• Report: #770192

Complaint Review: State of Maryland Central Collection Unit

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  • Submitted: Sun, August 28, 2011
  • Updated: Sun, February 17, 2013

  • Reported By: Carla — Oak Hill West Virginia United States of America
State of Maryland Central Collection Unit
300 West Preston Street Baltimore, Maryland United States of America

State of Maryland Central Collection Unit 13-Year-Old Insurance Lapse Scam Baltimore, Maryland

*UPDATE Employee ..inside information: Clarification

*Consumer Comment: No Statute of Limitations on State Debts

*General Comment: Problem

*Author of original report: Okay Credit Report

*Consumer Comment: File It But Don't Pay Anything On It....

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I just got a letter from the Central Collection Unit in MD telling me that I had defaulted on $5131.45.  The letter was a carbon copy and very hard to read, with some lines smudged or copied over something else.  The left side was completely illegible, but I was able to make out "VA-INS-LAPSE-DEFAULT-MASS LOAD".  I'm guessing it should have been "MVA".  Some of the numbers on the account are too faded to read.

Researching these letters led me to this site.  I think this goes back to a car I bought in MD that was totalled back in 1998, 13 years ago.  I had insurance on it while it was driveable, and I have no idea where it is now.  The insurance company I had refused to pay for the car, so I had to pay it off myself.  I left the car at the dealer's that I bought it from because there was nothing I could do with it.  I think it was Fitzgerald's Auto Mall.  They probably have the tags or something; I don't even remember anymore, it was too long ago.  I left MD when I left the Army in 2001, and this is the first I've heard anything about this. 

Before I found this site, I did some research on MD law, and found that their statute of limitations for debt collection is 3 years.  If this applies in my case, then I shouldn't have to pay anything.  Of course, I shouldn't have to pay for insurance for a car that I got rid of over a decade ago, regardless.

This report was posted on Ripoff Report on 08/28/2011 01:02 PM and is a permanent record located here: http://www.ripoffreport.com/r/State-of-Maryland-Central-Collection-Unit/Baltimore-Maryland-21201-2321/State-of-Maryland-Central-Collection-Unit-13-Year-Old-Insurance-Lapse-Scam-Baltimore-Mar-770192. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.

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REBUTTALS & REPLIES:
1Author 4Consumer 0Employee/Owner
Updates & Rebuttals

#1 UPDATE Employee ..inside information

Clarification

AUTHOR: Andy12 - ()

There seems to be a lot of misinformation and confusion among the general public about Central Collection Unit (CCU) and its relationship with Maryland's MVA.

CCU is part of the State of Maryland. It is a government agency, not a for-profit collection agency. CCU collects debts for many State agencies in Maryland. MVA insurance lapse defaults are merely one form of debt sent to CCU for collection.

It is MVA, not CCU, that determines the size of the fine. If you see a very large fine, it usually means it was a very long insurance lapse. Generally 12 months or more. It also means that the license plates were never returned to the MVA. Maryland law states very cleary (It is printed on the reverse of your registration card) that failing to have car insurance in Maryland is unlawful and you will pay a penalty if you drive without insuance. The amount of the fine is also specified. It is 150 dollars for the first month. So a fine of 1 day or 30 days is the same penalty, 150 dollars. After a month and no fewer than two notices informing a motorist that they do not have insurance coverage, the penalty becomes 7 dollars per day for each day thereafter. This is capped at 2500 per year, per vehicle.

There is no statute of limitations on fines assessed by a government agency. This was mentioned in by others in this thread, but it bears repeating. These fines do not go away if ignored.

These are administrative/civil penalties, NOT debts for products or services rendered. This is an important distinction, because Chapter 7 bankruptcies (personal liquidation bankruptcies) DO NOT discharge MVA insurance lapse penalties. Many. many bankruptcy attorneys, in Maryland and elsewhere, fail to understand this key distinction. You can get temporary relief while in bankruptcy however. MVA is permitting people who file bankruptcy and include the unpaid fines in collections in their filing to receive their MVA services (Tags, emssions testing, title work, etc.) However, when the bankruptcy discharges, the fines DO NOT discharge. Debtors must repay the fines. Again, this is state law as determined by Maryland's Office of the Attorney General.

If you receive a mailing from CCU about an MVA fine, and you dispute the fine, the point of contact is MVA, not the collection agency. CCU will only have limited ability to resolve any dispute about the validity of the fine. Many people who receive very large fines fall into the common category of individuals whose vehicle left their possession (Sale, theft, accident, repossession) and they cancelled their insurance policy without returning the tags. MVA will reduce or eliminate the fine if it can be proven, through the appropriate paperwork, that the car was not on the road during the lapse period. This is as simple as providing a police report, repo documents, accident report/total loss letter, or notarized bill of sale to MVA. It is not a complex process and does not require an attorney. CCU does not even need to be involved in this dispute process.

Alternatively, if legal action was initiated by the State of Maryland for unpaid insurance fines, the point of contact should be the Office of the Attorney General, not CCU. CCU really only handles accounts when people choose to voluntarily repay their fines.

As far as repayment plans go, CCU has clearly delineated guidelines for establishing monthly payments. Expect to pay no less than 20% down to begin the plan. So for a 6000 dollar fine, 1200 dollars would be the minimum down payment. These figures are published on CCUs own website. Payment plans are offered on virtually all accounts, with the exception of accounts where a previous plan was started and then defaulted on. If you sign a contract promising to repay a fine and never send in a monthly payment, CCU is not going to permit you to scrap the agreement and sign a new plan on that same debt. The full amount must be repaid before any MVA suspensions or flags will be lifted.

I hope this was a helpful post. CCU is in no way a "scam", rather they are part of a system of enforcement that keeps Maryland motorists safe by encouraging all Marylanders to maintain the minimum statutory requirements of insurance coverage on their cars.

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#2 Consumer Comment

No Statute of Limitations on State Debts

AUTHOR: SadButTrue79 - ()

I hate to be the bearer of bad news here, but there is no Statute Of Limitations on State/Govt Debts.  If you do not pay, they will simply deduct the money from your tax refund every year, until the debt is paid off.  (It probably isn't on your credit report since 7 years has passed, but the CCU can/will continue to try to collect that money indefinitely.)

I speak from personal experience.  After 10+ years of never hearing a peep from them, I received the same carbon letter from MD CCU with a $12K+ debt (more than 1/2 of that amount was apparently fees/interest).  When I called and raised the SOL point, I was told this did not apply to them since they were GOVT... I verified that online later.  Also, I obviously did not have $12K laying around, and they refused to set up a reasonable payment plan.  As such, I haven't received my MD state tax return in a few years.  Every year, in place of refund check, I get a letter saying that my tax refund money was applied to my debt.

If you are no longer in MD, you may not have this problem, because from what I can tell, they only touch your MD tax refund... So hopefully, you won't have to worry about this.
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#3 General Comment

Problem

AUTHOR: Debbi - (USA)

I too have had this happen, my report is on here as well. It has been 14 years since we lived in MD. I fought with them on the phone along with my husband as well and we haven't heard anything since until now. Tax time. They took it out of our taxes, this weekend after 14 years with no kind of proof that I asked for from them, they just did it and now all the money that was for my sons college is gone. This makes me sick. How can these people keep getting away with this stuff this way? I feel like all of us that left the state are the ones getting punished.

Something needs to change from the way these people are so money grubbing and malicious to do things like this to so many people and get away with it. How do you fight the damn State? The Fed Government? They all know they can get away with it no matter what. We need a change! This is all only going to get worse.
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#4 Author of original report

Okay Credit Report

AUTHOR: Carla - (United States of America)

Thanks for your advice.  Because the letter was so awful-looking, my first thought was that it was some sort of identity theft.  So I took your advice and checked my credit record through Equifax.  There was absolutely nothing on that report that seemed linked to the insurance charge, or whatever it's called.  For the seven years on my report I had no debts or loans I was unaware of, no late payments, no collection agencies, no public filings, nada.  And as I kept thinking about it, I realized that it hadn't been on my credit report at any time in the last 3 years, because I checked my report each year, or saw a report from a loan officer who checked it.  This was really a bolt from the blue.

I felt hopeful when I found a Maryland attorney's website that explained the statute of limitations on debt collection.  It was 3 years since the last activity, and 12 years after a court ruling (which never happened), but I'm still nervous that this doesn't apply in my case. 

I haven't called them yet, partly because I'm trying to get all my ducks in a row first.  I will keep your advice about how to handle the phone call in mind, too; especially about any tricks to get me to make a "good faith" payment.  I am nervous, but I think it'll turn out okay now.  Someone else had mentioned that this seemed like a bug in their computer system that is going through accounts from over a decade ago and sending out automated notices, and I think they're onto something.

I just feel like I need to clarify my situation one more time:  I had insurance on my car while it was driveable, it was totalled (you couldn't even turn it on) 13 years ago, and I moved out of MD 10 years ago.  I will never pay a dime on this charge.
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#5 Consumer Comment

File It But Don't Pay Anything On It....

AUTHOR: Jim - (U.S.A.)

Your DMV sold your car registration debt to a collector...who sold it...who sold it...etc....  However, the date of determining the statute of limitations is not date of loss necessarily, but date of last payment.  In your case, they happen to be the same (it sounds like)...  What you should do:

1.  Don't pay anything on it.  EVER.  Don't even fall for their "make a good faith payment."  If you make any payment on it, the clock begins at 0 days and you've confirmed the debt as yours.  Just tell them to pound sand.

2.  Pull a copy of your credit report; go to FTC.gov and pull a copy for free.  I suspect that debt is now appearing on your report.  You need to write the 3 reporting agencies, deny the debt is yours, and have the item removed.  The item is probably affecting your credit score.

From this point on, this debt is not yours, OK??  If they call again wanting payment, let the collector know the debt isn't yours, but that you'd be happy to get a tape recorder and record the conversation...do you wish to hang on??  If they're stupid enough to hang on, include the word "harassment" as often as possible.  If they threaten to take you to court, tell them "thank you - I'll see you there!!". 

I don't think you'll have a problem with the MD DMV in getting renewal tags....if you even need them at this point.  Best of luck to you....
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