Over the years, there have been many controversies about debt collection practices in the U.S. Midland Credit Management (MCM). MCM is one of the largest collection agencies in the country and has seen its fair share of headlines. Like other debt collectors, MCM came under fire for helping consumers remove debts from their credit reports using a strategy called Pay for Delete.
Many argue that Pay for Delete agreements harm consumers and could affect the reputation of the U.S. credit-reporting system. It might also be a good idea to discuss this option with advisors specializing in credit repair in Atlanta, Georgia, such as The Phenix Group, well before deciding to go this route.
About MCM
MCM is a debt collection agency that buys delinquent debts from banks, credit unions, consumer finance companies, commercial retailers, auto finance companies, and telecommunication companies for pennies on the dollar. It then, in turn, negotiates repayment plans with debtors.
MCM’s Pay for Delete Policy
According to MCM’s website, if the agency has started credit reporting and an account is paid in full or is paid in accordance with a settlement agreement, it will request that the debt owed to MCM is deleted.
That said, MCM has no control over how long it will take for credit reporting agencies to remove the debt from their reports. The company states that these deletions typically take about forty-five days to be processed.
This agency advises consumers to make payments within six months of receiving the first collection notice to avoid being reported. Furthermore, MCM notes that it doesn’t report accounts that make regular payments each month.
MCM’s website does not explicitly say if the company accepts Pay for Delete proposals. Yet, numerous online reports argue that the platform does, and most collection agencies allow Pay for Delete to encourage consumers to repay their debts. Learning about credit versus debt will also give you a clearer understanding of how this works.
Many creditors like MCM have capitalized on this tactic to incentivize consumers to pay their debts. At the same time, there are many who have criticized this arrangement. Some consumer rights advocates believe that these collection agencies are preying on the ignorance of vulnerable consumers who do not know their rights.
Some critics also believe that Pay for Delete practices spoil the image of the credit reporting system by allowing individuals to “buy” credit scores. Creditors like MCM counter-argue that they are offering a transparent and legitimate way for consumers to clear their debts and improve their credit scores.
Controversy Over Pay for Delete Policies
There are several controversies surrounding the Pay for Delete practice. One major argument is that it violates Fair Credit Reporting Act (FCRA) policies, and many believe removing debt in exchange for payment is illegal. If debts are erased by using a Pay for Delete policy, it could falsely represent a consumer’s financial health, allowing them to get loans they may not qualify for or be able to pay back.
In addition, others believe that the Pay for Delete policy may coerce consumers into paying bills or debts that they might not be obligated to pay. Some debt collectors even purposely leave debts on consumer credit reports so they can use the Pay for Delete bargaining chip to collect money they might not be entitled to.
The FCRA Policy
According to FCRA guidelines, credit reporting agencies (including MCM) must report complete and accurate credit information. The guidelines prohibit them from making alterations or removing accurate information from a client’s credit report.
As a result, an attempt to remove defaulted debts that were settled using a Pay for Delete agreement could violate the FCRA’s policy. While FCRA does not specifically ban Pay for Delete policies, it is illegal in some states that consider the practice unfair and deceptive.
Taking a Pay for Delete Deal
Midland Credit Management does allow Pay for Delete settlements, but such deals are not always successful–and can leave the consumer in even more debt than they had in the beginning.
Rather than use the Pay for Delete option, consumers can negotiate with creditors for a reduced payment schedule or a plan that allows them to pay their debt. Consumers can only dispute cases with the relevant collection agency if they have accurate or correct debt data on their reports.
In a Nutshell
MCM’s Pay for Delete practices are controversial. Although the platform’s policy allows consumers to enter into these arrangements and increase their credit scores, it has some drawbacks—including possibly violating FCRA policies and harming the U.S. credit reporting system.
These are factors that consumers must consider when evaluating the authenticity of MCM’s Pay for Delete policy. Consumers should know there are alternative ways to manage debts before paying under delete deals. The Phenix Group can help you and your business better navigate the various types of possible payment plans to improve your financial situation.