CA suits before "validation"

Discussion in 'Credit Talk' started by Squawk1200, Jun 4, 2001.

  1. Squawk1200

    Squawk1200 Well-Known Member

    In another thread, Anthony said that he believes that a CA could violate the FDCPA by filing suit before the 30-day period for a consumer to request validation has run. He invited further discussion in another thread, which I am now starting.

    I haven't done a lot of research on this issue, but, off the top of my head, I'm not sure that filing a suit itself could be an FDCPA violation (filing in the wrong venue, however, is). Certainly, a threat of suit in the initial contact that "overshadows" the required validation notice is a violation. But filing a suit? I'm interested to know under what circumstances courts have found the filing of a suit to be a violation, or which section of the FDCPA such a suit would violate.
  2. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    Admittedly I was being a little provocative in the prior post you mentioned, hoping to promote a discussion of the issue. Others and I had discussed the matter in the other thread, albeit this one is just as good a place as anyâ?¦ Oh well, be careful what ya wish for so they say. [;-)

    Nonetheless in a strict sense, filing the suit itself is not a violation of §809, Validation Notice. Filing and serving the summons & complaint is another matter altogether, yet no cases have tested this aspect yet â?? that Iâ??m aware of â?? but I suspect eventually one shall. Irrespective it is a widely held contention in the collections biz, that litigation should not be engaged during the 30-day validation period.

    That holds especially true if the time to answer happens to be shorter than 30-days, as in a state where 20-days is authorized. Itâ??s my (personal) opinion that were a case filed and served, where the answer period is shorter than the validation time (i,e, 20-days), an argument could be made that rights under §809 (FDCPA) have been subverted.

    Truly most agents will not actuallyseek to litigate during the validation time. For one thing it is far too expensive without allowing any due diligence, and another collectors are greedy. A good collections manager will encourage his/her crew to make every attempt to recover well before litigating is even considered.

    Threatening a lawsuit within the 30-day period is far more common, telephonic threats being the most pervasive! So such so that a great number of consumers are intimidated into paying, well within the validation period. I have a few personal friends in upper collections management, who know that their people are doing this yet turn a blind eye. Oh well, IMHO, they are playin with fire! But there is always that thing called, plausible deniability which may be what theyâ??re counting on.
  3. godaddyo

    godaddyo Well-Known Member

    Is there a difference when the original creditor sues in comparision to when the collection agency sues? If the creditor was not making any real collectin attempts and just decided to sue, would they be held accountable under the FDCPA? I already know that collectors and attorneys acting on the behalf of the CA can be held responsible.. Any thoughts?
  4. Crdt Dfnse

    Crdt Dfnse Well-Known Member

    In a word, yes. However, one must keep in mind that many states carry almost identical statutes as FDCPA but relate to original creditors (such as Californiaâ??s CC §1788, for instance). Nonetheless it is common and customary for original creditors to engage more due diligence, before resorting to litigation. There are many reasons for this, most having far more to do with customer/public relations than legal affect.

    And for those who may not understand collector-speakâ?¦

    Due diligence: In part meaning to attempt recovery by every available good-faith means, excluding litigation. Some good faith measures are: phone calls, letters, offering discounts, etc.; anything reasonable that resolves (or tends to resolve) the delinquency.

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