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  1. #1
    The high desert

    Disputing collections - Debt VALIDATION - FDCPA

    WHO is subject to the FDCPA? Debt collectors.

    Who is a "debt collector?"

    Almost everybody EXCEPT the original creditor, unless the original creditor uses a DIFFERENT name in their collection efforts.

    The extensive definitions of Debt Collectors as well as EXCLUSIONS as per the FDCPA

    A few excerpts from the many FTC opinion letters on debt collecting and credit reporting

    The links to the FCRA, FDCPA, the opinion letters and a lot of other references are at Legal & References Section

    Excerpt from the Cass (12-23-97) FTC Opinion letter

    "II. "Is it permissible under the FDCPA for a debt collector to report, or continue to report, a consumer's charged-off debt to a consumer reporting agency after the debt collector has received, but not responded to, a consumer's written dispute during the 30-day validation period detailed in 1692g?"

    As you know, Section 1692g(b) requires the debt collector to cease collection of the debt at issue if a written dispute is received within the 30-day validation period until verification is obtained.

    Because we believe that reporting a charged-off debt to a consumer reporting agency, particularly at this stage of the collection process, constitutes "collection activity" on the part of the collector, our answer to your question is No.

    Although the FDCPA is unclear on this point, we believe the reality is that debt collectors use the reporting mechanism as a tool to persuade consumers to pay, just like dunning letters and telephone calls.

    Of course, if a dispute is received after a debt has been reported to a consumer reporting agency, the debt collector is obligated by Section 1692e(8) to inform the consumer reporting agency of the dispute."


    Excerpt from the Wollman (03-10-93) FTC Opinion Letter:

    "The statute requires that the debt collector obtain verification of the debt and mail it to the consumer (emphasis mine).

    Because one of the principal purposes of this Section is to help consumers who have been misidentified by the debt collector or who dispute the amount of the debt, it is important that the verification of the identity of the consumer and the amount of the debt be obtained directly from the creditor.

    Mere itemization of what the debt collector already has does not accomplish this purpose.

    As stated above, the statute requires the debt collector, not the creditor, to mail the verification to the consumer."


    Excerpt from the Krisor (03-03-92) FTC Opinion Letter:

    "2. A collector may not charge (the consumer) for copies of the documentation of the indebtedness mailed in response to the collector's obligations under Section 809(b).

    To do so could constitute an imposition of a fee or service charge in violation of Section 808(l) of the Act.(1)

    The cost of obtaining documentation referred to in your letter is more appropriately a cost of doing business by the collector in the same manner as is postage and telephone charges."

    Just heard of a collector refusing to mail a copy of the judgment to the debtor unless she mailed a self addressed envelope.


    From the FDPCA Validation of debts

    " 809. Validation of debts [15 USC 1692g]

    (a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --

    (1) the amount of the debt;

    (2) the name of the creditor to whom the debt is owed;

    (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

    (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

    (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.


    Reality check

    " 809. Validation of debts [15 USC 1692g]

    (a) Within five days after the initial communication with a consumer ... "

    Often the first time people become aware of collections is when they get their credit report - for whatever reason, that's just how it is.

    The "initial communicaition" in that case is when you request validation.

    If you DID get that letter and you did NOT dispute within the 30 days:

    "(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer."

    I don't know how it affects any other rights under the FDCPA. You can no longer dispute the debt? How can they prove you got the letter? You snooze, you lose?

    In most cases I recommend requesting validation AFTER the bureaus verified an account - unless you are sure it's not your account and URGENT.

    Upon the receipt of the dispute/validation request the collector MUST report the account as disputed or delete.

    I rarely see collectors or creditors comply, usually only after I fax my power of attorney. That's when they get worried about getting sued.

    Fax your request for validation via verified fax.

    I prefer's service to certified. Certified mail is more likely to be responded to. Do you WANT a response? I usually don't.

    You also don't know when the collector received the certified until you get the card back, and many certified mailings result in LOST return receipts.

    I have tried the online certified mail at, and I liked that ok. Still, it costs 4 bucks more and takes much longer.

    If the collector doesn't respond, that's GREAT.

    They can no longer report the debt to the credit bureaus without the dispute notice.

    The FCRA:

    "(3) Duty to provide notice of dispute. If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer. "

    It's MANDATORY that you subscribe to the Equifax and Experian credit monitoring services:

    If the collector continues to report without notice of your dispute, you have to save/print the reports as evidence of their violation.

    You can send the 3-day deletion demand to the collector and settle the violation with permanent deletion and their agreeing not to SELL the account.

    Whether you SHOULD sue if they refuse to delete depends on many factors.

    If it's a valid debt, the collector could then provide validation and still try to collect, blame some clerk for "losing" your validation request, whatever. They could say that they mailed you the validation 1st class mail the day after they got your request. They get creative.

    They lie in court just like they lie to people on the phone.

    I've been in court a few times lately and was quite surprised to see what they can get away with, at least in Judge John Taylor's court in Kingman, AZ.

    Instead of going to court, you can take your case to the CRAs.

    There's a good chance that they don't want to do the WORK involved and rather delete the account.

    So, you can DISPUTE the account with the bureaus AGAIN.

    "Enclosed is the fax with the faxaway confirmation, proving that (collector name) received my dispute and validation on (date).

    Please immediately delete this account:

    1) (Collector) did NOT respond to my validation request.

    2) (Collector) failed to report my dispute to you.

    3) (Collector) verified this account with you after receipt of my dispute as per your (date) notification.

    4) Please provide the verification data: WHEN, HOW and by WHO was this account verified?

    5) ... (here you ask about all the inconsistencies and downright idiotic verifications, often you'll have a PAID account showing currently delinqent, see the "specific" disputes under "D" in Legal & Reference. I can almost always come up with several questions.)

    Should you verify this account again in spite of the enclosed documentation, please furnish the detailed description of your investigation as I intend to take legal action if this account remains on my credit.




    "c: faxed to FTC 202-326-2012"

    DO fax a copy of the CRA dispute to the FTC if you if you mention violations. It gives your dispute more credibility and MIGHT just get an FTC investigation started if enough people complain.

    The results of the CRA dispute:

    1) They remove it. You're done, for now. The collector might just SELL you account and a NEW collection might show up on your credit.

    2) They verify it - the collector just violated the FCRA and FDCPA again, KNOWING that the validation was requested, as the CRA provided them with your Domestic Return Receipt or fax confirmation and details of your dispute: your validation request.

    What excuse could the collector have NOW? It depends on YOUR individual case, but generally speaking, now is the time to sue.


    You include the copy of the Domestic Return Receipt or fax confirmation because the FCRA states at

    611. Procedure in case of disputed accuracy [15 U.S.C. 1681i]

    (a) Reinvestigations of disputed information.


    "(4) Consideration of consumer information.

    In conducting any reinvestigation under paragraph (1) with respect to disputed information in the file of any consumer, the consumer reporting agency shall review and consider all relevant information submitted by the consumer in the period described in paragraph (1)(A) with respect to such disputed information."

    Even if your previous dispute was verified, the CRAs can't mark it "frivolous" if you included documentation, unless they want to violate the FCRA. They also have to provide whatever you send to them to the creditor/collector.

    Since your validation request didn't receive a response, it's likely that further communications with the collector would also be ignored.

    If the CRA VERIFIES the account, but doesn't give you the "description" of their investigation, you have some choices:

    1) request verification data again
    2) sue for the verification data and/or
    3) sue the collector for verifying the account
    4) sue the CRA and the collector.

    I have yet to find the law that states that you have to request dispute verification in a separate mailing.

    Maybe that's because I'm NOT a lawyer -- my advice is NOT legal advice.

    And of course, I don't know everything!

    IMPORTANT: When you dispute an account with the bureaus, the collector then knows you're alive and wanting to clean up your credit.

    As you dispute and request validation, you run the risk of drawing their attention to YOU.

    If those debts are valid, the SOL has NOT yet expired and you HAVE disposable income, especially if it's a good job, there is a chance they will sue you.

    The older the account and the less money owed, the lower the probability of serious collection efforts. It rarely happens that a collector files suit, but it DOES happen.

  2. Collection - Debt VALIDATION - FDCPA and FTC opinion letter excerpts - rev. 7/4/02
  3. #2
    The high desert

    Validation of VALID accounts with large amounts owed

    I want everybody to be very aware that you need to consider the possible consequences of disputes.

    Any time you start disputing you let the creditor/collector know that you are working on your credit and increased collection efforts MAY result.

    And while you may have violations, that doesn't matter to many judges.

    Yesterday a reader e-mailed that Cavalry Investmens, an AZ collector, got a judgment against her and is now garnishing her wages.

    It was NOT a default judgment.

    "I also motioned the court to order the lawyer to produce
    evidence of the debt. The judge did nothing on that motion and dismissed it. "

    This happens ALL the time! Don't assume that just because the FTC publishes opinions or you see some court decisions in your favor every judge will rule that way.

    If you plan on using case law in your legal ventures, you MUST read * Relevance of case law

    IMPORTANT: In the 7th Circuit a one page printout IS validation.

    Think BEFORE you act, especially when you're dealing with large VALID debts.

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