Consumer complaint received 2021-07-20
Company: ALLY FINANCIAL INC.
State: CA
Product: Debt collection
Sub-product: Medical debt
Issue: Written notification about debt
Sub-issue: Didn't receive enough information to verify debt

Complaint:
In XXXX of XXXX I applied for a medical loan from HCS Corp ( www.hcsloans.com ) on behalf of my youngest brother. The current balance on the loan is {$1600.00}. The HCS website states that they have been acquired by Ally Lending. 

We have been consistently paying the required minimum payment ( {$170.00} ), on time, for the last several years and have not had any missed payments for years. Recently, however, there was an issue with the auto-payment method. As a result, the last payment recorded was on XX/XX/XXXX. 

However, we were not contacted by phone or email to alert us that there was any pending problem with the status of the account. When I went through the monthly statement yesterday, it showed a past due balance of {$680.00}. The statement also said that I have until XX/XX/XXXX to make a payment in that amount, plus the regular payment of {$170.00} ( for a total of {$850.00} ) to bring my account current. 

I immediately proceeded to attempt logging into the website to make the payment necessary to bring it back to current status, per the current statement, but my login credentials are coming back as invalid. I attempted to reset the password but never received anything in my email for login assistance. 

I then attempted to contact HCS Corp / Ally Lending directly by phone. I spoke to the customer service agent about getting help accessing their online payment portal. They said they were transferring me to another department that could help me. 

Much to my surprise, I had instead been transferred to a collection agency who calls themselves XXXX XXXX. The representative at XXXX XXXX declared to me that they were a credit collection agency attempting to collect on a debt. I was shocked and asked for details. The gentleman named XXXX went over the loan details as follows : The original loan was for $ XXXX and was taken out XX/XX/XXXX. 
The last payment received from us was XX/XX/XXXX. 
The account was placed into collection status on XX/XX/XXXX XXXX 17 days ago ). 

Even though I didnt agree with how my account was being handled, I wanted to remedy it so we could become current on the loan, and as such, ( having forgotten the fact that the letter states that I have two days to resolve it directly with the original lender - HCS/Ally ), I spoke with a representative named XXXX. We negotiated the option to settle the entire debt for {$1000.00}. XXXX said he would ask for approval on the settlement. At this point, the call terminated abruptly. 

I called back ( HCS/Ally lending ) immediately, using the same number, having also realized that I still needed to address the potential effects on my credit report. I was once again transferred to the same credit collections agency, who again referred to themselves as XXXX XXXX ( though they said they are in the process of merging with an agency named XXXX XXXX, and spoke to a wonderful gentleman named XXXX who stated that he is a supervisor there. 

After pleading my case, once again, to XXXX about the potential negative effects on my credit report ; he said that the account wasnt actually part of their portfolio, that their system shows the account is legally still owned by HCS Credit Services and that they are just a third party collections agency hired to help collect the debt on behalf of HCS, but they ( XXXX XXXX ), dont actually have the authority to report to the credit reporting agencies. 

However, he stated that HCS does have such authority, so he suggested making the payment to his agency and then contacting HCS Credit Services directly about negotiating what would be reported to my credit report. I was stunned that he was asking for payment and telling me that I would STILL have to negotiate with the original party! 

The conversation went as follows : Activate Financial REP : They are the current creditors on your account. Once the settlement has been satisfied ; we would send that information to them and they will be the ones that report it to the credit bureau or credit reporting agencies. One that payment has been made ; well be sending you a settled in full letter, 30-45 calendar days after the payment has been made. My recommendation would be for you to contact them once you have that receipt so they can come into an agreement with you. I dont know if they have the option to delete ME : Wait, so you guys dont have the ability to, you dont report to my credit score, only they do? 

XXXX XXXX REP : Yes that is correct ME : Oh, so if I pay you guys off, it might not even show up as paid off on my credit score? 

XXXX XXXX  REP : Well, It is a possibility. The ones that actually would report would be them. For instance on our accounts they are only reported as charged off XXXX balance thats the only way we report them, it's not even reported as paid in full settlement so it would depend on HCS reporting. 

So, basically, I am being told that my account is past due and has been sent to collections, but the information that I am receiving is conflicting with the statement I received and the companies involved are also in conflict in what they are saying to me. 

Additionally, I have not received any correspondence about the collection, nor have I been given the information on how to dispute the debt. 

I would like to resolve this immediately, prior to taking any possible legal action as my next step, and have been attempting to do so. 

Side notes : the HCS website says HCS is becoming Ally Lending at the top, yet says XXXX XXXX XXXX XXXX XXXX XXXX XXXX - XXXX at the bottom. 

Also, the representative at Ally Lending says they do not work with any agency called XXXX XXXX even though I was directly transferred to XXXX  by the HCS representative twice. 

Ally Lending says the only collection agencies they work with are either XXXX XXXX or XXXX XXXX. 

XXXX XXXX says in their phone intro : Thank you for calling XXXX XXXX. Recently XXXX  XXXX XXXX parent company acquired XXXX XXXX XXXX XXXX which is the same company name listed at the bottom of HCSs website as mentioned above. 

Thank you for your prompt consideration.

Company public response: Company has responded to the consumer and the CFPB and chooses not to provide a public response
Company response to consumer: Closed with explanation