Does lawsuit ever equal deletion?

I am trying to help a relative get a tradeline removed from her report and the CA refuses to budge.

Basically, since she paid her car insurance in cash through a drop box after-hours, she can't prove she made her last payment even though she claims she did.

We disputed their tradeline through the CRA 6 times and each time they have verified. We complained to the BBB of our state and their state and they replied the same way to both, "If she paid, then show us proof. Send us a letter showing when you joined the new insurance company. If you joined before the period in which we claim you owe us, we will remove the tradeline."

Obviously, we can't do that because she did have insurance with them during the period they are trying to collect from her. The problem is they claim they didn't get payment and she claims she gave them their payment.

We also complained to the AG of their state and ours. And, we submitted BBB and AG complaints against the original creditor (the insurance company) in both our state and theirs. And lastly, we submitted BBB and AG complaints against the company that owns the insurance company in both our state and theirs.

The reply is always the same. The amount remains past due unless you can prove to us otherwise. It is impossible for us to do so.

But, they have racked up numerous violations here.

1) The CA verified their tradeline four times before obtaining any kind of original account records (which includes an old out-dated contract that expired one year before the period in question and pieces of paper which have a date and number which is suppose to signify their receipts of each payment). With that kind of evidence, I feel like sending them a peice of paper with her signature, a date, and the payment amount as our proof she paid.


According to the court case of FTC v. Performance Capital Management:

11. Section 623(b)(1) of the FCRA requires furnishers of information to consumer reporting agencies to conduct an investigation when a consumer reporting agency forwards to the furnisher a notice of dispute in accordance with the provisions of Section 611(a)(2) of the FCRA, 15 U.S.C. § 1681i.

12. At the present time, PCM receives notices of dispute from consumer reporting agencies in the form of written consumer dispute verification forms. When PCM receives consumer dispute verification notices, it is the practice of PCM to compare the name, address, and information in PCM's computer database with the information provided on each consumer dispute verification form. Where the two match, PCM reports that it has verified as accurate the information in its files. The actual records of the original creditor are not reviewed, nor is the matter referred to the original creditor for the original creditor to verify the accuracy of the information.

13. Because PCM collects accounts that are often old, information in its computer files may not be accurate for a variety of reasons, including incorrect updating of addresses, errors in recording names and information, and problems with the original creditor's records. Accordingly, verifying information in the computerized PCM file does not constitute an "investigation" for purposes of Section 623(b) of the FCRA when a consumer disputes the accuracy of the information.

14. The acts and practices alleged in Paragraphs 12 and 13 constitute violations of Section 623(b) of the FCRA, 16 U.S.C. § 1681s(b).

2) The CA failed to update the account as disputed for 90 days. It took us three letters (each notifying them that they failed to update the account as disputed) before they actually updated it as disputed. According to the same case:

15. Section 623(a)(3) of the FCRA provides that if the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed by a consumer, the information must be noted as disputed. This provision does not require disputes to be in writing.

16. In numerous instances, consumers have informed defendant over the telephone that they dispute information furnished by the defendant to a consumer reporting agency. It is the practice of the defendant to inform consumers who report disputes orally that they must dispute the accounts in writing. The defendant does not report oral disputes to the consumer reporting agencies to which it furnishes information.

17. The acts and practices alleged in Paragraph 16 constitute violations of Section 623(a)(3) of the FCRA, 1681 U.S.C. § 1681s-2(a)(3). Pursuant to Section 621(a) of the FCRA, 15 U.S.C. § 1681s(a)(1), the acts and practices alleged in Paragraph 13 also constitute unfair or deceptive acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a).

So, even if this debt was valid and even if they had a signed affidavidt from her saying "I ADMIT THIS DEBT IS MINE," the above violations have already occured and cannot be changed.

My question is this though:

Because our main goal is deletion and they refuse to delete, even if we sued and won, could this win be used in anyway to get a deletion?

The only way I can think of would be to forward the judgement to the CRA and hope that they remove it but I know they won't because they will simply forward it to the CA and they will again verify it.

We were also going to go after the OC afterward because the OC has violated the FCBA. According to the FCBA, they must give us the opportunity to dispute the debt directly with them by contacting them at the billing disputes address on the back of the bill. She has never received a past due bill from them. So we wrote the OC three times asking them for a copy of the past due bill which shows the address for billing disputes so she could exercise her right under the FCBA to dispute the debt. They ignored all three letters (dispite each one being signed for).

Although we did communicate twice via fax regarding the dispute, according to the FCBA, for the dispute with the OC to be valid, it must be in writing and it must be physically sent to the address on the back of the bill for billing disputes so even though they replied to our dispute via fax, I don't think that would justify following procedure under the FCBA since we have yet to write them at their billing disputes address (we don't have a bill and they refuse to send us one).

According to the FCBA, "Any creditor who fails to follow the settlement procedure may not collect the amount in dispute, or any related finance charges, up to $50, even if the bill turns out to be correct."

Since they are not following settlement procedure, they can't collect, if they can't collect, they can't send it to a CA, if they can't send it to a CA, the CA can't list it with the CRA.

But again, even if we went to small claims court and won against the OC, that still, I don't think, would guarantee a deletion. It would just guarantee that she would never have to pay them the money they are requesting.

So, now, I'm thinking, maybe we should sue the CRA for failing to maintain "maximum possible accuracy." As one court case put it, if the CRA knows information it is listing is inaccurate and the consumer has informed the CRA of this, the CRA must then take steps to rectify the inaccuracy themselves regardless of what the CA states.

If the OC can't collect but the CA continues to verify it, the CRA must then remove it (which they refuse to do).

What do you think would be the best way to get a deletion?

Oh, BTW, up to this point, we have not been disputing the debt as "She paid it, you just didn't get it."

We have been disputing it as, "You overcharged us."

She was charged a new 6 month premium every 6 months and she paid on that premium monthly. Their calculations on how much she owes is only correct assuming that she was charged the correct 6 month premium.

Since we can't prove she paid her last payment (since it was in cash), we have been stating she was over-billed on her 6 month premium. If this is true, then no number derived after that is valid and if that is the case, they can't be sure how much she is past due and therefore can list nothing on her report since it wouldn't be entirely accurate.

We stated, "If she was not over-billed, please send us a contract showing that she agreed to the 6 month premium that you charged her. As it stands, due to a billing error, she was over-billed on her 6 month premium leading you to believe she is past due." They have no contract whatsoever to show she agreed to the amount they charged her (only an outdated contract from years previous).

If no contract exists, no debt exits under the FDCPA. Despite this, they completely IGNORE the lack of a contract and say "No contract exists because since you continued to have insurance with us, the contract automatically renewed."

This is funny because the contract itself says right on it when it expires and it expired a long time previous to the timeframe in question. Further, the 6 month premium she agreed to on the contract is hundreds of dollars less than the last 6 month premium they charged her despite her not having any tickets, not changing addresses, etc.

Actually, by their own admission, she was over-billed. If the contract automatically renewed itself, that means the premium would be the same and since it is not, she was over-billed.

Should we continue down this track (she was over-billed)?

What is your recommendation on the best way to get a deletion?

 

1) You are right! That is a very stupid way to pay. I would never pay that way and probably 99% of the people on this board would never pay that way. But she pays for everything in cash because she works in an environment where she gets paid cash each day. There isn't much I can do about that. But I couldn't agree with you more!

2) Normally, yes, the burden of proof is on the plantiff. However, when it comes to a debt, under the FDCPA, no debt exists unless the CA can prove it through validation. A contract must exist between the consumer and creditor.

There is no contract that exists giving the OC the right to charge her the amount they did. It is the responsibility of the CA to prove the debt exists in order to list it with a CRA. If they can't definitively show the debt exists (ie. they can't validate), they can't list it. If they list it, they are reporting incorrect info and therefore breaking the law.

I could see if we were suing them for the difference between what she paid and what she was suppose to pay or for a refund of the last payment but we are not.

In either case, yes, the burden would be on us. But, to sue them for continuing to list the tradeline without being able to validate is a different story since they then have the burden of proof to show they validated.

We can easily prove they didn't validate by showing that they have no contract giving them the right to bill the amount they did.

We are suing them for violations of the FDCPA and FCRA.

And, although, as you state, in small claims you can't sue for deletion, I was hoping that someone may be able to provide us some insight on how we could somehow use the win for deletion.

3) Although an excellent idea, we tried that about 8 months ago. The debt is very small ($100) and therefore they could care less whether or not they get the money. They just want to ruin her credit. We made the offer that she would pay in exchange for deletion. We also very clearly stated, in the same letter, that her decision to pay was not an admission that she owes it but rather an attempt to reach an agreement beneficial for both parties. They get their money they claim she owes and she gets a deletion.

However, that actually backfired because now, every complaint we have filed against them, they state, "She owes the money and she knows it. She even tried paying us off to get the account removed. She does not understand that paying this debt will not erase it from her credit report. We cannot remove accurate information from her report. We can only update the status to paid."

They are implying that she admitted she was wrong and tried to pay them off when actually, we clearly stated that was not the case in the letter.

They are not the brightest CA (a small mom and pop operation with two employees...husband and wife). The problem is, because they aren't bright, they will most definately try to fight us in court and will not fold once they receive the suit.

They are very ignorant of the FCRA and FDCPA.

They don't understand that, regardless of what evidence they have, failing to delete their tradeline during the 30 day verification period by the CRA without original account records and failing to mark the account as disputed are undisputable violations of the law.

They continue to believe that, because they have an old outdated contract and pieces of paper with a number on them and a date, they are safe.

Even if you would consider what they have, at this point, validation, if we just sued for failing to mark the account as disputed and for continuing to verify the accuracy of the account without checking the account info with original account records (they verified the account numerous times before having any records whatsoever), I don't see any way they could win.

But, that then brings me back to my original point which is, even if we did win, that wouldn't get a deletion so what would be the best way to get a deletion (go after the OC directly, go after the CRA directly, go after all of them, etc).

 

Re: Re: Does lawsuit ever equal deletion?

Thank you for the info. I guess we can always bring it up at the hearing and say:

Because, according to previous case law, the CA had to delete this tradeline on numerous occassions (before they had any original account records of any kind), we request that they also delete their tradeline immediately.

If they wish to continue persuing the debt, they can but they were required to delete it from the credit file.

They willfully and purposely chose not to delete even though they had no original account records because they knew, if they did delete, the CRA would permanently ban that tradeline from re-appearing so, in order to avoid this from happening, they continued to verify it.

We consequently ask that this tradeline be deleted.

The worst the judge can say is NO, we don't do that in this court. I don't think going to a higher court would be an option for her since she doesn't really know what is going on.

But, I don't know, maybe sending the judgement to Experian showing we sued and won against the CA may help persude them to delete it?

 

Re: Re: Does lawsuit ever equal deletion?

It is Citizens Insurance (owned by Allmerica Financial).

The collection agency however is not the insurance company. The insurance company assigned the CA the debt.

I don't think they will work with us though because now they are just ignoring our letters all together due to the complaints we have filed and intent to sue letters.

Because the debt is so small, I really think they could care less about it. I am just hoping by first suing the CA, then the OC, then the CRA, somebody, along the line, will fold and just delete.

Everyone acts tough when you threaten to sue but things tend to change when they receive the lawsuit.

 

Re: Re: Re: Does lawsuit ever equal deletion?

We are claiming overcharging because, by their own admission, the only contract that exists states the amount for her 6 month premium is less than the amount she was charged.

Although this contract expired long ago, they claim it continued to automatically renew.

Therefore, she was overcharged since the amount stated on the contract for a 6 month premium is less than what they billed her.

Unless, they want to say the terms changed which, in that case, means the original contract did not automatically renew and if it did not, no contract exists in which case we maintain we were overcharged and they can't prove otherwise.

 

Re: Re: Re: Does lawsuit ever equal deletion?

Yes, everytime we attempt to contact the agent, they just forward our letters to the insurance company since the agent really has nothing to do with the matter. It is the insurance company that is trying to collect.

The only thing the agent did was supply the insurance company with the billing history and payment history (along with the old out-dated contract from years ago).

My next step, I think, when we go after the insurance company, is to write the agent a letter asking do you or do you not have a contract that justifies the amount you billed for your 6 month premium on XX/XX date.

If they ignore it, then we can subpoena them to appear in court which case they will say no contract existed (since all paper work was done with the agent). If they don't have a contract, nobody else does either.

If they say no contract exists in a letter back to us, they just admitted they have no justification of the amount they billed and therefore that means the insurance company can't validate the debt.

All over a $100.