In the summer of 2007, I signed a contract with a collection agency in an attempt to recover money owed to me by former tenants for rent, late fees, utilities, etc. Between four accounts, the total was just over $10,000. Three of the accounts gave the agency a 33% commission; the fourth account gave the agency a 50% commission because I had already sued the tenant and won a partial judgment against her, but she was not disclosing any bank accounts.

As of today's date, the collection agency has collected absolutely nothing. They are now calling me, demanding that I send them $12.50 for a payment I received and reported in 2007. When I asked why they hadn't located any bank accounts for the tenant I obtained a judgment against, they stated that a)the bank account had to have at least $1,000 in it before any money could be withdrawn - if the account has $1,001 and they file against it, I will only get $1.00, and b)they are only able to withdraw from the bank account a single time. When I asked her for the state statute to back this up, she responded, "I'm not an attorney." What really gets me angry is that when I called about setting up an account with them, she stated specifically that they would locate employers and bank accounts so that they could garnish whatever they could.

I pointed out to her now with interest, I've given them over $11,000 to collect on and nothing has been done - $12.50 against $11,000 really isn't comparable.

Needless to say, I am beyond frustrated with these people. Two years and not even a dime? Seems a bit ridiculous to me. I signed the contract because I didn't know how to find bank accounts and had no money of my own to pay the $85 for a small claims suit against each of the parties. Is there a way to get myself out of this? Can I break the contract on the grounds that the agency isn't acting in an effective matter and led me to believe that this would be dealt with efficiently?

Can I break the contract on the grounds that the agency isn't acting in an effective matter and led me to believe that this would be dealt with efficiently?Hello this:

In a word, yes. Or, maybe. I don't know, actually.

However, if you were answering this question, you'd tell the OP that any recourse they have is IN the contract... Given that you KNOW that's the advice you'd receive, I suspect you have combed your contract for outs...

If you haven't found any blatant ones, the ones you're going to have to cite are the not so blatant ones. If you can't find an end date, or a, by when date that the contract must be completed, then it appears that it's open ended... That's not legal.

Plus, there MUST be provisions wherein they obligate themselves to produce something - not just to ATTEMPT to produce something... If you can't find that, then I suggest the contract is illegal...

Look, it's not so much whether you can "legally" break your contract. It's a matter of whether they'll come after you for doing so... Therefore, I'd recommend that you break your contract by citing the above, and ending your relationship forthwith. Send your cancellation by certified mail.

Now, they MIGHT still try to collect from you. After all, that's what these scumbags do. But, I don't think they'll sue you over a contract they haven't performed upon.

excon

PS> Hire a private detective next time.

You are bound by the contract UNLESS/UNTIL one of the parties - you or them - breaks the contract. By collecting nothing, by explaining nothing or giving wrong info, have they broken the contract? I'm not sure.

What is the term of the contract? Is it good for as long as it takes to collect the money (100 years, give or take, at this rate) or for a certain time?

If they aren't collecting anything, haven't put any time into your account, maybe they will just let you break contract and walk.

Thanks for all your input.

What's so frustrating is that I have no idea what they've actually "invested" in my accounts at this point. They claim they've made phone calls and sent mail, but the addresses they have for the debtors are incorrect. She told me today that the address for one account was my current address; I said, "No, he was a tenant here and he moved out, which is why I turned him over to you for back rent." Her response was, "Oh... well, he must have told us that he moved back there so that's why we have his address as that."

I'll have to see if I have the contract. If not, I'll have to demand that they send me a copy. Honestly, I feel really sheepish about this whole thing. I've been pretty smart about the rest of my credit and I don't have any idea why I signed this contract. I guess at the time, I felt it was my only option and that they'd have better resources than I would to locate and collect from these deadbeats.

Now I feel like they're just as big of deadbeats as the people who skipped out on their rent. On one hand, I'm afraid to break the contract because I think that they might sue me for the remainder or put it on my credit report without properly informing me first.