Commission Chargebacks - What Should I Do?

[Insurance2203]

I worked for an insurance company specializing in the senior market for a year from 2008 to 2009. I did not have a good experience at all, it didn't work out and I am no longer in the industry and don't plan on returning. A couple days ago I got a call from a collections agency saying that I owed the company I worked for a little over $2,000 from chargebacks for cancelled policies. They gave me a deadline of October 1st to pay back the amount in full or they would put it on my credit report, as well as any other reporting agencies. Do I actually have to pay these back and what would happen if I didn't? i.e. jail, court, black mark on credit report or just not be able to work in the insurance industry anymore? Any advice would be appreciated. Thanks.

 

[Norwayguy]

I worked for an insurance company specializing in the senior market for a year from 2008 to 2009. I did not have a good experience at all, it didn't work out and I am no longer in the industry and don't plan on returning. A couple days ago I got a call from a collections agency saying that I owed the company I worked for a little over $2,000 from chargebacks for cancelled policies. They gave me a deadline of October 1st to pay back the amount in full or they would put it on my credit report, as well as any other reporting agencies. Do I actually have to pay these back and what would happen if I didn't? i.e. jail, court, black mark on credit report or just not be able to work in the insurance industry anymore? Any advice would be appreciated. Thanks.

Advances are loans against future commissions. If you have chargebacks due to policies canceling then yes you need to pay this back. Pull out your contract and look for vesting information in regards to commissions... I know some captive companies once you leave you loose any renewals and can even be ineligible for commissions on FY premium due to your contract ending...The reason you want to check this out is to see if any additional commissions might offset these chargeback, this is unlikely but you should check into anyway.

Second I'm assuming you don't have the 2K to drop on this by Oct 1st so you can make payment arrangements trust me they will take them.

Risks of not paying these chargebacks off:

First a Vector listing which is a special database available to insurance companies to see if agents have unpaid balances with other carriers, which makes getting additional appointments and advancing difficult to impossible...Not much of an issue if you are leaving the industry.

Second They will put this on your credit report and like any other bad info will affect your ability to take out loans or get other forms of credit.

Third they can go to court for a judgement and possibly garnish future wages.

Fourth Jail...no not going to happen this is a civil issue and not criminal.

The best course of action is to realize you tried this career out and it didn't work out for you and like any other venture that has ramifications and you should man up and pay off the debt...Call the carrier direct and speak to commissions I find it unlikely the carrier put you out to collections without first sending you letters.

Arrange a payment plan. I'll say it again arrange a payment plan.

 

[gmhopks]

Advances are loans against future commissions. If you have chargebacks due to policies canceling then yes you need to pay this back. Pull out your contract and look for vesting information in regards to commissions... I know some captive companies once you leave you loose any renewals and can even be ineligible for commissions on FY premium due to your contract ending...The reason you want to check this out is to see if any additional commissions might offset these chargeback, this is unlikely but you should check into anyway.

Second I'm assuming you don't have the 2K to drop on this by Oct 1st so you can make payment arrangements trust me they will take them.

Risks of not paying these chargebacks off:

First a Vector listing which is a special database available to insurance companies to see if agents have unpaid balances with other carriers, which makes getting additional appointments and advancing difficult to impossible...Not much of an issue if you are leaving the industry.

Second They will put this on your credit report and like any other bad info will affect your ability to take out loans or get other forms of credit.

Third they can go to court for a judgement and possibly garnish future wages.

Fourth Jail...no not going to happen this is a civil issue and not criminal.

The best course of action is to realize you tried this career out and it didn't work out for you and like any other venture that has ramifications and you should man up and pay off the debt...Call the carrier direct and speak to commissions I find it unlikely the carrier put you out to collections without first sending you letters.

Arrange a payment plan. I'll say it again arrange a payment plan.

Excellent analysis and the best advice!

OP: read this and believe it. Do the right thing by making arrangements to pay back the monies.

A lesson learned, especially to new, or about-to-be new agents: understand yourt contractual obligations BEFORE you sign on the dotted line. If you're not sure - seek legal counsel.

 

[Norwayguy]

Excellent analysis and the best advice!

OP: read this and believe it. Do the right thing by making arrangements to pay back the monies.

A lesson learned, especially to new, or about-to-be new agents: understand yourt contractual obligations BEFORE you sign on the dotted line. If you're not sure - seek legal counsel.

I learned this the hard way..I left a company and shortly recieved a letter about chargebacks...The thing was I knew my business was still on the books...In the contract it stated I was not vested in commission until some period in the future I did not meet...So since I was no longer eligible for the commissions I was charged back...Lesson Learned Read those contract, if your trying to be an independet agent make sure you are the agent and not a LOA (Licesence only Agent) ie commissions assigned to some other entity to pay you....If I'm going to be screwed I want it to be by an inurance company and not some marketing company.

 

[Mark]

I worked for an insurance company specializing in the senior market for a year from 2008 to 2009. I did not have a good experience at all, it didn't work out and I am no longer in the industry and don't plan on returning. A couple days ago I got a call from a collections agency saying that I owed the company I worked for a little over $2,000 from chargebacks for cancelled policies. They gave me a deadline of October 1st to pay back the amount in full or they would put it on my credit report, as well as any other reporting agencies. Do I actually have to pay these back and what would happen if I didn't? i.e. jail, court, black mark on credit report or just not be able to work in the insurance industry anymore? Any advice would be appreciated. Thanks.

IF you are asking if we think you should pay back the money you borrow or if you should stick your upline with your debit, the answer is, PAY YOUR BILLS.

You are part of what is wrong with America Today. Pay the company back the money you borrow from them and your business didn't stick.

Stop trying to get out of paying back the money you owe the company. I bet you didnt even send them 20 bucks in years.

I'm sorry, but you appear to be a low life. Pay your bills.

 

[2112Greg]

Mark, that was an inappropriate response. Dude didn't say he wasn't going to repay it, he was just asking for information. Assuming he's 'what's wrong with America' is a baseless assumption. And actually pretty rude...

 

[Lyn]

Mark, that was an inappropriate response. Dude didn't say he wasn't going to repay it, he was just asking for information. Assuming he's 'what's wrong with America' is a baseless assumption. And actually pretty rude...

Maybe so, but the truth is this poster asked the exact same question on 6/1/2009. He got basically the same answers then, wonder what's up with that?

 

[2112Greg]

Maybe so, but the truth is this poster asked the exact same question on 6/1/2009. He got basically the same answers then, wonder what's up with that?

Ah, I see that. Maybe dude has a short memory.

 

[Mark]

Greg, Trust me. I'm right about this guy. He is trying to find a way to stick his upline with his bill/debit. The truth be told, I bet this debit has already been taken out of some poor guys paycheck. If he pays back the debit, they will give the money back to his MGA.

He knows he owes the debit. SO just pay it back. He could at least send a check for 20 bucks out right now.

 

[Newby]

This is another example of why agents need to create a reserve account if they take advanced commissions.