Is Velocity Investments a Legit Debt Collector? - Upsolve (2024)

What Is Velocity Investments?

Velocity Investments LLC is based in Wall Township, New Jersey. The company is also called Velocity Recoveries and Velocity Portfolio Group.

Velocity primarily works with original creditors and debt buyers to help collect past-due debts, but they also purchase charged-off debts. Original creditors (like hospitals, utility companies, and credit card companies) eventually sell old debts to debt collection agencies that are better equipped to collect debts from consumers. If this happens to a debt you owe, you’ll usually pay the debt collector instead of the original creditor.

Why Is Velocity Investments Contacting Me?

If Velocity calls you or sends you a letter, they’re most likely trying to collect money on behalf of an original creditor or debt buyer. They may also be trying to collect a debt they purchased from another debt collector or creditor.

Is Velocity Investments Legit?

Yes, Velocity Investments is a legitimate debt collection business.

Despite being accredited by the Better Business Bureau (BBB), their average customer rating is 1 out of 5 stars, and customers have filed more than 140 complaints in the past three years. There are also more than 800 complaints for “Velocity Portfolio Group” on the Consumer Financial Protection Bureau’s (CFPB) Consumer Complaint Database.

The types of complaints on the CFPB and BBB websites vary, but many relate to allegations that Velocity Investments can’t verify or validate the debt or don’t respond to a consumer’s requests for information or attempts to pay the debt. Others allege that Velocity tried to collect on debts not owed and made threatening statements.*

If these complaints are true, they may be violations of the Fair Debt Collection Practices Act (FDCPA). This is a federal law that protects consumer rights by prohibiting third-party debt collectors from harassing and misleading consumers. If you believe a debt collector has violated the FDCPA, you can file a complaint or possibly sue them for compensation.

*Note to reader: These reviews and complaints highlight relevant issues, but they may not represent all consumers’ experiences.

How Do I Know if I’m Being Scammed?

If Velocity Investments reaches out to you, it could be a mistake, but it’s probably not a scam. That being said, scammers can pretend to be from a legitimate company like Velocity to try to trick you into sharing personal information or sending them money.

Avoid debt collection scams by learning the red flags and always getting a debt validation letter before you give out details or pay money.

Do I Have To Pay Velocity Investments?

You might have to pay if they can confirm that the debt is yours, they own it, and it’s the correct amount. But debt collectors often contact as many individuals as possible, so mistakes can happen. Sometimes accounts get transferred among debt collectors multiple times and an individual’s information gets mixed up or lost.

To confirm that you have to pay the debt, ask Velocity Investments to validate it. If they can’t, you probably won’t have to pay them and they’ll have to stop contacting you.

Step 1: Send a Debt Verification Letter

Velocity Investments should send you a debt validation letter (also called a validation notice) before they contact you, with their initial contact, or within five days of contacting you. If you got the letter but want more details about the debt account, you can send them a debt verification letter.

After receiving the debt validation letter, you’ll have 30 days to decide whether you want to dispute the debt. If you file a dispute, Velocity Investments must pause its debt collection efforts against you until it resolves the dispute.

If Velocity Investments can’t validate the debt, you don’t have to pay. However, it’s still a good idea to check your credit score and credit report for any errors.

If they can validate the debt, you’ll have to decide on your next steps.

Step 2: Decide What To Do Next

If Velocity Investments verifies the debt, you have three choices: You can dispute the debt, try to negotiate a debt settlement, or ignore the debt (not recommended).

Option 1: Dispute the Debt

If you disagree that you owe the debt or disagree with the amount, you can dispute it.

Also, check your credit report for errors. The Fair Credit Reporting Act (FCRA) gives you the right to dispute credit reporting errors, which can help improve your credit score. You can ask for a correction by mailing a 609 letter to any of the three major credit bureaus (Equifax, Experian, and TransUnion) reporting the error.

Option 2: Negotiate the Debt and Make a Settlement Offer

Paying off the debt in full is the simplest way to deal with it, but that’s not a realistic option for everyone. But what if you could cut the debt by one-third or one-half?

Many consumers don’t know that debt collectors often settle debts for 40% to 60% of the original amount owed. They agree to this because they buy old debts for pennies on the dollar or get paid a percentage of any money recovered. This means that even if they collect half of your debt, they still make a sizable profit.

If you want to try negotiating a debt settlement, start low and offer to pay 25% or 30% of the debt’s amount. Don’t be surprised if Velocity rejects this offer, but don’t get discouraged either. It’s a negotiation process, and they might agree on a number around 50% to 60%. At that point, you could pay it off as a lump sum or over time with monthly installments.

If you want more information about how this negotiation works, you can read Upsolve’s Guide to Beating Velocity Investments.

Can You Negotiate Every Past-Due Debt?

You can negotiate most consumer debts, like personal loans, medical bills, and credit card debt. You can also negotiate past-due federal tax debts through the IRS’ special programs. Unfortunately, not all past-due consumer debts are negotiable.

For instance, car loans and home mortgages are debts with collateral. Creditors can repossess the car or foreclose on the home if you default on the loan. This gives them little incentive to settle a debt for less than the full amount.

Federal student loans are also not normally negotiable, although there are student loan forgiveness programs that could help.

Option 3: Ignore the Debt (Not Recommended)

Ignoring a debt or the debt collector will make things worse and add more anxiety and stress to your life.

What Happens if I Ignore Velocity Investments?

Ignoring a debt is never a good long-term solution. Even though debts can fall off your credit report after seven years, debt collectors can still contact you to collect the debt.

Ignoring the debt can lead to negative consequences like:

• A lower credit score

• A bigger debt due to fees, interest, and legal costs

• Continued contact from a debt collection company that won’t give up

• Potential legal action and default judgment resulting in a wage garnishment order

We know responding to a debt collector seems intimidating, but you now have the advantage of knowing your options and how they work.

Does Velocity Investments Sue?

Yes, sometimes Velocity Investments sues a consumer to collect a debt. But this doesn’t happen often for two main reasons.

First, Velocity Investments will typically work with debt collectors and creditors to collect debts, not go to court.

Second, Velocity Investments focuses more on providing legal consulting solutions to their clients. They provide legal advice on whether or not to sue. Should legal action be needed to collect a debt, Velocity typically partners with debt collection law firms across the country to handle the litigation. In other words, Velocity is more likely to act as a litigation consultant than become a party to a lawsuit and sue consumers for unpaid debts.

What influences a debt collector’s decision to sue? They’ll usually consider:

• How many other debts you have

• The age and size of the debt

• Whether the statute of limitations prohibits legal action to collect the debt

• How much money they could win, such as applicable interest, the recovery of legal fees and court costs, and wage garnishment or property seizure

If Velocity Investments decides to sue you, they’ll most likely serve you with a complaint and summons. You must file a timely response to these documents to avoid losing by default.

If you're worried about responding on your own, but you can't afford a lawyer, you can draft a answer letter for free or a small fee using our partner SoloSuit. They've helped 234,000 people respond to debt lawsuits, and they have a 100% money-back guarantee.

To learn more about defending a debt collection lawsuit, read Upsolve’s Guide to Beating Velocity Investments.

Let’s Summarize…

Velocity Investments LLC is a legitimate company that collects consumer debts on behalf of other debt collectors or creditors. It’s also sometimes a debt buyer. If they contact you, be sure they validate the debt in writing. After that, you can decide whether to dispute the debt or try to settle the debt for less than the full amount.