I have a negative item on my report that I strongly believe is false, and this has caused me to be denied a home-equity loan. I have disputed the item with the CRA, and CA. Sent the 30-day validation letter. Sent another validation letter. Two weeks later, still no response from the CA. I feel my only option now is to sue the CA to get them to remove the negative notation on my credit report.

When I go to the County clerk on Monday and fill out whatever paper work I will need to fill out for a small claims suit, what do I include as grounds for lawsuit? I would appreciate any help.

First, understand the law enough to know what your grounds are for the lawsuit. Did you dispute with the CRA after sending the DV letter so you can get them with continued collection without validation? Do you have a paper trail? Are you ready to argue the facts and the law in front of a judge? There's more to it than just filling out some forms.

Second, understand that a law suit could take up to a year or more to resolve (so you should be ready for the long haul).

If you're asking these questions, and you want to sue someone, maybe you should first talk to an attorney.

Thanks for your response CCBob. I do not wish to use an attorney because I'd simply be wasting more money that I don't have to clean up something on my report that doesn't belong there in the first place. I'd like to keep it the most simple and efficient way possible.

I do have an excellent paper trail as everything I sent was via certified mail.

Regarding the law, I'd like to keep it as simple as possible. I'm not trying to sue for any and every little thing I can find. A company is reporting false information, and this is affecting my ability to get credit. This cannot continue on unpunished.

I am assuming therefore, that this is my basis:

1. Section 809(b) of the Act provides that if the consumer disputes the debt or requests identification of the original creditor in writing, the collector must cease collection efforts until he verifies the debt, or identifies the original creditor and mails a response to the consumer. If the consumer's request for verification of the debt was made in accordance with Section 809(b) of the Act; the collector need not supply the documentation but only so long as collection efforts are not resumed. Section 809(b) requires that "the collector cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt . . . and a copy of such verification . . . is mailed to the consumer by the debt collector." In situations contemplated by Section 809(b), the Act imposes the obligation to furnish verification before the collector resumes collection efforts. In the event the collector decides not to pursue the collection efforts, there is no requirement to furnish the documentation of the indebtedness to the consumer. In the event that collection efforts are resumed, the requirement to furnish verification to the consumer prior to resumption of collection remains.

Thoughts?

To have a cause of action, you need to prove continued collection without verification. Continued collection can include (but is not limited to) phone calls, letters, and not removing the entry when queried by a CRA after receiving a DV letter but before sending verification.

The process (IIRC) is:

1) receive letter from CA
2) Send DV CMRRR to CA
3) get Green card back (or check on line to see they got it)
4) dispute tradeline with CRA
5) see if they are still reporting
6) if they are, then you have a cause of action.

Understand that some small-claims courts can only settle monetary claims and can't order a tradeline removal. Of course you could settle it out of court and negotiate anything you want.


BUT...

You might also look up the FCRA to see if that applies in your case. You might have a cause of action under that (or who knows what other law).

I would imagine that if I get awarded some type of monetary damages, that this would be excellent proof for the CRA that I'm coming after them next if they don't remove the notation.

What state are you in?

In my state (North Carolina) a small claims court can't order anything except money payment. In other words, the court can't order the collection agency to remove the account from your credit report.

Also, in most states, filing a suit for damages under the FDCPA in small claims court is going to be a real challenge. The judge hearing your claims won't be familiar with the law, so you'll have to educate him while attempting to convince him to rule in your favor. You'd probably be better off filing in Federal Court.

Unless you are in a state like North Carolina, which has a state law which mirrors most of the provisions of the FDCPA but is even more consumer-friendly. In that case, you should probably file in a State district court, rather than Federal.

(If you are in North Carolina, send me a PM with your email address. I recently settled a very similar case against a collection agency. They removed the report and paid me cash. I can't disclose the details but the actual complaint is a public record so I can send you a copy of it.)

I'm from NJ.