CA violation Question clarfication?

Are you saying that you sent a validation letter to a CA, disputed the collection account with the CRA, and the CA came back to the CRA and verified the account, however, they have yet to provide you with validation? -If so, then yes, that is a violation under the FCRA section 623 and the FDCPA section 809. There is also a FTC opinion letter out there that refers to the CA leaving the collection account on a consumers report is considered continued collection activity.

 

Actually, the way I understood the opinion letters to read, they can report it in the 30 day period and if it is already reported, they don't have to delete it if a consumer requests validation, BUT they cannot verify it or re-report it unless they have provided validation. The burden is on the consumer to dispute it.


L

 

Take a look at section 2 of the FTC opinion letter.

According to this, the CA needs inform the CRA that the account is disputed by the consumer, and they need to place on the account something like "consumer disputes".



Dear Mr. Cass:

Mr. Medine has asked me to reply to your letter of October 28, 1997, concerning the circumstances under which a debt collector may report a "charged-off debt" to a consumer reporting agency under the enclosed Fair Debt Collection Practices Act. In that letter, you pose four questions, which I set out below with our answers.

I. "Is it permissible under the FDCPA for a debt collector to report charged-off debts to a consumer reporting agency during the term of the 30-day validation period detailed in Section 1692g?" Yes. As stated in the Commission's Staff Commentary on the FDCPA (copy enclosed), a debt collector may accurately report a debt to a consumer reporting agency within the thirty day validation period (p. 50103). We do not regard the action of reporting a debt to a consumer-reporting agency as inconsistent with the consumer's dispute or verification rights under § 1692g.

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.

III. "Is it permissible under the FDCPA to cease collection of a debt rather than respond to a written dispute from a consumer received during the 30-day validation period?" Yes. There is nothing in the FDCPA that requires a debt collector to continue collecting a debt after a written dispute is received. Further, there is nothing in the FDCPA that requires a response to a written dispute if the debt collector chooses to abandon its collection effort with respect to the debt at issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1032 (6th Cir. 1992).

IV. "Would the following action by a debt collector constitute continued collection activity under § 1692g(b): reporting a charged-off consumer debt to a consumer reporting agency as disputed in accordance with § 1692e(8), when the debt collector became aware of the dispute when the consumer sent a written dispute to the debt collector during the 30-day validation period, and no verification of the debt has been provided by the debt collector?" Yes. As stated in our answer to Question II, we view reporting to a consumer reporting agency as a collection activity prohibited by § 1692g(b) after a written dispute is received and no verification has been provided. Again, however, a debt collector must report a dispute received after a debt has been reported under § 1692e(8).

I hope this is responsive to your request.

Sincerely,

John F. LeFevre
Attorney

 

I must have misread your previous post...sorry. I thought you were saying that they had to delete it from your credit report if you disputed it with the CA.



L

 

That's okay

 

Sounds to me like you have violations against all 6 CA's.

Updating a collection account during the validation process without providing validation is a violation.

If you send validation to a CA, get the green card back signed, dispute with CRA, and the CA verifies to the CRA the collection account is indeed correct, and they do not provide adequate validation (or any at all) to you, those are violations as well.

I suggest setting up estoppel letters for each CA and outline each of their violations in your letters.

 

whyspers,

I re-read my previous post, and I see how I might have gave off the impression I was referring to the CA having to delete the account, rather then just placing it in "consumer disputes".

According to the FTC opinion letter, (at least the way I read it), within the initial 30-day timeframe the CA cannot leave the collection account on the consumers report if they receive a validation request within those first 30 days. After the 30-day timeframe, if the CA receives a validaton request from the consumer, they are not required to remove the account from the credit report, rather place a note on it that it is in dispute.

So to sum that up:

1-30 days, CA receives validation req. / must delete collection account until such time they can supply proper validation.

31-??days, CA receives validation req. / must place account "in dispute" with CRA(s).

 

Nope.

Even if it's past the initial 30 day window, and you send the CA a validation request, they are required to provide you with proof (they just don't have to automatically delete the collection account). By simply not updating the account means nothing. In fact, once you have the signed green card back, they are (per the FTC letter posted above) required to notify each CRA that you, the consumer disputes the account. So by not doing that alone is a $1k violation.

Of course, if you're running into a stubborn CA, and they have not noted the account as in dispute, and they have ignored your validation request, estoppel letter, intent to sue letter, etc., then you probably have no choice but to file your lawsuit against them.

And, if the debt is relatively small, and you have enough violations against them to build a house, they'll settle with you without you having to go to court.

 

Did you try the nutcase letter? Why not ask them to quote which law they would be violating by reporting your information. Tell them you are preparing a lawsuit against them and that if they can supply the law you would reconsider. If they can't then you will be using their last erroneous correspondance as evidence of another willful misrepresentation. They never can quote the law that prohibits them from removing. I hear this STUPID one all the time.