Hi Gang, What is your interpretation of what is meant by the following provision?; FDCPA § 807. False or misleading representations [15 USC 1962e] A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt. Without limiting the general application of the foregoing, the following conduct is a violation of this section: (12) The false representation or implication that accounts have been turned over to innocent purchasers for value. Experts???
Scenario: CA attempts to collect on a debt. Consumer requests valdiation. CA is unable to provide it, and realizes collecting on this debt will be difficult if not impossible. CA, instead of sending consumer validation, sends a letter or makes a call to the consumer advising them that if they do not pay, the CA will go ahead and (re)-sell the debt to another business, they (CA1) will just get their money for the debt this way (by selling the debt), and the consumer will be forced to deal with another CA, and also have to endure having two CA entries on their report for just one account. Now of course they would have to be lieing about doing this. And in most cases I think that would be true. CA's don't just go transferring debts on a whim, they like to hold out hoping the consumer will cave. Does this make sense? Or am I just reading that provision completely wrong?
That was my interpretation too MC, But when ca1 sells to ca2 ALL the pertinant documentation must go with it. INCLUDING your validation demand. Therefore, if ca2 reports the debt that is a violation, (continued collection activity). Because this happens so often I think we would be wise to develope a strategy to deal with it.
(12) The false representation or implication that accounts have been turned over to innocent purchasers for value. If a false representation or implication is illegal then actually doing it must be worse. If you were CA2 wouldn't you be pissed if CA1 sold you a NONperforming, dead debt that is frozen by a val demand? Boy I would!!! In fact CA1 just stole money from CA2. More often than not I think CA1 sends the debt back to the OC and then the OC sends it to another CA. WE NEED AN APPROACH FOR THIS! I'm sick and tired of 3-4 different CA's listing the same debt. There outta be a law. lol
I had always interpreted "innocent purchaser for value" to mean that the CA implied that they were some sort of successor entity who purchased the A/R of the original creditor (e.g. Smith's department store has bought out Jones department store) and not simply a CA. Some CA's use multiple names and company names that are so vague it's almost impossible to tell what they really are. I can see the other interpretation as well. More opinions on this one? Greg
That's just it, CA1 may not be including the consumers validation demand. Just because they are supposed to send all pertinant documentation to the new buyer (CA2), doesn't mean they will. There's no way for us to know for sure whether they are.
But only one CA can ever be the one authorized to to collect, right? I mean, it seems CA's just don't follow through and delete their collection listing once they give back the account. For this they SHOULD be held accountable, I can certainly agree with that. Actually, I think what I would like to see most is that a CA can not place a collection account on your CR until they have may a dilligent attempt to contact the debtor and get the account paid. I would like to see it be unlawful to report to a CRA until you have mailed a demand for payment to the last known address of the debtor. Wouldn't that be nice?
True, in most cases the debt is returned to the OC. It is the OC who then feeds the debt to another CA thus a second collection tradeline is born (this in additional to whatever the OC is reporting themselves). Too bad there isn't a FTC opinion letter on this!
That brings up my next question. Where is it required that they remove their derog when they return the account?
This already IS illegal. They must notify you within 5 days of intinitial contact. Sometimes intitial contact is the placement of the derog onto your CR. Actionable in my opinion.
