Should you pay Firstsource Advantage LLC instead of your creditor?

Should you pay Firstsource Advantage LLC instead of your creditor?

I have a credit card with Bank of America that has been charged off since 2011. I was making payments of $20 a month up until last August. When I began to check my credit, I noticed no payments were being recorded. When I asked BOA to send me a statement of where my money was going, I got no response.

I stopped payments in hopes they would contact me and I could get a current statement. This never happened. Now I am getting calls from Firstsource Advantage LLC. They have stated they work with BOA for collection purposes. I asked for a statement from them, which they could not give me. They asked what I could pay them, I told them I could pay 20 a month. They agreed, but I must send it to them, not BOA, as they can not give me credit for payments paid directly to the bank.

Do I have to pay Firstsource Advantage LLC?

—Frances A

When Bank of America sends an account out to a debt collector, like Firstsource Advantage, they are doing that as part of an agreement. A collection agreement like this will often mean Firstsource will try to get you to pay all of the balance owed; be willing to negotiate a settlement for less than what you owe; and as is the case with you, set up a monthly payment.

Firstsource Advantage, working to collect in a situation like yours, often only gets paid when they get you to pay. And their agreement with BofA typically means you cannot call the bank to set up payments. If you do, it is normal to be referred back to Firstsource in order for you to set up the payments or resolve your account.

If you can afford to, you should look to resolve your debt with this debt collection agency.

Firstsource Advantage collects debt for many different companies.

settlement

Firstsource collects on all types of unpaid bills, including credit cards, medical debts, and student loans. They work with many different banks, and I regularly see them working BofA accounts.

While you quickly established that your bank sent your charged off account to Firstsource for collection, I am left wondering if they are trying to collect the correct amount from you, and also if paying $20.00 a month is an exercise in futility.

Given your comment about not seeing payments being applied to your account when viewing your credit reports, I would want to make sure that my payments for all those months were being credited.

How much was owed on your account when you stopped paying your credit card?

How much was owed at charge off in 2011?

How much is Firstsource trying to collect now?

If you cannot square all of your payments with what they assert you owe today, it could be that default interest has continued to be applied to your account. Depending on your balance at the time you fell behind the 20 dollar payments may not have been enough to put a dent in the principal.

I would want to make sure the balance owed represents an accurate accounting of all those good faith payments you made to Bank of America.

I would then make sure that any monthly payment you make to a collection agency is being applied to the principal balance, and not just getting soaked up by interest.

Negotiating settlements when your account is in collection.

Now that your account is charged off, and all of the credit damage is done, you can often improve your situation more by settling with First Source, than by agreeing to small monthly payments. You will of course need to be able to pull the money together to pay any deal that is negotiated, but here are some motivators to do just that.

  1. You can often settle unpaid credit card bills for half or less than the balance owed.
  2. Once settled, your credit is updated to show a zero balance and resolved collection. Monthly payments will often delay your ability to improve your credit credit situation.

Negotiating settlements brings finality. The account is resolved and you do not have to be concerned about BofA pulling your account from Firstsource Advantage and placing it with another debt collector. That means you remove any risk of having to deal with a less flexible collection agency, and will remove any fear of being sued for collection. I realize Firstsource is accepting of your $20.00 monthly payments, but you cannot expect that will always remain the case. I have seen too many instances where small monthly payments are not enough to retain the account long term, or where banks pull accounts and reassign them inexplicably.

There is something to be said for getting a deal done and put behind you, even when it makes things tighter for a time.

I do realize that sometimes there is just no other reasonable option than to agree to monthly payments. Just be sure that what you agree to is something you are confident you can keep up with. You do not want to continue to pay small amounts on a debt from 2011 if you are not making a dent in the balance owed, and are continuing to reage the SOL in your state to be legitimately sued for collection. It is sometimes better to ride the collection wave until you are in a better position to settle for a single lower lump sum, but be realistic about your chances for settling quickly.

I often share my opinion of other collection agencies on different pages of this site, and on many of our debtbytes YouTube channel videos that focus on a single agency. Feedback I have from customers and consumers we coach up to deal with Firstsource are mostly favorable. They are approachable and not difficult for you to communicate with. The payment deals and settlements you can target when dealing with them are going to vary from one account to the next (depending on who you owe), and from one person to the next (depending on your hardships and how much of a collection target you appear to be).

Anyone with questions or concerns about dealing with Firstource Advantage is welcome to post in the comments below for feedback. If you want to talk with me about your situation you are welcome to call me at 800-939-8357, option 2.

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About Michael Bovee

Michael started CRN in 2004 with a mission to provide people in need with detailed debt and credit help and education. Michael has participated as an expert panelist in federal consumer protection rule making, collaborated on state law changes governing debt consolidation, has worked as an expert witness in court matters related to the debt relief industry, and is a regular contributor to several personal finance websites.

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Comments

  1. My husband and I have some credit cards that are now maxed out and the balance due on them are now so high that we cannot even pay the minimum payment each month on an of them. One of them has already been sent to the company (First Sourse Advantage) so I was wondering if there was a way that we could consolidate all of them and get one monthly payment that would be beneficial to everyone. If not, can you be help me by giving me your opinion on what we can do and a good place to start. We have been told that we need to consolidate all of them into a small monthly payment that we can afford to pay each month so if FSA doesn’t deal with consolidation, can you recommend-in your opinion- some good consolation companies that would possibly work with us, please. Thank you so much!

  2. Hello Michael,

    I currently owe $7065 on my amex gold card and the account was recently sent to firstsource advantage (1/19/17). This is the only negative charge on my credit report and it is really hurting my credit score. I’m currently in the negotiation process with them and they have so far offered $4065 as a settlement. I have a few questions regarding my situation. First, is there any possible way that I can get this removed from my report for payment? What should be my best goal of getting this amount down to? Additionally, what are my options at this point?

    Thanks,
    Ben

    • You typically cannot bargain to get AMEX off your credit reports, but they do update the bureaus to show you settled, and the balance owed is now zero.

      If your account has been charged off I would target 40% as the most realistic settlement with First Source Advantage. If the account is less than 6 months late you may not be able to get to 40%, and could end up around half.

  3. Hi Michael,

    I posted elsewhere in this forum in regards to my issue, but can’t seem to locate my original post.

    Anyhow, I was laid off from my employer around April 2015. I had a Corp Amex with them and had an outstanding balance of $8324 after I left. After my severance, I obviously was not able to take care of the balance and the account was transferred from an in house team to GC Services, to now First Source all without being reported to my credit.

    I spoke with them today (8/31/16) and was able to work out a settlement of 40%. $3455.

    I check my credit meticulously and it doesn’t seem to have hit my personal credit score as yet, however the card was attached to my personal social and I have been receiving notifications about it.

    I recorded the call today I had with FSA and was promised by the supervisor that I would be receiving a settlement agreement via fax and mail. I repeatedly asked for a PFD or some form of writing that states they won’t report to the bureaus, but he insisted that they did not handle credit reporting, AMEX did and that I should be “rest assured” that if they haven’t reported already then they probably won’t because “they aren’t in the business of making things worse for people.”

    We spoke for an hour and agreed to break the $3455 into 3 large payments over the next 60 days.

    I am worried that one of two things may potentially happen still:

    1. First Source will report to my credit regardless of my payment plan in place with them now that I have contacted them.

    2. They will notify AMEX of my agreement and they will ‘update” my report with the current agreed upon amounts, still plummeting my score.

    Did I handle this correctly? Should I have negotiated lower? Did I perhaps miss something that could harm me potentially later?

    I spoke with AMEX directly before called FSA and the just directed me to back to FSA, so there was no chance of me working a settlement with AMEX directly.

    I am just looking to take care of my responsibility and move on without things getting worse. Any advice is greatly appreciated

    Thank you for your time.

    • Your previous post and my reply are here.

      First Source Advantage does not typically credit report in this situation. Only AMEX will.

      You should indeed expect AMEX to show up on your personal credit report about this account at some point in the near future. I am a bit surprised it has not shown up yet. You have to accept this. You only avoid it by not having stopped the payments. Your credit will bounce back, and quicker than you think in many instances.

      You had/have no shot at negotiating anything different for your credit reports. That is all up to AMEX and no productive conversation was going to be had with them on this issue.

      You negotiated really well. You did not miss anything as long as you are getting this all in writing and are able to make the scheduled payments.

  4. Hello, I recently ran into problems making payments. I contacted most of my unsecured creditors and set up pay off plans with reduced interest. AMEX had already turned my account over to a collection company called First Source Advantage LLC. I owe $8350.

    Firstsource offered me a payoff of $3550 bu I do not have that cash to pay. I tried to make monthly payments short term but they refuse to send an agreement letter unless i give them my bank information so they can take the payment from my account. These guys seem a little shady to me. Any advice?

    • That is a really good offer to settle on an AMEX account with Firstsource. I highly recommend you find a way to take advantage of it, as the account could next land with a different collection agency that will not go that low, or even with a collection law firm that will sue (AMEX is one of the more litigious credit card issuers).

      There is little to be concerned about these days when paying debt collectors, like Firstsource Advantage, using your bank account. Are you concerned you will have the money in the account when it is needed each month? How many months are they allowing to fund the settlement?

      Sending the agreement in writing is pretty normal for Firstsource. You can set the payment date 10 or more days out so that you have time to get the letter. You can also record the call (tell them you are and why) as a backstop until you get the letter. Save the recording and if things do not go as planned post an update and I can help you from there.