I worked for a collection agency years ago. The agency will buy your debt from the credit card company and charge the fees they wish. If you decide to do a settlement in full (less than the $400.00) make sure you request the settlement in full offer letter that clearly states the agreement between you and the collection agency. You will be given a time frame in which to pay. After that date, another agent can change the price.
Pay via check, money order, credit card by Mail. Some agencies will continue to debit your checking account and credit card from your payment by phone. It will then be PURE HELL for you trying to get your money back!!! The collectors have your money and you are no longer needed. They will not, nor will they be allowed to constantly dig to find out why your account keeps getting charged.
If you pay less than is owed, it will be clearly stated as such on YOUR credit report. Sometimes this is viewed negatively by creditors. Regardless of your decision, MAKE SURE YOU GET THE COLLECTION AGENCY TO send you receipt that it was paid. Without this, you will be sent to another agency that will add more fees. This will more than likely happen anyway as the debts are constantly sold to other agencies.
As a former collector, I will give you this advice...Stay on top of this, 1-6 years later, it will probably show up again. Keep all paperwork, no proof showing it was paid, means they will pursue. You can send CERTIFIED proof also. Also send a certified letter stating the debt has been paid and you wish to have no further calls. Certified mail means your mail was accepted by a person at the address. Keep that receipt also. You can also tell them the date it was sent and if you continue to receive calls, you can pursue it legallly.
