Debt Relief Industry

Chase and Citibank Said to be Refusing Escrow Company Payments on Debt Settlements

I just heard from the CEO of a debt settlement company that said his third-party escrow company is getting flooded with refused settlement payments sent from the escrow company to Citibank and Chase.

The CEO said he’s had client payments refused in just the past couple of days.

These settlements were with law offices and third party collectors on behalf of Citibank and Chase and the accounts now appear to have been pulled back by Citibank and Chase when the payments are refused.

Has anyone else seen something similar and if so, how are you dealing with this when the payments are refused?


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Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

2 Comments

  • I have seen this in the context of home loan refinance. Some collection firms/agencies actually put on the sif that if the settlement funds come from a refi or third party, the settlement is null and void. In that case, I don’t believe much can be done. I’m not sure of the nature of the “third party escrow company” in this matter. I would say the settlement documentation verbage controls and absent some stated prohibition of this method of payment, would argue there is a settlement that can be enforced. Resubmit the settlement payment along with a letter from counsel citing appropriate law. You probably won’t get a response and then you will have to decide what is best for the consumer in terms of settling the account. I’m guessing you’ll figure out another method of payment.

  • I have seen this in the context of home loan refinance. Some collection firms/agencies actually put on the sif that if the settlement funds come from a refi or third party, the settlement is null and void. In that case, I don’t believe much can be done. I’m not sure of the nature of the “third party escrow company” in this matter. I would say the settlement documentation verbage controls and absent some stated prohibition of this method of payment, would argue there is a settlement that can be enforced. Resubmit the settlement payment along with a letter from counsel citing appropriate law. You probably won’t get a response and then you will have to decide what is best for the consumer in terms of settling the account. I’m guessing you’ll figure out another method of payment.

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