Litigous Nutcase Letter?

Your best bet would be if you could document some FCRA violations. As you probably already know, the "nutcase" series is for paid collections. It's effectiveness is based on the premise a company would rather delete an entry than spend money defending something they have already collected on. If the OC hasn't violated the FCRA in how this is being reported, you don't have much leverage.

Gib

 

I would go to the Credit FAQ at the top of page and find the entry that talks about the nutcase. It will refer you to many past posting about it's use.

You can ask for validation at any time. In retrospect, you should have validated this debt before you ever talked to the OC and tried to negotiate anything. If I were you, I would stop talking to them, send the validation letter, try to get them on some violation, get some leverage and THEN try to negotiate with them again. This time you won't be aimlessly begging them for deletion.

Was the DOLA on this 1996? That means is should be falling off next year. How much is it for? You need to think of all of these thing before settling for anything less than deletion. It won't do you very much good to have this listed as paid or settled, because that's just as bad as owing the full amount.

Let us know some more specifics and we might be able to help more.

 

Just as a point of clarification, I wrote the litigious nutcase letter as a method for dealing with FULLY PAID creditors with VERY LATE pay history, lol. In other words, this would be a technique for attempting to clear your credit reports of the negative tradeline after you've repaid the debt. If you read through the letter, it references "tradelines associated with this alleged debt" or something of the sort. That said, some have had success using the nutcase sequence for fully paid chargeoffs (but, still, not for UNPAID chargeoffs).

The principal tactic used to challenge allegedly still-owed debts is validation, followed by estoppel, etc. Unfortunately (or fortunately, depending upon your frame of reference), I have no experience dealing with disclaimed unpaid debt, so I'll defer to the experts here to help you further.

Doc

 

I would do a search on dealing with Discover. There is lots of info on the board on how they deal with validation and negotiation.

You should definitely do the validation route. If they don't delete, what good is that going to do you?

 

You can ask for validation, but the OC does not fall under the rules of validation of the FDCPA. The only violations you can nail them on fall under the FCRA and FCBA.

Gib

 

If they are reporting, they have to abide by the FCRA. The FCRA says that you can request validation.

 

Please show in the FCRA where it says that an original creditor must provide "validation" to a consumer.

Gib

 

I do believe an OC is a furnisher. Correct me if I'm wrong



§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15
U.S.C. § 1681s-2]

(a) Duty of furnishers of information to provide accurate information.

(1) Prohibition.


(A) Reporting information with actual knowledge of errors. A person shall not furnish any
information relating to a consumer to any consumer reporting agency if the person knows or
consciously avoids knowing that the information is inaccurate.

(B) Reporting information after notice and confirmation of errors. A person shall not furnish
information relating to a consumer to any consumer reporting agency if

(i) the person has been notified by the consumer, at the address specified by the
person for such notices, that specific information is inaccurate; and

(ii) the information is, in fact, inaccurate.

(C) No address requirement. A person who clearly and conspicuously specifies to the
consumer an address for notices referred to in subparagraph (B) shall not be subject to
subparagraph (A); however, nothing in subparagraph (B) shall require a person to specify
such an address.

(2) Duty to correct and update information. A person who


(A) regularly and in the ordinary course of business furnishes information to one or more
consumer reporting agencies about the person's transactions or experiences with any
consumer; and

(B) has furnished to a consumer reporting agency information that the person determines is
not complete or accurate,

shall promptly notify the consumer reporting agency of that determination and provide to the
agency any corrections to that information, or any additional information, that is necessary to
make the information provided by the person to the agency complete and accurate, and shall
not thereafter furnish to the agency any of the information that remains not complete or
accurate.

(3) Duty to provide notice of dispute. If the completeness or accuracy of any information
furnished by any person to any consumer reporting agency is disputed to such person by a
consumer, the person may not furnish the information to any consumer reporting agency
without notice that such information is disputed by the consumer.

(4) Duty to provide notice of closed accounts. A person who regularly and in the ordinary
course of business furnishes information to a consumer reporting agency regarding a
consumer who has a credit account with that person shall notify the agency of the voluntary
closure of the account by the consumer, in information regularly furnished for the period in
which the account is closed.

(5) Duty to provide notice of delinquency of accounts. A person who furnishes information
to a consumer reporting agency regarding a delinquent account being placed for collection,
charged to profit or loss, or subjected to any similar action shall, not later than 90 days after
furnishing the information, notify the agency of the month and year of the commencement of
the delinquency that immediately preceded the action.

(b) Duties of furnishers of information upon notice of dispute.

(1) In general. After receiving notice pursuant to section 611(a)(2) [§ 1681i] of a dispute
with regard to the completeness or accuracy of any information provided by a person to a
consumer reporting agency, the person shall


(A) conduct an investigation with respect to the disputed information;

(B) review all relevant information provided by the consumer reporting agency pursuant to
section 611(a)(2) [§ 1681i];

(C) report the results of the investigation to the consumer reporting agency; and

(D) if the investigation finds that the information is incomplete or inaccurate, report those
results to all other consumer reporting agencies to which the person furnished the information
and that compile and maintain files on consumers on a nationwide basis.

(2) Deadline. A person shall complete all investigations, reviews, and reports required under
paragraph (1) regarding information provided by the person to a consumer reporting
agency, before the expiration of the period under section 611(a)(1) [§ 1681i] within which
the consumer reporting agency is required to complete actions required by that section
regarding that information.

(c) Limitation on liability. Sections 616 and 617 [§§ 1681n and 1681o] do not apply to any failure
to comply with subsection (a), except as provided in section 621(c)(1)(B) [§ 1681s].

(d) Limitation on enforcement. Subsection (a) shall be enforced exclusively under section 621
[§ 1681s] by the Federal agencies and officials and the State officials identified in that section.

 

You are right, they are a furnisher of information, but it doesn't say anything there about providing validation to a consumer.

Gib

 

Alright, guess you got me there Gib. Gotta Run.

 

Well, let me complicate the discussion. Even though the FDCPA (which addresses "validation" specifically) only covers collection agencies and similar third-party collectors (non DoE student loan guarantors like ISAC, for example), many people have found success demanding validation from original creditors. The reasons are probably unknown, but a few likely possibilities are:

1) The Fair Credit Billing Act (FCBA) requires original creditors to bill correctly. If a consumer contends that something is awry, it is the original creditor's responsibility to ensure its compliance. In this context, it is certainly reasonable for a consumer to demand an accounting of a debt's validity and correctness.

2) The people dealing with such matters at the creditor end sometimes don't fully understand what they're supposed to do when confronted with a consumer demand. This is why I think the nutcase sequence tends to work so well with fully-paid original creditors: the technique rants and raves about the consumer's "lawful" demands, civil rights, consumer protection issues, etc., to the point where they really don't know what federal statute is about to pummel them.

3) Asking a creditor to demonstrate a debt's validity just seems like a pretty reasonable thing to do. "You say I owe you this money, and I'm not sure of that. Please demonstrate that this is true. Thanks."

So, for these reasons, I would have no problem whatsoever demanding that an original creditor validate an alleged debt. In any case, consumers do it all the time and with success often enough to make the endeavor worthwhile. The FairCreditMovement.org website even has example validation letters for original creditors in their paid section; moreover Creditwrench.com pays attention to original creditors as well.

Doc

 

Well said.


Even though I hope I'll never need it--

the famous (infamous?) LNL is one of my prime
discoveries on this website.

It is sooo classic. I've saved it in my files just because it might serve as a template in some completely unrelated matter.

It strikes (IMHO) a perfect tone.

As we know, in (psychological) warfare, all is fair.

 

Good luck and hope it all turns ok.

Gib

 

Well said Doc. Thanks for that clarification. I guess there wasn't anything per se covering it in the FCRA, but many have used OC validation to their benefit.