If you’ve recently received a phone call or a collection letter from a company called Transworld Systems about an outstanding debt payment, don’t ignore it.
This company is one of the best debt recovery agencies in the business. Essentially they are accounts receivable management companies who acquire delinquent accounts in attempts to gain payment for the original creditors.
They are great for original creditors, but not one of the easiest collection agencies for consumers to deal with, especially with robocalls and incessant voicemails.
But if they contact you, you’ll need to deal with them effectively. Let’s jump into a review of Transworld Systems, and how they provide financial services for various companies as well as how you as the consumer can remove them from your credit report.
What is Transworld Systems?
What is Transworld Systems? The company describes itself as a “game-changing accounts receivable and debt collection” organization.
Transworld Systems provides two basic services to their clients, pre-charge-off recovery and post-charge-off collections. That means you may hear from the company at any point in the debt recovery cycle.
With pre-charge-off recovery, the company focuses on early intervention and demand letters for payment. Basically, you owe a company money, and Transworld Systems takes over the accounts receivable process.
The basic purpose is to keep more recent past-due accounts from turning into collections and charge-offs.
Post-charge-off collections are a more familiar role. The account is seriously past due with the original creditor, whether student loans, healthcare or credit card bills, to the point where they give up hope of payment.
Transworld Systems then acts as a collection agent, alerting the credit reporting agencies of your delinquent account and harming your credit score in the process.
Is Transworld Systems Legitimate?
In a word – yes. Transworld Systems has been in business in the United States since 1970, so they’ve been at the collection game for half a century.
Starting in Santa Rosa, California, and moving to Delaware, they’re one of the best in the business at what they do. They combine their experience with advanced technology to locate and pursue debtors. And they also use managed attorney networks to leverage litigation strategies.
Here is a quick list of their most recent contact information:
- Address: PO Box 15630 Wilmington, DE 19850
- Phone Number: 888-899-6650
- Website: www.tsico.com
In short, this is not a company to be taken lightly. They have logged over 5,000 complaints filed with the Federal Trade Commission to the Consumer Financial Protection Bureau (or CFPB) and over 300 with the Better Business Bureau. Putting aside the complaints, the Better Business Bureau even gives them a rating of “A+”, which is the highest rating they offer on a scale ranging from A+ to F.
Does Transworld Systems Report to the Credit Bureaus?
Yes. In fact, they report to all three — Experian, Equifax, and TransUnion. They claim they do this upon request by their clients, but reporting to the bureaus is usually the first strategy employed by debt collection agencies in pursuing debtors.
If you go to the company’s website, they appear as consumer-friendly. On their Consumer Support page, they even say, ”We’re here to help.”
That may sound warm and fuzzy, but remember, the ultimate purpose of any debt collection agency is to get you to pay the debt — whether you legitimately owe it or not. Don’t be taken in by the conciliatory language. They will go back on their word in a New York minute. In the end, the purpose is always to get you to pay.
5 Ways to Remove Transworld Systems from Your Credit Report
You may be wondering, “how can I remove Transworld Systems from my credit report?” I would certainly recommend paying your debt if you legitimately owe it.
But even then, I urge you to settle for less than the full amount owed. The point is, when dealing with collection agencies, make sure you’re doing it on your own terms — not theirs.
Now understand I’m not advocating confrontation, non-cooperation, or non-payment. You should fully understand from the start that while collection agencies can’t make exaggerated threats, there are situations where they can make your life miserable.
A simple collection — especially a large one (several thousand dollars) — could turn into a court judgment at the discretion of the collection agency.
In most cases, you won’t even become aware of the judgment until well after the fact. And once an agency secures a judgment, they can pursue wage garnishment or your bank account.
What’s worse is that judgment will remove any flexibility from the terms. You’ll then be required to make full payment on the debt asserted by the collection agency — plus legal fees.
One of your goals in dealing with Transworld Systems must necessarily be to avoid your collection turning into a judgment. That’s unlikely with a debt of only a few hundred dollars, but it’s not a chance worth taking.
If you are contacted by Transworld Systems, you’ll need to deal with them head-on. And here are five ways to do it.
1. Know Your Rights Under the Law
If you’ve never heard of it, you need to familiarize yourself with the Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA). You can learn the ins and outs of it here on the Consumer Finance Protection Bureau’s website at https://www.consumerfinance.gov/ask-cfpb/are-there-laws-that-limit-what-debt-collectors-can-say-or-do-en-329/.
As a consumer, you have certain protections against creditors and collection agencies that are spelled out in that law. The better you know and can recite the provisions of the law, the stronger you’ll make your case.
Whether your first contact with Transworld Systems is by phone, email, or a written letter, you should make it clear that you’re familiar with the law and your rights, starting with debt validation.
That will send a clear message that you can’t be intimidated either by garnish threats or harassing phone calls. You’ll need that because collection agencies specialize in intimidation.
2. Start with a Debt Verification Request
Get a copy of your credit report, and the collection from Transworld Systems matches any previous unpaid obligations listed. If you don’t see any, it’s possible the debt is in error.
The next step will be to request a debt verification letter along with any other pertinent information like your account number from Transworld Systems. They are required to furnish you with the name of the original creditor, the amount owed to that creditor, and the relevant dates of the obligation, in addition to any other relevant information.
If they’re unable to furnish those details, they’re legally required to delete the debt from your credit report with all three credit bureaus.
If they can’t come up with the information, but fail to acknowledge that fact, you can then dispute the debt with all three credit bureaus. They are required to investigate the debt and make a determination within 30 days.
If Transworld Systems can’t prove the debt is yours, the credit bureaus are required to delete it from your credit report.
If an Agreement Isn’t in Writing, it Doesn’t Exist!
This is a good time to remind you that any communication with Transworld Systems needs to be in writing. Paper letters are preferred, with email as a second choice.
Phone conversations are not your friend when it comes to dealing with collection agencies. First, collection agencies are notorious for making verbal agreements to get you to send money, then disregarding them later. Second, phone conversations with a collection agency are typically recorded.
Anything you say can be held against you, especially any promises or implications you make acknowledging the debt to be yours or offering to make payments.
Written correspondence is also central to maintaining the all-important paper trail. For example, if you pay your debt and Transworld Systems fails to report the paid status to the credit bureaus, you’ll have your written correspondence from the company to send to the three credit bureaus.
Getting all agreements in writing is Rule #1 in dealing with creditors and collection agencies. There is no alternative.
3. Your Strategy if the Debt Isn’t Yours
If your request for debt verification shows the debt is not legitimately yours, Transworld Systems should update all three credit bureaus. Make sure you get that in writing from them.
If they can’t prove the debt is yours, they get 30 days to remove it from your credit reports. You’ll need to check your credit at that time to make sure it’s been removed.
If it hasn’t, you can contact Transworld Systems and remind them of their legal obligation to delete the information from your credit report. But if they don’t, contact the three credit bureaus and dispute the debt with them.
You simply need to contact each of the three bureaus to open a dispute. They’ll be required to contact Transworld Systems within 30 days of your dispute request. If Transworld Systems can’t substantiate the obligation, the credit bureaus are legally required to delete it from your reports.
4. Your Strategy if the Debt Is Yours
If Transworld Systems is able to verify that the debt is, in fact, yours, you’ll have no choice but to settle. But that doesn’t mean you have to pay the full amount. Because collection accounts are often several years old, and because collection agencies only get paid when you make a payment, they’ll often settle for less than the full amount owed.
Start by offering 50% or less. If the debt is $1,000, offer $300. They’ll likely counter at a higher amount, and you then negotiate a compromise. You may settle at $600, but that will save you $400 from having to pay the full amount.
You can negotiate the settlement verbally. But if you come to an agreement, you must insist they confirm that agreement in writing before sending a payment. They must also agree to update the information with the credit bureaus to reflect a paid status.
Critical point: If you send payment without receiving a written confirmation of your agreement, the collection agency will accept your funds but continue to insist you pay the balance of the debt.
The moral of the story is that collection agencies don’t play fair.
There’s one other point that needs to be made. Even if you pay off a collection account, it will remain on your credit report for a full seven years from the date the account first became delinquent. But it will show a paid status, which will help your credit score a bit and look a lot better than an unpaid collection.
Should You Attempt a “Pay-for-Delete” Arrangement?
Pay-for-delete is a strategy frequently recommended by credit repair agencies. But you should be aware up front that it’s more of a “handshake agreement”, and not at all legally binding.
The basic strategy is to offer to make a payment on the debt in exchange for having the entry removed from your credit report.
Doesn’t that sound like a perfect arrangement for both parties?
It would be, except it may not work. Even if you take all the proper steps, like getting the collection agency to agree to the deletion in writing, they could take your money and leave the negative credit information exactly where it is. That’s because they’re under no legal obligation to delete negative credit information, even if the obligation is fully paid.
Even if the agency agrees to the deletion verbally or in writing, they may accept your money in full payment of the debt and not delete the negative entry on your credit report. You’ll have no legal basis to challenge that either. That’s because creditors and collection agencies are required to report negative information to the credit bureaus. Technically speaking, deleting negative information upon receipt of payment isn’t legal, which will leave you with no legal recourse if they don’t.
You can certainly request a pay-for-delete arrangement, and it will be to your advantage if it actually happens. But don’t be surprised if it doesn’t.
5. If All Else Fails, Get Legal Representation
If the amount of the collection is high enough that you can’t afford to pay it and Transworld Systems is threatening you with legal action, you’ll need to respond by hiring your own attorney.
It can’t be just any attorney. It must be one that specializes in credit. Not only will they know exactly how to deal with collection agencies like Transworld Systems, but they know consumer credit law inside and out.
And as a law firm, the phone calls and correspondence they have with Transworld Systems will carry a lot more weight than those from you.
We frequently recommend Lexington Law. They’re one of the best credit law firms in the country, and they may be able to resolve your situation with Transworld Systems much more quickly and effectively than you can.
But obviously, bringing an attorney into the picture will cost you money. With that in mind, make sure the benefit you’ll receive justifies the cost.
If Transworld Systems contacts you, that should set off a call-to-action on your part. Use each of the strategies in this article, and you at least will minimize the damage.
Start by pursuing a debt verification from Transworld Systems and make them prove the debt is legitimately yours. If it isn’t, demand in writing that they remove it from your credit report. If they don’t cooperate, directly contact the three major credit bureaus yourself.
If you legitimately owe the debt, start by offering a much lower amount to settle the account. Make sure that any payment you make is preceded by a letter from Transworld Systems spelling out the terms of the settlement. That letter will be your proof if you need to go to the credit bureaus or even an attorney.
And finally, if Transworld Systems refuses to cooperate, carefully consider bringing in an attorney.
If you have multiple collection accounts, either with Transworld Systems 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.