when you make a settlement with a collection agency do they pay the creditor before the debitor pays the agenc

Question

I made a settlement with a collection agency to pay a freinds debt for 1500. Even before the agency receives money from me do the pay the creditor (in my friends case which would be citibank mastercar) first before they receive any money from me/ the debitor (my friend). according to my friends credit card statement his debt was paid but i didnt pay anything to the colelction agency yet...what is going on ....did the agency pay the debt and we are responsible for paying back the agency or did the agency or someone else make a mistake? Please help. Thank you.

Answer 1

Normally the original creditor charges off delinquent accounts as bad debt. Then sells off groups of bad debt to collection agencies 15 -20 cents on the dollar. The collection agency then tries to collect as much as they can and sells off the uncollected debt to another collection agencies on down the food chain for even less on the dollar, and so on and so on.

In you case, if your friend was still get statements from this credit card, it was not a charged off account. If the statement showed the account paid in full, don't pay anything to that collection agency.

You might want ask that collection agency to validate that they own that debt or have the authority to collect it. You could be the victim of a scam.

Answer 2

read creditinfocenter com and why would you pay someone elses debt off? If his statement showed paid in full
then sue the Collection Agency and don't be dumb
and pay off someone else's debt in the future