? Or that collection accounts are often several years old? Both factors can work in your favor.
The collection agency will be as anxious to get money on the account as you are to get it out of your life. Take advantage of that situation by offering to pay less than the full amount.
For example, start by offering to pay 50% of the full balance. If the collection is more than three or four years old, you may want to offer even less.
From there, be prepared to negotiate. The agent may come back at 80%. You counter at 60%. The agent re-counters at 70%. That may not be the 50% you are willing to pay, but it’s still 30% less than the full amount.
If the agent agrees to this arrangement, you’ll need to do the following:
- Have IC System confirm your agreement in writing.
- The letter should state that the agreed-upon payment will be accepted as full satisfaction of the face amount of the debt.
- The letter should also state that the original creditor will be notified, as well as all three credit bureaus, that the account has been paid in full.
- Send no money in payment of the debt until you receive the letter from IC System confirming the details of your agreement.
Having the Collection Account Deleted from Your Credit Report Entirely
This is a strategy often recommended by credit experts. Basically, you get the creditor to agree to delete the collection from your credit report in exchange for payment of the debt.
In theory, this sounds like a win-win proposition. The collection agency gets paid, and the negative entry is deleted from your credit report.
In actual practice, it’s not quite that simple. First, a collection agency is unlikely to cooperate unless you make full payment on the debt. That means no attempt to negotiate paying $.50 on the dollar, or some other reduced amount.
Second — and infinitely more important — even if the collection agency agrees to delete the entry in exchange for payment, there’s no guarantee they’ll follow through.
Strictly speaking, creditors have no legal obligation to honor that type of exchange, even if they agree to it in writing. This is a process sometimes referred to as pay-for-delete, and while it does happen from time to time, it’s actually a violation of the agency’s agreement with the credit bureaus.
If a collection account is legitimately yours, it’s required to remain on your credit report for a full seven years from the time it first went delinquent.
Collection agencies will agree to a pay-for-delete just to get you to pay the full amount of the debt. But since they’re under no legal obligation to follow through with the deletion, it may never happen. If not, you’ll have no legal recourse whatsoever.
5. What to do if IC System won’t Cooperate
It is possible that, despite your best efforts, IC System will not work with you. If that’s the case, and the debt is large and having a major negative impact on your credit score, you may need to get legal assistance.
Though a collection agency may not take you seriously as an individual, their attitude will change dramatically when you get legal representation. Law firms like Lexington Law specialize in credit issues. They may be able to accomplish for you what you can’t do for yourself.
You will pay a fee for legal services. But if the collection amount is large enough, and is having a major negative impact on your credit score, it may be the best money you ever spend.
But before you do, try your best to settle the situation by your own efforts.
Final Thoughts on How to Handle an IC System Debt Collection
If you’re successful in proving that a debt collection from IC System is not legitimately yours, both the financial obligation and the negative entry on your credit report should disappear within 30 days of taking action.
But if the debt is legitimate, it will remain on your credit report for up to seven years. Paying it off should improve your credit score at least a little bit. That’s because a paid collection is always better than an open one. But even if it remains on your credit report, it will carry less weight the older it gets. And it will eventually disappear completely.
If you have multiple collection accounts, either with IC System or with other debt collectors, check out our article, How to Remove Collections From Your Credit Report, for a more comprehensive strategy for dealing with collection accounts.