This may be posted somewhere, already, but if not, I'd like to clarify the FDCPA process of LEGAL debt collection by a 3rd party. I'm just going from memory so if you have some suggestions or corrections, please post them. 0) the CA/JDB gets an account (maybe its yours, maybe not, the point is that it doesn't matter at this point). 1a) they first contact you by phone what's the best thing to do? Get their name and address? Certainly you don't want to tell them anything... or do you? If they contact you by phone, then in 5 days you should receive a letter that explains the debt and your rights. 1b) they first send you a letter. If this is your first contact, the letter should have all the required disclaimers and information. 2) Send the dispute and "inconvenience" letter within 30 days of your first contact (be it by phone or by letter) and send it CMRRR (Certified Mail/Return Receipt Requested). This must be done within 30 days whether you recognize the debt or not. Even if you recognize the debt, you don't know if the CA has any right to collect it. 3) After you get the post card from #2, get your credit reports from all three credit bureaus (or a credit monitoring service if they offer daily updates. Check to see if the collection is being reported. It shouldn't be. If it is, dispute it with each CRA that is reporting it. Keep detailed records of your dispute. Dispute by mail, if possible (better for tracking, but slower) Disputing by internet is probably OK at this point but you run the risk of not leaving a solid paper trail should you decide to go to court later on. If you do dispute by internet, take screenshots of all the pages that describe the dispute. You should not be contacted by any CA/JDB until you get validation from the CA. Remember, validation only has to be a description of the debt from the OC that is forwarded by the CA, not some long detailed accounting as some web sites say. The details in bold are very important and must be followed to the letter, as per the FDCPA. 4a) If you get validation, then you need to decide how to pay or settle this. At this point, they've met their end of the deal so they can call you and send you letters all they want (short of harassing or threatening you, of course). If you can't pay, then that's what you'll have to put up with. If you can, some options are pay-for-delete (i.e. pay and don't ever update the tradeline) or to try and settle for less than the balance claimed (if you're a decent negotiator. Others? If the CA didn't follow the rules, you might have grounds for a suit/counter-suit for FDCPA violations. 4b) If you did not get validation and they are still reporting on your credit report (i.e. they verified it after you disputed it), then get ready to go to court and sue them. That's your only viable option. There's a slim chance you might be able to talk them into removing it, but there's also a slim chance you'll win the lottery. Better odds of getting some money from them if you just go straight to court. In many cases, you'll become more trouble than you're worth and they'll pay you to go away. For every one informed citizen willing to stand up for their rights, there are 100 who'll just send money when they are called by the CA so the odds favor them forgetting you and going on to the next sucker/debtor. 4c) If you do not get validation and they are not reporting it, then you may never hear from them again, or you may hear from another one and the process starts all over again. If you get another letter or a phone call from a new CA, then you're back at step 1 and you need to repeat all the subsequent steps with the new CA/JDB. If you never hear from them and they never report it, then there's not much else you can do but wait. Maybe it'll show up again, maybe it won't. Bottom line: as the economy tightens, the CAs and JDBs are going to have a much greater and much cheaper inventory of debts to be calling on. So, whether or not you have an unpaid debt or just have the same name as someone who has an unpaid debt, you can never be sure that they won't be calling you. For that reason I just wanted to summarize the "short form" of the steps so people can be ready for that phone call.
Bob, great info. What exactly must the validation contain? If it only needs to be a description of the debt from the OC, then if they send something that simply states the name and addresss of the original creditor, date account was opened, date it was charged off, and amount owed, is this sufficient? What if the amount owed is several thousand dollars more than what it was when the account was charged off? (In other words, I would disagree with the amount they say I owe.) What is the next step?
You will have to accept their version of the validation. If you refuse to pay and they haul you into court you could then argue that the validation/their proof is incomplete/flawed - and hope that you get a consumer friendly judge, and not a creditor friendly judge.
That's depressing. If a debt was for, say, $1000 when it was charged off, and now the debt buyer / CA says the debt is for $4000, there is no recourse except to hope that a judge likes you?
