Is this a valid "validation"?

One of the first things we all (including them) needs to learn and understand is that it matters not what our opinions are or what we think and that goes for them too. The only thing that matters is how a judge will rule when presented with an argument whatever that might be. As an illustation let us assume that Chaudhry v. Gallerizzo is an old case whose decisions have been superceded with newer decisions that overruled Chaudhry and they believe that Chaudhry is valid law. Then the only way to resolve the issue is to present the question to a judge and see what the ruling is that comes back.

If we disagree with the Judge's ruling then we have the right to dispute that ruling through the appeals process. Neither party really wants to go to that much trouble and expense. So each side prepares their side of the dispute to the disagreement citing relevant cases. Those relative cases needed to develop a position are found through the process of Shepardization. Each side will have to Shepardize Chaudhry and see what other courts have ruled in newer and therefore more relevant cases. Once they have done that then they can properly prepare their argument point by point backing up each point with supportive case cites or statutory law as the case may be. The judge may decide what his decision will be based on the arguments of opposing counsel or he may decide to do his own homework to see if he agrees with one side or the other and will then make his ruling based on either his knowledge of the cases cited or on knowledge gained through his own research. That is the way it is done. They have fed you the Chaudhry case hoping you will believe them and take their word for it based on the fact that they are attorneys. That usually works. People are scared to death of all that legal talk. They shouldn't be. It is all just a logical process of doing things the right way.

It does if you don't contest the allegation.

They have the right to do that since there was no "accord and satisfaction" as you allege. Obviously you thought that the legal principle of accord and satisfaction existed based on what you read on some message board and believed. Obviously your informant didn't understand the legal principle of accord and satisfaction but led you to believe that they did and had a slick new trick to put one over on the creditors.

So let me teach you what accord and satisfaction is and how it works. First of all you need to understand that accord and satisfaction is somewhat akin to a 3 legged table. If any of the legs are missing then the table falls over.

The first leg of A&S is that there must be some defect in the product or service you got and a conflict arises about those products or services. The consumer must contact the creditor or his agent and voice his displeasure. That completes the first leg of the table. Then the two of them must reach an accord (agreement) as to what the reduced value of the defective goods and services might be. There is the completion of the 2nd leg of A&S. And then, based on the new agreement the satisfaction or 3rd leg of the table is completed by the consumer paying the amount of the newly reached agreement.

The way you did it there was no disagreement about the value of the goods or services and there was no accord as to what the value of the goods or service should be. Since there was no accord the funds you sent them were merely applied to the account in a normal manner and when you paid no more they charged the account off to P&L and sold it to whoever would pay the most money for it. No matter how good the trick seemed to be your own common sense should have warned you that a scam or trick was involved here and that those kinds of things seldom if ever work.

Yours is another prime example of what I constantly tell people and that is never accept what anybody tells you on these forums. I don't even want you to believe what I have told you above. Go look it up in Black's Law Dictionary and you will find out whether I am right or not.

Now then, is their statement that verification of the debt merely requires them to send you certain statements. What they are relying on is what must be present in the initial contact letter with the consumer. Five indices which are clearly delineated in the FDCPA. So, if their initial contact letter was constructed so as to comply with that section of the law then they already verified the debt when you received your first or initial contact letter from them.

If that were sufficient then why does FDCPA state that if you demand validation of the debt they must contact the original creditor and obtain the information needed to validate the debt and mail it to the consumer? Surely then verification and validation must be two separate things. Right?

So the question then becomes what is it that will satisfy the demand for validation for it surely is much more than what must be supplied to the consumer in the initial contact letter with the consumer? Make sense?

If it does make sense then surely their reliance on Chaudhry must be mistaken, Right?

So now it is up to you to determine what it is that they must obtain from the original creditor and mail to you and since they obviously did not comply with the demands you made upon them then you will need to seek redress through the federal court system to punish them for their bad behavior.

If you choose not to do that because you think it is too much trouble then I guess you will have to accept what they told you, like it or not. Writing them more letters disagreeing with their position is useless.

 

Many things that John Gliha has invented have worked very well. Many if not most didn't work, still don't and never will. Unfortunately, many people have paid huge amounts of money for what was mostly junk legal theory based on poor research and half baked ideas on what John or others associated with him thought ought to work When you mentioned the A&S I naturally thought of John Gliha immediately but many others picked up on that one and proliferated it all over the internet so you might have picked it up from almost anywhere.

A&S or at least the popular version of it is nothing more or less than an attempted fraud upon one's creditors. Debt validation letters were most likely first invented by John about 10 years ago or so. Another was the concept of estoppel. His letters and other people's embellishments of them are still around today and will probably be around almost forever.

What 5 day requirement are you speaking of here?

What statute of limitations are you talking about? If the SOL to bring suit then all you can do is wait for them to sue you if they ever do and if you are speaking about the 7 year for reporting then you may have to see if you can't find grounds to bring a federal lawsuit.

Filing federal lawsuits is the "new" frontier in dealing with debt collectors and local court judges alike. There are an almost unlimited number of questions of law that can be used as causes of action but the problem is that people cannot bring dumb questions and expect to do anything but waste their time and money. It takes quite a bit of study and research to do it and do it right.

Filing frivolous federal lawsuits can get you into real trouble in any court so although I advise people to file federal lawsuits against debt collectors who cross the line in their collection attempts I don't advise that they run to federal court over every perceived wrong doing. Just because what they have done might seem wrong doesn't mean that it is wrong nor does it mean you can win even if it is wrong.

You have to choose your battles carefully.

 

Cap1 and I agree fully on this matter.

To explain, what you got was essentially a "Chaudhry Affidavit". On another Board I did a complete analysis of the Chaudhry Affidavit and came to the conclusion that it is little more than the CA saying "yep, you owe it".

That does not mean the CA has to provide you with absolute proof of the matter either. The Chaudhry case to which the CA mentions didn't say what WAS Validation of a debt - the Court merely ruled that the Consumer did not have the power to dictate what would be acceptable as Validation (and that ends the entire Gliha Letter's usefulness). To date no Court has given any ruling on what proper Validation is. The Courts seem to have taken the same position with Validation as they did with Obscenity - they don't know what it is, but they will know it when they see it.

All that said, just because they sent you a stack of paper doesn't mean that's the end of the issue and you are stuck. They merely complied with the Validation requirements, which merely allows them to begin collecting again. To force payment they still have to sue, ad you have all your rights in Court, including the right to deny the allegations in the Complaint, to assert Defenses, to interpose Counterclaims and to engage in Discovery. There is another Board that is geared to assist consumers in all this. I am not aware of any threads or posts on CN that would be helpful in that respect. You would need to research the Court rules for where you live as well as the formats required for the various Pleadings and the proper method of serving them on the opposing side.

 

I so love Chaudry, CAs seem to love ACA's misinterpretation of a case which it has no relevance unless the validation you are requesting (a) is for an amount which is anticipated and not yet occurred, or (b) is protected by lawyer-client privilege.

Those were the two types of documentation which were unresolved in Chaudry. Obviously, unless the debt collector hires the Psychic Friends Network, they can't provide (a) since it would be misrepresenting an amount which had not yet been incurred, yet. (b) Chaudry believed that the defendants were billing him for legal services which may not have been for the legal services which would be his responsibility, and wanted EXACT details as to EXACTLY what legal services were being charged for in the legal fees which he was being charged for.

As Flying said, validation is treated as one of those undefinable definables. Now, I personally do provide a rough sketch of what I do consider to be valid validation, as long as you can 'justify' your request as being reasonable to within what the purpose of validation is, you should be able to defend your request to a judge if need arises.

(1) The amount of the debt is correct (I also define that further using the commentaries as not including the list of charges in Section 808(1), unles they are authorized by the contract or state law -- i.e. if they can't find a state law authorizing the charge, they better be able to provide the specific contract saying that it was agreed to).
(2) That the collector is attempting to collect from the correct John Doe, John Doe (II), instead of the innocent party John Doe (I) who has been mis-identified by the OC or CA.
(3) The name and address of the original creditor.

As long as the items are specifically answering one or all of these questions, you should be on the right side of the line.

On the reporting, more than likely, JDB sold the account numerous times, and received the account back numerous times. This is more than likely the latest sucker to have been dumped the account.

 

Dang it, I just can't seem to figure out what it is that causes these disagreements to keep popping up but they do. Now then we have this little matter about the usefulness of John Gliha's letter of validation. I simply cannot bring myself to agree that Gliha's validation letter is now useless. The only thing about Gliha's validation letter that is useless is all those questions they demand be answered by the 3rd party debt collector. There simply isn't any requirement in FDCPA that a debt collector even acknowledge that he received the demand letter, much less answer any of those questions. That is one of the prime reasons why they must be sent out by certified mail. You get a receipt of delivery that way. You get proof they got it in case they decide not to acknowledge they got it and don't respond to it. Leave off all those silly questions and that garbage about answering them under penalty of perjury and the letter is just as useful as ever . In fact, if Gliha's letter is useless then how else would you go demanding validation? Really now, if we did not use the Gliha letter what would we say to them? Maybe something like "Hey Bro, what you layin all dem
big fat lies on me for?" I don't think so. Sorry to have to disagree with you about the usefulness of the Gliha style validation letter but that's just the way it is.[/quote]

To date no Court has given any ruling on what proper Validation is. The Courts seem to have taken the same position with Validation as they did with Obscenity - they don't know what it is, but they will know it when they see it.
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Well Dang me! Here is another place I have to disagree with you. If the courts don't know or understand what validation is what are we going to do with the 7th Circuit Court's opinion in the case of Fields vs Wilber law firm in which Judge Michael Mihm ruled that Wilber's letter was misleading because it gave a false impression of the character of the debt. It is unfair to consumers under the FDCPA to hide the true character of the debt, thereby impairing their ability to knowledgeably assess the validity of the debt. One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt. The district court agreed that the dunning letter in this case was facially misleading. But we are forced to disagree with the district court's determination that the letters' mis-
leading nature was irrelevant as a matter of law because Fields could reference the contract from Kruger Animal Hospital or because she could telephone Wilber and ask for an explanation. As we noted above if she saved her contract from nearly eight months earlier, the unsophisticated consumer would not necessarily understand that Wilber was seeking $250 in fees, an amount allowed, but not specified, by the contract. Furthermore, in Miller, 214 F.3d at 875-76, we rejected the proposition that a debt collector could provide incomplete information in a dunning letter so
long as it provided a telephone number for the debtor to call.

So, as can be plainly seen in Fields and in Miller, the courts do know and have ruled on exactly what validation consists of or at least the 7th Circuit courts know and have ruled on exactly what validation must consist of. As I am sure,
such a learned person as yourself is well aware that the 7th Circuit is one of the most prolific in rendering decisions on FDCPA and is most certainly one of the most highly regarded court systems in the entire U.S.

Sorry about that, but I must most respectfully disagree with your statement that the the courts don't know what validation is or what it must consist of. I tend to think that the 7th Circuit has very clearly delineated what validation must consist of.

Well, now you are aware of a post on CN that is helpful in that respect so you can quit suggesting that our readers search for some other board with supposedly better gears.

It is, of course, excellent advice to research the court rules but the formats are not that easily located and the correct wording is impossible for many people since it varies from document to document. It is therefore imperative for most people who wish to write court documents to take a course in motion writing or have someone who has taken motion writing courses help them with their documents.

Again, sorry I must disagree with you but please understand that I do so only with the utmost respect.

 

While one Circuit has ruled (in a roundabout way) on what Validation is, the others have been quite silent on the subject. One decision in a District Court is not much precedent. Not only that, but a reading of your own summary of it indicates that the issue was decided on 1692e and 1692f, neither of which deals with Validation, which is 1692g. 1692e and f deal with Misleading Statements and Unfair practice.

As far as what to say in a VOD letter, I have found the simpler the better. I have always advocated that a good VOD letter says the following:

1. I dispute the Debt
2. Please Validate it.
3. All telephone calls are inconvenient
4. I will enforce my rights under FDCPA.

Once this is said, all the rest is pure relish on the hot dog. The lengthy Gliha letter, having been stripped of almost all of its ability to demand anything, has been rendered moot by the Court and by pure simplicity. Gliha's demand that his questions be answered under Penalties of perjury or any other standard is a work of pure nonsense. No Consumer would respond to a Collector's demand for that, why should we expect a Collector to be that stupid?

 

Ummm, that decision is not from a district court but rather from the 7th Circuit Court of Appeals so it carries a lot more weight than if it were from a DC.

That was not from any summary of mine but rather a copy and paste directly from the actual words of the Court in giving it's opinion.

Ah yes, but the problem with that analysis is the following snippet from the court's decision. One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt. which is plain, easy to understand words is saying that if the various charges that comprise the total amount of the debt are not itemized then the claim amounts to nothing more than false and misleading information. Now then, while I may be as dumb as a stump, to my way of thinking that means that the claim must be fully itemized and provided to the debtor or FDCPA is violated because the unitemized statement of the account amounts to providing false and misleading information to the consumer. That is the way I read it. Now then, please enlighten us with your interpretation which, if I understand what you have said correctly, would be to disagree with the court which said that failure to provide a fully itemized statement of all the charges and how the final amount was arrived at amounts to providing the debtor with false and misleading information.

So I for one will be eagerly awaiting your explanation showing how providing a debtor with a statement which basically says little more than "you now owe XYZ Bank the sum of $1000.91 plus attorney fees, interest, court costs and whatever else bringing the total to $9,399.99 is not providing false and misleading information. I'm sure that Judge Mihm of the 7th Circuit Court of appeals would be most interested in learning that his decision is wrong.

I must agree that the above is much better than the Gliha letter and the multitude of versions thereof

I can't remember ever hearing of any debt collector who sent validation certified.

 

Chargeoff is an internal bookkeeping mechanism. Banks and Credit card companies are required to keep a reserve account equal to a set amount of their total operating capital. That amount is usually around 1 percent or so.
I don't know what the exact amount is because it can vary from time to time and it can vary depending on the amount of bad business they charge off annually. The basic rate is set by the federal reserve or the OCC. Don't know which one it is but whoever is the regulating authority for such matters.

I'm sure there are others here who are much more knowledgeable than I about such matters.

When an account is charged off it is charged off against their escrow type account reserves for bad debt. That allows them to take an equal amount out of their reserves and put it back into their operating funds and be lent out to borrowers. As the amount of money in their reserve accounts is drained below a certain point the amount that must be put into the reserve account can be increased by the regulating agency. So the act of chargeoff does not become a profit to them in any way. But yes, they can and do report their losses on their taxes as a loss. That still don't make them any money but rather only reduces the amount of taxes they must pay. Since they are basically, in a sense anyway, corporations registered and usually listed on some stock exchange they have shareholders so their losses can cause them to have to pay out less to shareholders. Banks are usually National Associations and not corporations however. If they are national banks they are not allowed to be corporations however. They just operate in much the same manner as corporations do. Banks and credit card companies which are not Nationally Associated are almost always corporations. Discover Card for instance is not a Nationally Associated bank and is incorporated under the laws of Delaware.
In making mortgage loans and credit card loans banks never risk any of their own money. The debt is sold to various trustees who then bundle the securities and sell them on the securities and exchange stock markets to investors world wide. Gliha and many others are correct in saying that banks never risk any of their own money but their analysis of why that is true is nothing but pure myth. The loans are instantly sold to a separate shell corporation who buys the debt from the issuing bank, bundles them into salable bundles and then sells the bundles to trustee banks such as Bank of New York or Duetsch Bank or any one of several others who then grade the bundles into other bundles according to the credit ratings of the debtors in the pool. There are usually 3 grades of securities starting with prime bundles composed of borrowers whose credit ratings are above 700, subprime bundles which are composed of borrowers between 600 and 700 and junk debt bundles comprised of borrowers whose credit ratings are below 600. Prime bundles bring a higher price than the other two types. These bundles can be tracked through the Edgar system but finding the bundle to which any given borrow has been assigned is almost impossible as far as I know. Most if not all judges are aware of this process and that is why they will not listen to those who raise Gliha type arguments about modern money mechanics and other such junk legal theories.

I doubt that any of them ever did work. That's just my opinon, of course and I have no proof to back that up.

Quite frankly I doubt that.

That used to happen much more than it does today. Debt collectors also get smarter as time goes on just like some of us do.

I'd say that is all very true.

That is also very true but getting the average person to understand that and the possible consequences of ignoring dunning letters is a task that will probably never get done. Most people are not willing to spend the time to learn until it is too late and most are scared to death of going into any kind of courtroom. Getting them to go to court and stand up for their rights is about like trying to pull the molars out of a live wild bull elephant. Not many would try it.

 

Thta is where Gliha is going there - trying to ascertain the "TRUE LOSS" after all reimbursements and tax benefits are factored in. What Gliha doesn't seem to comprehend is that, from an accounting, legal and tax standpoint, no Insurance reimbursement, tax benefit or other benefit can be used as an offset by the debtor. When the creditor collects the account, it is merely recorded as income to offset the benefits previously recieved.

There are none is the response to the first statement and I doubt it is my response to the second. Remember - Gliha was trying to sell something with these claims.

Why am I not surprised, since this is what I have been saying all along - that the Gliha letter is basically useless.

You missed the third and much more likely possibility - that the CA's (with their Corporate Counsels) aren't as stupid as John Gliha wishes they are.

I have been advocating for a long time the importance of not being afraid to not only threaten a suit but to carry it out, especially on the small "nuisance" debts - because the creditor is much more likely to give in that fight, especially when the amount they are being sued for exceeds their own claim.

I believe the attorney was referring to answering a summons, not Validation.

That should be Standard Operating Procedure for all consumers receiving letters from CA's or JDB's. An Answer, Defenses, Counterclaims and Discovery Demand should be SOP for any consumer receiving a Summons. I am sure you have read those words from me elsewhere.