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  1. #1
    Join Date
    Nov 2008
    Posts
    1

    Default Advice on a Possible Check Fraud Collection

    My question involves collection proceedings in the State of: California.

    A couple of years ago I needed to purchase auto insurance for my fiance and we went through Cost-U-Less insurance. I've used them in the past before and had no problems. This next time, they informed me of the deposit fee which needed to be made in 2 installments so I made the first payment at their office and gave them a post-dated check for the last payment which was under $240.00. The rep who went over my paperwork had me sign all the documents, briefly explaining to me what each was and so on. A couple of days later, we decided to cancel the insurance because my fiance learned that his mother was able to put him back under her insurance.

    I then notified Cost-U-Less insurance that I wanted to cancel and placed a stop payment on the post dated check. Now I learn that a collection is out on me for this check. The collection agency is threatening to report me to the credit bureaus, garnish my wages (which by the way I don't work), and report me to the Board of Education because I told them that I'm unemployed and starting school. I don't think I should pay the money because I cancelled the insurance and already paid them part of the deposit. They didn't inform me that it was a broker fee at the time of signing and that regardless if I cancel I still needed to pay the full deposit. Can the collection agency take me to court and if so, does this fall under a check fraud case? What should I do?

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Advice on a Possible Check Fraud Collection

    Is this a case of, "I was handed a contract that described a non-refundable broker's fee, didn't read the contract, and now want my money back?"

  3. #3
    Join Date
    Oct 2008
    Posts
    5

    Default Re: Advice on a Possible Check Fraud Collection

    First and foremost, this does not sound like a fraud case at all. It sounds like they're trying to collect on the deposit/broker fee. If you signed a contract that says you have to pay the deposit/ broker fee even if you cancel the insurance, then you have to pay it.

    The collection agency can sue you if they practice law or they can sell your debt to a law firm that can sue you. If you dont work they cannot garnish your wages nor can they garnish the wages of your spouse, but if you're sued they sure as hell can do a lot of other things i.e. attach your bank accts, put a lien on your home, summons you to court, etc. Save your fiance and yourself the headache and pay the debt.

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