- On July of 2010 my wife received a letter from DCS stating we owed American Student Assistance money. To the tune of 50, 000 dollars. We knew this but were in financial straights. We had to make some difficult choices. One of which was to not pay on her student loans. We were grossly irresponsible and did not stay in communication with the company that was handeling our payments. As a result...enter DCS (Diversified Collections Services, INC).

(NOTE: DCS is a collection agency. They do NOT hold our debt. The guarantor (ASA in our case) hired DCS to collect from us. Which is all legal)

- I called the person who signed the letter from DCS. I left 2 messages to which he responded the next day. He informed me that I had 2 days to pay the full balance or Wage Garnishment was going to start. Which is 15% of my wifes gross paycheck. He said that she will qualify for the Rehabilitation Program only if I was able to submit the following:
- Down Payment
- Financial information to ONLY include (pay, mortgage payment, car payment and cell phone payment) Nothing else would be considered in the formula to determine my payment structure to get back into the Rehabilitation Program.
- 2 family or friend references.

Unlike several posts I have found our DCS agent was not rude or disrespectful. He was a liar, he lied and/or mis-represented the truth as it relates to our guarantor (ASA) and what was/is avaliable to us. So this is what he did...
- He spoke to me about my wife's debt without her permisson verbal or written from her. Which is a violation of Fair Debt Collection Practices Act.
- He offered me 4 seperation solutions to pay back the debts. All of which were grossly unrealistic even if we had no debt. The best one was to place roughly a $1, 700 down payment and make 9 months of payments at $415.
- I asked him if the $1, 700 down payment went to the principle of the loan and he said "Yes!" (LIE NUMBER 1)

**I then did some research on DCS and reached out to the guarantor, ASA to gain more information**

TRUTH: Down payments goto their bonus's and management. ASA (the guarantor) explained to me that they (the guarantor) DO NOT see any money from downpayments. That is a function of DCS (or credit angencies in general) to get paid for their services. Guarantor's (ASA in our case) only get paid from the monthly payments.
It typically works out to 80% goes to interest/penalties and 20% goes to the collection agency. Nothing is paid to the principle.
**DOWN PAYMENTS ONLY GOTO THEIR BONUS'S AND MANAGEMENT OF DIRTBAG COLLECTION AGENCIES**

I found that DCS has an awful reputation amoung the blogisphere and people they have conducted business with regarding debt collections. Just google it...you'll see.

The guarantor of my wifes loan (ASA) explained to me (after my wife gave them permission to speak with me) that we are eligable for the Rehabilitation Program of up to 1% of the total balance of our debt. Which means, we will need to pay 1% of the balance due for 6-9 months to get out of 'defualt status'. At that point they (ASA) will call back the collection from DCS and sell my wifes loan to legitimate company to set up payments.

This is my whole issue. The system of collections is counter intuitive with respect to Student Loans. Collection Agencies (like DCS) have ZERO motivation to resolve the matter with an individual. The bigger the down payment (lie or not) the bigger their bonus is. The bigger the monthly payment...the bigger their paycheck is. There is ZERO incentative to get a person on a payment plan. They make money on you fighting them. They want you to not pay...so they can garnish your wages and collect their 20%. The hope is that you cave in and send in a down payment.

CONCLUSION:
- I called the guarantor and informed them that DCS was not cooperating and being resistive to resolving this matter. I then detailed the lies and actions.
- The guarantor gave me the name of a manager and phone extension to which I called at DCS.
- I explained the lies FDCPA violation to the manager at DCS.
- The manager set me up on payment Rehabilitation Plan with a fraction of a downpayment.
- My wife will only be on this plan for 6 months.

Now my wife is paying .5% (yes, half of one percent) monthly payment with a very reasonable VERY LOW down payment.

- Fact is the initial contact with DCS is set-up to scare the crud out of you. To intimidate you and force you into doing something stupid ie: give them a down payment, references and bio information.

If you would like further information or HELP in dealing with this company please do NOT hesitate to email me at: [email protected]