The court held in Spears v Brennan that even a signed contract provided in the validation process is not enough to constitute sufficient verification of a debt. Here is the link: http://www.ai.org/judiciary/opinions/archive/03260101.ewn.html Read issue 4. I would like to open this for discussion with members of the board. Please provide insights, opinions etc.
Wonderful! I'm copying it here because it's so beautiful to read! Issue Four: Failure to Cease Debt Collection Finally, we address Spearsâ?? claim that Brennan violated 15 U.S.C. § 1692g(b) when he failed to cease collection of the debt after receiving Spearsâ?? written notification, within the thirty-day debt validation period, that Spears was disputing the debt. 15 U.S.C. § 1692g(b) reads: If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. 15 U.S.C. § 1692g(b) (emphasis added). On November 12, 1996, nineteen days after the date of Brennanâ??s debt collection letter, Spearsâ?? counsel Shepard sent Brennan a letter declaring that Spears â??disputes your debt collection-related allegations, denies the same, and demands strict proof and verification thereof.â? Record at 21. As such, Brennan should have ceased his debt collection efforts immediately upon receiving that letter. Instead, Brennan proceeded to obtain a default judgment against Spears on the debt collection claim before he had mailed Spears the necessary verification and, thus, violated 15 U.S.C. § 1692g(b). Brennan maintains, however, that there was no violation of the FDCPA because he â??sent adequate verification of the debt [to Spears] in the October 30, 1996 notice of claim.â? Brief of Appellee at 13. Specifically, Brennan claims that a copy of the consumer credit contract between Spears and American General attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. § 1692g(b). We cannot agree. The contract in no way provides sufficient verification of the debt. A review of the document reveals that it identifies only the terms of Spearsâ?? loan, including a 17.99% annual interest rate and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments. Indeed, the existing unpaid contract balance at the time Brennan sent the debt collection notice was at least $350.00 more than the original loan amount. Therefore, Brennan violated 15 U.S.C. § 1692g(b) when he failed to cease collection of the debt by obtaining a default judgment against Spears after Spears had notified Brennan in writing that he was disputing the debt but before Brennan had mailed verification of the debt to Spears. See footnote We reverse the trial courtâ??s entry of summary judgment in favor of Brennan on this issue
Isn't it great! However, what does that mean for all of us who have been requesting a signed contract as proof of validation in or letters? Any ideas guys. C'mon this is good stuff.
Wow! Killer - you beat me to it. I was gonna paste that exact section here. This almost seems too good to be true! Is there any other way to interpret this?
It's clear and it's great and I can't get enough. I keep reading it over and over. We all need to strategize now!!
One caution guys. This is an Indiana Court decision that swings great weight in Indiana. It has no force of law anywhere else. Now, you or your lawyer may certainly include the case in your pleadings in other states but, it will be up to the individual judge as to how much weight to give the case.
After reading it a few times, it makes sense. What good is an original signed contract? The original contract just lists the original amount - it does nothing to validate the additional fees, etc. I think this would hold up elsewhere.
So what would be the next logical step? Now that we have this info, those of us who want to use it and I will use it where do we go from here?
A contract only shows the original status, it does not and can not indicate the current status in any way.This is a fact in Indiana or any other state.
I plan to include a reference to this case in future validation requests. It might not carry a tremendous amount of weight in states outside Indiana however this, along with all the ammo we already have, could make the CA think long and hard about ignoring a request. This helps them also realize that they must furnish undeniable proof of debts.
So then, what you are saying is that you would need the original signed contract - showing who opened the account. And, the accounting of the account - showing how the balance became so large and what fees was added and when the individual made payments. I am a little confused. An original creditor sent me the statements showing when the account was current until it was charged off. My request is the original app., tihs is not my account because I never opened it - I need proof. So looking at this ruling I am assuming that they have met the threshold of what is needed to constitute that the account is mine. Without sending a copy of the original app. because they sent an accounting of the account. Is the big difference, the fact that it is the original creditor and a ca? If so, I may have to rescind my intent to sue notification.
No, your suit is still good. What this says is that the signed contract alone is not enough. They must include the account history if they are trying to collect more than the original amount. So, if a CA is trying to collect interest and fees on a debt, the validation must include not only the signed contract, but also and accounting of the fees, interest and other charges that are being added. LOL, then each time they change the amount, they owe you another validation?? Tee Hee.
No. In order to satisfy validation they must send the original signed contract and all of the accounting statements on the account. If they have not done this and just sent one or the other or some combination thereof they have not provided validation.
Re: A signed contract is not enough Note to newcomers: There is much more information on this board regarding the Spears v. Brennan decision as well as much debate and discussion regarding what constitutes an adequate validation. In other words, waiting for the old-timers to post comments to this thread may not be as useful as searching for those discussions that already took place. Here are a few keyword-search suggestions: -- adequate validation -- validation adequacy -- Lizardking validation -- Spears -- Brennan Enjoy! Doc
Re: A signed contract is not enough o.k thanks will do. Any other helpful responses not already covered is welcome.
The Indiana court of appeals is one of the most respected appellate courts in the country. This ruling was based on federal law. The fact the court is in Indiana makes no difference. Spears v. Brennan is a great cite.
It's like someone read my mind! I am in a similar situation. I sent a validation letter for an old insurance policy and received the original signed contract. However, I am not denying that I had the policy - I just don't owe them any money. The policy expired and was paid in full (monthly payments) - if it wasn't my insurance would have been cancelled for non-payment of premium - duh. And I even renewed after expiration. So this makes sense. I want an accounting of this policy and now I have something to back up my request.
One other caution. What finally happened? The appeals court reversed the summary judgement and told the lower court to give the guy a trial. Did the defendant win at the new trail? Was a trial even held? Settled out of court? I think you need to know the final outcome before you use the cite.
In conclusion the court "found as a matter of law multiple violations..." The case was remanded to the trial court for a determination of damages in accordance with the FDCPA. The collection notice and the timing of events surrounding it were also an issue for the trial court. How that was resolved I have no idea. Spears v. Brennan is a solid case to cite in many respects.
The contract establishes owner ship. The accounting establishes the amount due if any,and then only if the accounting is proper,complete and correct.
