Beware the Collections Agent---When on Vacation?

Most of us go on vacation to get away from the things that are causing us stress. Well, that might not be so easy anymore. Travelers across the country are reporting an increase in collection agency contact for even nominal amounts of money because of a dispute they raised with airlines, hotels and rental car companies--even after the company has acknowledged its own mistake. A few examples:

A gentleman traveling through Pennsylvania was pulled over for an expired registration on his Hertz rental car. Despite repeated attempts to reconcile the issue with Hertz, he was notified by the company that collections activity was underway because of the unpaid ticket. After several automated phone trees and countless customer service agent assurances the matter would be handled, he feared his credit report was in jeopardy. It took months to clear up the issue.

A woman in California was not notified when her flight changed, resulting in her missing a plane to Los Angeles. After buying a new ticket, she disputed the charge with her credit card company, which agreed to alleviate the cost. Delta Airlines was not so accommodating. They are starting collections activity.

A woman using Travelocity faced technical problems on the site and called the company to finalize the travel plans and place deposits. However, the original booking was processed and a month after she returned, she found out she had been charged twice. Once again, despite customer service assurance all would be handled correctly, she was notified of collections activity. She ended up paying an agreed upon settlement with the collections agency under protest and was eventually able to be refunded thanks to her repeated efforts to convince Travelocity and the cruise line of the mistake.

If you have recently emerged from bankruptcy or are in any stage of trying to improve your credit, be aware that traveling now poses a risk to your financial credibility. Adding complication to the matter is the fact that traveling involves spending money in far away places, which can translate into having to deal with money problems and disputes over the phone or e-mail, adding substantial frustration to an already tedious process.

Just because an expenditure happened in another state or country doesn't mean your rights change. Under the Fair Debt Collection Practices Act, a collections representative must follow-up in writing within five business days of phone contact in regard to a debt. After that notice, you can dispute it within 30 days. It's best to do so in writing by certified letter, not by e-mail, to ensure its delivery.

Also, be able to determine a collections threat from the real thing. Many collections industry experts agree that most first contact is just a hard-nosed tactic to influence someone they believe owes money. Most often, it works; especially when someone has just returned from a trip and feels that the nature of the spending alters the playing field. If you owe less than a $1,000, the first contact is typically just a threat. Use that time to understand your rights and if needed, engage the services of an attorney.

One of the most surprising aspects of these examples is the speed at which the collection efforts get underway. If you are planning a trip this summer, be aware that if a financial complication occurs along the way, it is best to try to solve the matter as soon as possible. Also, don't wait or rest on assurances from the companies you are dealing with. Speak to managers and get things in writing. A vacation is supposed to be relaxing, not a financial nightmare.