Complaint Review: Merchants Credit Guide

Wow, I never thought I'd be spending my holiday weekend (July 4th just around the corner) writing a rip-off report. But, I really got angry when an elderly relative (we'll call him "Uncle Jim") got a letter recently from Merchants' Credit Guide Co stating that several thousand dollars was owed to their client--the LVNV Funding LLC. The letter proceeded to outline three ways that the debt could be paid off and was signed by Ken Hughes. Of course, these things should never be ignored, but WATCH OUT--do not respond without knowing some of your rights. This company has a terrible reputation for its debt collection practices.


Of course this site, Ripoff Report, was valuable in giving information about how to deal with this. But I also did some research (I'm an academic research librarian) and would like to relay the following ideas and the letter that was sent back to Merchants Credit.


Where Can I Go For More Information:

1. Use this website and read how people responded.

2. Go to the Federal Trade Commission Web Site (ftc.gov) In the top search box, type: the fair debt collection practices act
When you get results, go to second listing
entitled "Fair Debt Collection"--this is a very good overview of your rights and what a collection agency can and cannot do.

3. Go to privacyrights.org
This is a nonprofit information and advocacy group. Click on "search our site" near top of page and type: debt collection
They have a very good overview of what is involved and forms you can model or use to send to a collection agency.


4. Go to budhibbs.com website. Mr. Hibbs bills himself as "America's Consumer Credit Expert"--so there is obvious self promotion and I tend to be cautious with sites like this. Still, at his site, click along the top "Agencies to Avoid" and you'll find his dealings with Merchants Credit Guide.

5. Go to google and do a general search. Put the company name in quotes (to find it as a phrase) and use different spellings--because when people write about this company on the web they use many different variant spellings. For example "Merchants Credit Guide" "Merchant's Credit Guide" or "Merchants' Credit Guide" As all of you know, the results can be a minefield--so proceed at your own risk and realize that many chat rooms and websites have notoriously inaccurate information.


How My Husband and I Responded to Merchants Letter:

The FDCPA (Fair Debt Collection Practices Act) requires that within 5 days of initial contact the collection agency must provide the consumer, in writing:

1. The amount of the debt

2. The name of the creditor to whom the debt is owed (and this is so cute the way that Merchants represents its own related agencies--such as CFB Financial III LLC,
making you think that more than one agency is coming after you!!!)More on this at bottom of page.

3. A statement that says unless a consumer disputes the debt within 30 days of receipt of the collection agency letter, the debt will be assumed to be valid by the debt collector. (Note: do not ignore this or, according to some sites I've seen, they could
mess with your credit reports or begin legal proceedings.)

4. A statement that if the consumer notifies the collection agency within 30 days of dispute of the debt or portions of it, the consumer will be provided with VERIFICATION of the debt or a copy of any judgement (legal) against the consumer. This is required to be in writing to consumer.
(Note: Always send everything in writing by certified mail with return receipt requested.
You need to keep a paper trail of what happens.)

5. A statement that "upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor." (all 5 steps paraphrased or copied from the FDCPA
ftc.gov/os/statutes/fdcpa/fdcpact.htm


Surprisingly, the letter from Merchants had all 5 of these required elements in it! My husband and I crafted a letter (based on the form we found in the websites above) that was all business and to the point. My husband has "power of attorney" for Uncle Jim. We DISPUTED the claim for two reasons:


a. Uncle Jim's name was not spelled properly--the agency probably had him confused with another Jim. (I have since read that a collection agency will send out the same letter to anyone with similar names, in the hopes that they find the name they're looking for!)

b. There was no record or claim ever of that amount that had been incurred by Uncle Jim.

We asked for VERIFICATION of the debt with all pertinent documents being sent or verification of any legal judgement against Uncle Jim. We asked that there be no contact with Uncle Jim by phone while this was in dispute (this is your legal right!). We also stated that any reporting to any credit agency was not warranted since this was an invalid claim and in dispute.


We stated that copies of this letter and its resolution would be sent to the Federal Trade Commission (ftc.gov click on "File a Complaint") and the State Attorney Generals for relevant reporting: the State of Illinois (Merchants homebase) and Florida (where Uncle Jim lives). These guys have to be reported! We asked that all future correspondence be in writing to my husband.


We'll certainly let all of you know how this turns out.


More About Merchants Credit Guide Co.

1. Check the Illinois Secretary of State website. They have a corporation/llc search box where you can get basic background information on the firm.
Here is what I found:

Merchants Credit Guide Company
A "goodstanding" corporation in the state of Illinois, incorporated on 6/28/1899
President: Daniel F. Burtis
Secretary: Edwin S. Burtis
Date present report filed: 5/25/2006
Inactive names of company: Creditors account service
Other active names: Merchants Guide Company
Address: 223 W Jackson Blvd. Ste 900, Chicago, IL 60606


CFB Financial III LLC
Goodstanding on 8/18/2005
Same address as above (My note: isn't that curious that Barry Siegal was filing agent for both and the record office for both agencies is the exact same suite and street address!!) I also found that similiar names of CFB, such as CFB Financial LLC; CFB Financial IV, LLC, CFB Financial III LLC were all registered to the same 223 W. Jackson address--the same as Merchants. So when you get a Merchants letter saying that it represents a certain client--it could be representing itself or a close advisory firm. What a bit of trickery that should be ended!)


2. I also pulled out all the stops and searched every business database available to me (I have access to many big databases at my library.) Here is what I found, after searching reputable, credible databases (big collections of journals, magazines, newspapers to which a library usually subscribes for a fee):


Merchants Credit Guide
Phone: 312-360-3000
Fax: 312-360-3024
Toll free number: 800-835-0529
Corporate website: mcgdps.com

It rents a big office at 223 W. Jackson Blvd, Suite 900, in Chicago, Illinois.
It is a private company, established in 1896 and uses Chase Bank. It has approximately 180 employees and makes about $5 to $8 million dollars a year in sales--depending on the sources.
President: Daniel F. Burtis
Managing Director: Russ Fett
Treasurer, Corporate Secretary: Edwin B. Burtis
This has an SIC code of 73229902, with primary line of business: collection agency.

CFB Financial II LLC
Same address as above
Phone: 312-416-0771
Private company with 2 employees. Investment Advice Company. Sales of approximately $130,000
Manager: Michael Fromknecht

In addition I found an article which discussed how Merchants along with other collection agencies and bidders sought to buy $35 million dollars in credit card loan chargeoffs from Bank of America (San Francisco) in 1989. (Note: This certainly gives credibility to the many posts on this site that says that collection agencies buy these loans for a reduced price in the hopes of getting some returns when they try to collect. However, be aware, Statutes of Limitations (SOL) can apply to credit card loans and other types of loans in many states.)

"Bringing the Gavel Down on Credit Card Debt:
James Daly, Credit Card Management. New York: Oct 1989. Vol 2, Issue 7, pg 32.

I hope this helps all of us. Now lets get ready for July 4th fireworks and light some under Merchants Credit Guide!

Ann
kansas city, Kansas
U.S.A.