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  Dear
Dr. Don,
I had an excellent credit score (760) the last time I checked. However,
I had a dispute with a merchant that wasn't resolved to my satisfaction.
I therefore refused to pay not only the disputed amount, but another
$1,000 in concurrent charges. I am also considering not paying another
credit card company because they were bought out by the original
credit card company.
It has been a year since the purchase and yesterday
a person from a law firm called. Not necessarily a lawyer, but it
is to that stage. He also tracked down my parents and called them
looking for me AFTER he called me.
I do have several more credit cards and have been
using them and paying off the balance every month. While these credit
cards might get canceled, I can accept that. I use credit cards
as a convenience and more than anything to protect me from vendors
and store rip-offs. However, besides suing me or taking me to arbitration,
what can the credit card company do to me that would motivate me
to settle this? What is the worst thing that can happen? I don't
think they can put me in debtors' prison.
State laws can be different and while my e-mail address
says Colorado, I live in Texas now. Thank you for your time and
for providing objective answers.
-- Nathan Null
 Dear
Nathan,
I understand your frustration with the offending
merchant, but showing your dissatisfaction by not paying your credit
card bill isn't going to correct the problem, or help your credit
history.
You won't wind up in debtors' prison, but the credit
card company could win a judgment against you and take steps to
collect on that judgment. The steps they can take to collect does
depend on state law, but that could mean that your wages are garnished
or there is a lien placed on your real property. Texas isn't particularly
friendly to creditors when it comes to garnishing wages. This is
from the Constitution
of the State of Texas:
No current wages for personal service shall ever
be subject to garnishment, except for the enforcement of court-ordered:
(1) child support payments, or
(2) spousal maintenance (Amended Nov. 8, 1983, and Nov. 2, 1999).
The protection available to you under federal
law for credit card purchases where you have a dispute is more limiting
than most consumers expect. Here's an excerpt from the FTC Facts
For Consumer Guide, Choosing
and Using Credit Cards.
Disputes about Merchandise or Services.
You can dispute charges for unsatisfactory goods or services.
To do so, you must:
• have made the purchase in your home
state or within 100 miles of your current billing address. The
charge must be for more than $50. (These limitations don't apply
if the seller also is the card issuer or if a special business
relationship exists between the seller and the card issuer.)
• first make a good faith effort to resolve
the dispute with the seller. No special procedures are required
to do so.
If these conditions don't apply, you may want
to consider filing an action in small claims court.
There's a difference between dealing with a
bill collector and dealing with the creditor when it comes to what
steps they can take in trying to collect the debt. The creditor
has a lot more leeway, the bill collector has to follow the Fair
Debt Collections Practices Act. There's an FTC
guide for this act as well.
From what you've written, it seems as if you
overestimated the credit card company's ability to protect your
interest in a disputed transaction and taken your credit card company
to task for a problem that lies with the merchant. You asked the
credit card company to loan you money and they did. You need to
take a different approach to this problem. Trashing your credit
history to make a point isn't helping anything or anyone.
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