Validation and Communication w/CA

Discussion in 'Credit Talk' started by DaveLV, May 19, 2001.

  1. DaveLV

    DaveLV Well-Known Member

    I wanted to get the consensus of the board before I take my next step with this situation.

    Many of you know of my ongoing battle with Ford Motor Credit so I'm not going to post all the details here. The summary is my car that was financed with them was in an accident in 1998 and was a total loss. My insurance company didn't pay all the balance of my loan. At the time of the accident my loan balance was about $8,500. My insurance company paid out but never told me there was a deficiency. Ford never said anything to me either for 2 1/2 years.

    In March of this year I got a notice from an attorney trying to collect $2,011 for the balance of the loan. That prompted me to get a copy of my Experian report where Ford was reporting the car as repossessed with an $8,500 balance. The repo is on all three reports.

    I mailed a validation letter to the attorney at the end of March (they have the standard "This is an attempt to collect a debt" on their letterhead). I've heard nothing until today when I get a letter from the attorney that says nothing about my validation letter, but is asking me to call their office to discuss reduced cost settlement terms.

    Here's my question. I thought that once you sent a validation letter, the collector was not allowed to communicate with you any further until they provided validation. Since their first communication with me after I asked for validation was a settlement offer, have they violated the FDCPA?

    In their letter they old me the account would be marked settled. If they had told me the item would be deleted I would just settle and be done with it.

    Do I write them back, ignoring the fact they haven't provided validation and suggest a counter offer (paying them in exchange for deletion), or do I tell them they've violated the FDCPA and restate my demand for validation?

    Thanks everyone.
  2. godaddyo

    godaddyo Well-Known Member

    If your validation letter had a cease and desist contact statement(exept in corresponding about the validation of the debt) and they contacted you regarding anything but validation, now their attorney is also liable for suit as a party to violation of the FDCPA. What idiots they are. I wish my situation was this good. Good luck!
  3. DaveLV

    DaveLV Well-Known Member

    I did not include a C&D demand because I need to have the communication open so I can negotiate removal of the repo. But I believe the FDCPA stipulates that they cannot resume collection activities until they provide validation.

    Offering a settlement is in my mind a collection activity.
  4. godaddyo

    godaddyo Well-Known Member

    By the way I wouldnt try asking for validation again. At this point they will be begging you for mercy. You got a great response and the validation letter already did its job.
  5. DaveLV

    DaveLV Well-Known Member

    One other reason I didn't ask for C&D is that I know that Ford sues people every day. The small claims court calendar for Las Vegas is searchable online. Searching for Ford Motor Credit pulls up something on almost every court day.

    I don't want to get out of paying this if I owe it (and I'm sure I do -- I had crappy insurance and it also had to pay for the other side's car), but I don't want to let them get away with that repo notation. It's simply not true.
  6. godaddyo

    godaddyo Well-Known Member

    Well maybe I should be more detailed. I know that some of the validation letters tell the collectors that they must provide validation and that nothing else is to be communicated. Was your letter more like the Lizard King letter?Date

    Name and Address
    of collection agency

    Re: Acct # 000-000-000-000

    To Whom It May Concern:

    This letter is being sent to you in response to your
    attached letter. This is not a refusal to pay, but a
    notice that your claim is disputed.

    This is a request for validation made pursuant to the
    Fair Debt Collection Practices Act. Please complete
    the attached form and follow its instructions and your
    claim will be processed as soon as this information is

    Please be advised that I am not requesting a
    "verification" that you have my mailing address, I am
    requesting a "validation"; that is, competent evidence
    that I have some contractual obligation to pay you.

    Please also be aware that if any negative mark is
    found on my credit reports from your company or any
    company that you represent, this will result in my
    filing an immediate lawsuit against you and your
    client for 1) Violation of the Fair Credit Reporting
    Act, 2) Violation of the Fair Debt Collection
    Practices Act, 3) Defamation of Character, 4)
    Negligent Enablement of Identity Fraud.

    Pending the outcome of my investigation of any
    evidence that you submit, you are instructed to take
    no action that could be detrimental to any of my
    credit reports.

    I suggest you and <insert name of original creditor>
    get your records in order before I have to target you
    for legal action.

    Best regards,

    <insert your name>

    Cc: <insert name of lawyer>, Esquire

    (note: just make up a name for the lawyer, just let
    them think you did it for good effect)

    Page 2


    Name & Address of Creditor:

    Name of Debtor: ____________________Acct #:

    Address of Debtor:

    Amount of Debt purported to be owed: _________ Date it
    became payable: ___________

    Was this debt assigned to the collection agency or
    purchased? ______________________

    Amount paid if purchased: __________

    Commission for the collection agency if successful
    with assigned debt: _________

    Please attach a copy of the agreement with your client
    that grants you the authority to collect on this
    alleged debt.

    Please attach a copy of any agreement that bears the
    signature of the alleged debtor wherein he/she agreed
    to pay the creditor.

    Please attach copies of all statements while this
    account was open.

    Have any insurance claims been made by any creditor
    regarding this account? yes / no

    Have any judgments been obtained by any creditor
    regarding this account? yes / no

    Have any negative trade lines been reported to any
    credit reporting agencies regarding this alleged debt?
    If so, please name the credit reporting agencies.

    Please provide the name and address of the bonding
    agent for the collection company <insert name of
    collection agency> in case legal action becomes

    ____________________________________ ________________
    Authorized signature for creditor date

    Please return this completed form and attach all
    assignment or other transfer agreements which would
    establish your right to collect this debt. Your claim
    cannot be considered if any portion of this form is
    not completed and returned with the required
    documents. This is a request for validation made
    pursuant to the Fair Debt Collection Practices Act. If
    you do not respond as required by this law, your claim
    will not be considered and you may be liable for
    damages for continued collection efforts. Please allow
    thirty days for processing after receipt of your request.

    Or was it more like this:

    (insert name and address of creditor)

    Re: Acct # 0000 0000 0000 0000 (insert)


    Thank you for receiving this notice. You have failed to answer my request to validate your claim of debt against me. Pursuant to the Fair Debt Collection Practices Act, I request that you cease further communications with me. Please complete and return the attached notice as required by law. If I do not receive your response within thirty (30) days, I will assume that your collection efforts are being terminated and that you have waived all claims against me.
    Best regards,
    (insert name)

    (page 2)
    COLLECTORâ??S NOTICE (bold and large type)
    Insert name of collector/creditor

    Re: Acct # (insert number)

    (Insert your name and address)

    This notice is given by the collector so as to comply with Fair Debt Collection Practices Act.
    If a consumer notifies a debt collector in writing that the consumer refuses to pay a debt or that the consumer wishes the debt collector to cease further communication with the consumer, the debt collector shall not communicate further with the consumer with respect to such debt, except
    (1) to advise the consumer that the debt collector's further collection efforts are being terminated;
    (2) to notify the consumer that the debt collector or creditor may invoke specified remedies which are ordinarily invoked by such debt collector or creditor; or
    (3) where applicable, to notify the consumer that the debt collector or creditor intends to invoke a specified remedy.
    Please select one of the following by placing an â??Xâ? over the appropriate line.
    Æ?____As the debt collector in this matter, this final notice is to inform you that our collection efforts are being terminated.
    Æ?____As the debt collector in this matter, we may invoke a specified remedy, which is ordinarily invoked by us, to collect this alleged debt.
    Æ?____As the debt collector in this matter, we intend to invoke a specified remedy to collect this alleged debt.

    ______________________________ ________________
    signature of manager or agent date

    This notice is not valid unless completed and signed by an employee or authorized representative of the collector, and timely returned to the consumer. The collector understands that its failure to comply with this federal law may result in civil penalties imposed by the Federal Trade Commission or the United States District Court.
  7. Marie

    Marie Well-Known Member

    Yes, you're right. There is neither a timelimit stated for validation nor any description of what constitutes a proper validation.

    But, it does state that they must cease collection activity until the debt is validated.

    Yes, you have them now on a 1.000 violation minimum.

    if I were you, I'd send another letter letting them know you've got them on a violation... include a copy of the first letter and receipt thereof (the green rr copy w/their signature of receipt) and attach the second validation letter stuff

    the one with "since you haven't responded by silence by estoppel no debt exists" one.

    Once you have proof they've gotten this one... maybe call :) and see what they want to do.

    Regardless, you've got to get something from them or from the original creditor (if you don't sue) stating that the debt is now not going to be collected on by them or by any other collection agency/lawyer. You'll likely have to get a letter stating that this lawyer is backing off but you'll also want something from the original creditor saying they won't pass it onto someone else. Lest they will do just that.

    I had this happen to me (a collection atty screwed up and violated lots) so I sent 3 nasty quick letters but I was running up against the sol for filing a lawsuit... so the atty faxed me a letter of intent to cease collection, remove all derog info, and also never try to collect on it again.

    Just make sure to protect yourself from future collection efforts too. Don't just let this one off the hook. Otherwise, you might as well sue them and get half "the money owed" back.

    By the way, and I know we only focus on FCRA FDCPA stuff... but what about sol's for billing you for the difference???? Good god that's just ridiculous.

    Course, I love the validation approach first. Admit nothing and let them do the work. You could always try billing issues later... but since you've got them over the barrel, push the issue.
  8. Marie

    Marie Well-Known Member

    Go after Ford too

    Have you gone after Ford yet??? send a letter about the errors in the report. It wasn't repo'd. there is no 8500 balance it should be paid off.

    then fire off disputes with the 3 Stooges too. Start covering all bases.

    When Ford does nothing to fix your report, and you've let them know there are errors, it starts becoming willingly dissiminating incorrect info. Send a followup letter showing that you've contacted them and they're still reporting incorrect info.

    By the way, I just read the most recent legal appeal on a case. To help set up harms, you may want to apply for a loan and get declined.

    You want a shotgun approach. We've all seen Ford NOT do the right thing... so be on the offensive.
  9. godaddyo

    godaddyo Well-Known Member

    Re: Go after Ford too

    Marie would you actually still ask for validation in you second letter? I was just wondering here, because he says that he actually owes the debt. Now if he wants to pay them back after the hardship that they have unlawfully put him through, that is his business. If I were in his situation, I might try to contact the original creditor like you told him to. But, I wouldnt do anything to the collector, except let them know how they have violated his rights. If he want to send them proof that is fine. But, I would let them squirm. It is not about validating the debt. Obviousily if he owes the money he owes the money. It is about the collectors violation of the FDCPA and their unlawful colllection practices.
  10. DaveLV

    DaveLV Well-Known Member

    Re: Go after Ford too

    Maire, I've started the process to sue Ford Credit in small claims court. They ignored my demand letter and I sent another letter Friday with photocopies of the court paperwork. I told them I have yet to file but unless I hear from them by June 4th I will file the papers.
  11. LoFico

    LoFico Well-Known Member

    Re: Go after Ford too

    Also something to think about, I know in my state, a creditor has to send you a letter stating it's intent to repossess your vehicle before they do so. Short of this, they did not cover all their bases. I would doubt they sent you this letter if you were current on your payments. Something to check into.......
  12. Marie

    Marie Well-Known Member

    Re: Go after Ford too

    Good. I haven't been following this situation so I didn't know. There are several cases that I've been reading about. You may want to read them because they're easy to read and they tell you where and how people are winning and losing. is the sight I found these on. the appeal that was lost by the individual is Cousin v TU.

    Cousin v. Trans Union Corp. (5th Cir. 03/21/2001) March 21, 2001

    since it's TUs appeal it explains they why's of the decision. It makes for good reading... and preparation.

    Strange stuff though. They try to define consumer report as one dissiminated to 3rd parties (meaning what you see isn't considered a report...hence, if noone else sees the report then they haven't violated the FCRA).

    Definitions of how harms occur vs. not. Good idea to establish a credit decline (though they'd say there could be other reasons than the report). etc etc. Makes for very good strategy (and it quotes the right cases so you don't have to do all the research.)

    I love appeals. They explain so much. I think the thing that ticks me off is he originally won 50K in damages and 4.7million in punitives (1% of TU). Juries aren't that forgiving of CRAs. But appeals courts are. ugh.
  13. godaddyo

    godaddyo Well-Known Member

    Re: Go after Ford too

    I checked out the Cousins v TU case. It is a real shame that he lost when they appealed. This again shows that the CRAs' are nothing but trouble. I realize that they are nothing but a huge corporate bureaucracy, but that doesn't excuse them from not making every effort to maintain correct information on the consumers. I feel that there should be more regulation of these agencies and at the same time the existing laws should be enforced. Dealing with someone's financial well being is a very important and life altering experience. When someone is denied the better things in life for no reason, other than creditor, CRA, CA messups, it is despicable. We must keep holding them to a higher standard. Creating a scenario that proves the damage that they have caused one, is essential in fighting them.
  14. lbrown59

    lbrown59 Well-Known Member

    On several occasions I have had to sue for money owed me. In every case I had to file suit within 2 years because of a 2Yr. SOL.
    That's why I don't understand things like the ouote below.

  15. breeze

    breeze Well-Known Member

    insurance to cover this

    kind of situation is available.

    Dave, this post is not actually in response to your problems w/ Ford Motor Credit. They are awful!! And what they are doing to you is typical of their worst!!

    However, just for the general information of consumers, here is some info that may help someone in the future:

    The difference between the "actual cash value" - which is what your new vehicle is insured for under the terms of your policy, and the balance of your loan is nicknamed the "gap". Once you drive your new vehicle off the lot, it's actual cash value diminishes greatly from what you paid for it.

    There is insurance available to cover this - not all companies offer it. Most consumers are unaware of the situation that could develop if their new vehicle is totaled. Many agents are unaware of this also, and do not offer this insurance to their customers even when it is available.

    As a result, most of us are "self-insured" and don't even know it. You can read about this here:

  16. Marie

    Marie Well-Known Member

    Re: insurance to cover this

    My point is this. Does he know he owes the money? Did he get an accounting for what the money if "owed for"?

    Also, I think the timeframe is ridiculous if Ford never let him know of a deficiency. If I misunderstand the situation, then that's one thing. If he knew he still owed money, it's a different matter.

    But, if he thought the loan was done, and 4 years later they come up w/a deficiency matter, then I think that's ridiculous.

    Now, ethics aside (again), if he wants to maximize his negotiating position... he could request proof of the debt. He wouldn't have to state it's not his, but he certainly could say

    since the amount you're claiming I owe is so large, I'd like to see proof of the debt including the original instrument with original signatures, a complete payment history etc etc.

    any debt owed has to have a contract if over 500. Statute of Frauds.

    If he still owes money I agree he should negotiate a settlement so it doesn't bite him in the future. BUT, he has to take steps to maximize his position. That's all.
  17. breeze

    breeze Well-Known Member

    Re: insurance to cover this


    I don't know if that last post was in response to mine about the insurance or not. I wasn't commenting on Dave's particulars - I thought I said that.

    Ford is doing alot of things wrong here, but I don't enough about the law to recommend a course of action. I would probably use an attorney.

    I just thought it was an opportunity to make folks aware of the insurance available for these deficiency balances which can occur with most auto insurance policies. And I'm not trying to sell it, just trying to add to the general bank of knowledge available here.

  18. Marie

    Marie Well-Known Member

    Re: insurance to cover this

    It was to the Lbbrown post and the 2 year sol.

    Breeze, you have made a great post here :)
  19. breeze

    breeze Well-Known Member

    Re: insurance to cover this

    OK, thanks Marie!

    You are pretty good yourself, girlfriend.


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