Is the collections agency lying to us?

We had perfect credit until a medical bill was rejected by our insurance company (unbeknown to us) and went into collections. The lab we originally owed the money to and the collections agency both had an address for me that I haven't lived at for almost 10 years! We found out about it on accident and the insurance said they'd pay, then didn't. So we paid it ourselves, in full.

We are now trying to refinance and have this account that went into collections on our credit report screwing everything up. At first the collections agency was rude and unhelpful. But my husband just called back and got a woman that said they would "put a bulls eye on the charge which works very fast and it should be off of our credit report by next week" They said since we are refinancing and it went to a very wrong address, they would take it off for us.

My husband (ever the optimist) didn't get or ask for anything in writing, but really wants to believe them. I say they are lying through their teeth and must be laughing at us, because no way it can be that easy. Have you ever heard of this?

Believing there words means nothing when it comes to the bottom line, that is, will it actually be removed.

The comment about Bulls eyeing the hit on your report is within the collection agency's control. I would suggest your husband stay in constant contact w/ the agency. Make sure the agency faxes, emails and/or mails you a letter as proof of payment. Speak only with one person at the agency, get all info about that person they will give you (first last nale, rep#, etc...). IMO experience collection agents do not want to be aholes, but they kind of have to be because they do get a lot of BS lines from deadbeats. So, if you talk straight with them they change their tone and talk straight w/ you.

You can make this situation much better than you fear it won't be.

Have the original creditor (hospital) and collection agency both write letters stating when the bill was issued and where the bill was mailed to. Additionally have the collection agency write a letter stating the account is paid in full. Once you have the letters - have your mortgage company do what is called a rapid re-score. This is where they take the information and correct your credit report.

Banks do not like outstanding collections when financing a house. They usually make you pay them at closing. Do you have proof that you paid this the first time around. The bank will usually accept this. You could also use this to dispute the debt with the agencies reporting it. Leave the collection agency out of the picture.

If you don't have proof that you already paid the debt then get ready to pay it again.

Without something in writing, the majority of the time, agencies will deny (lie) if it will hurt them financially.
Making money is why they exist and how to make it does not fall into categories such as honesty and integrity. I say don't trust them

I've never heard of a collections agency that wasn't lying.

You can tell a collection agency is lying by listening for any words they are saying. If there is anything other that total silence, they are lying. They aren't putting a "bulls-eye" on the debt, they are putting a "bull-$hit" mark on the debt.

Since you paid the debt, THEY have to prove that the debt is still owed. If you have documentation that you've paid the debt, see if the lender will accept your proof of payment (mine did).

I believe that the debt is time barred for collection. It is probably beyond the statute of limitations in your state for legal action. They know it, but won't tell you that. If they get you to agree to make a payment, or if you do make a payment, that resets the SOL clock and they can take you to court for a judgment even if you did pay the note.

1. You should tell them that all communications must be in WRITING. No verbal communications will be acceptable.
2. Request, in writing, a verification of the debt.
3. I hope you have some kind of receipt for the payment (probably don't as even I wouldn't keep paperwork that long).
4. You may be able to get verification of the payoff from the medical provider.

Oh, yes, they are lying to you. And the worse thing you could possibly have done was tell them that you are trying to refinance. Now they will hold your credit hostage till you pay them again.

At this point, you will not be able to get that derogatory item removed from your credit report. However, it should show as being paid. Send a dispute to the credit bureau along with your proof of payment, asking that the account be updated. It will still take up to 45 days for a response.

You should be able to continue your refinance by showing the lender your proof of payment.