verifying = collection activity?

Discussion in 'Credit Talk' started by SUNHAWK, Feb 9, 2004.

  1. SUNHAWK

    SUNHAWK Well-Known Member

    I just posted the question in another thread asking if the following was allowed.

    1) Tradeline is added
    2) Validation is requested
    3) Tradeline is updated to disputed
    4) Tradeline is disputed with CRA
    5) Tradeline is verified
    6) No validation is ever provided

    I asked if, by having original account records BUT not providing them would justify this scenario.

    LKH said no....he said, verifying the tradeline, even if marked as disputed, is not allowed if validation is not provided to the consumer (even if the CA may be able to validate and has original account records).

    I started a new thread here in order to get to the heart of the matter which is:

    Does verifying a TL constitute continued collection activity?

    I read about 25 posts where many people state yes but I have yet to see a black and white reason as to why.

    Don't read too much into it...does VERIFYING alone = collection activity?
     
  2. cexume

    cexume Well-Known Member

    I stayed with LKH fact..
     
  3. SUNHAWK

    SUNHAWK Well-Known Member

    But I have yet to see hard proof of this :)

    I am hoping one of the people in the 25 posts I read that said the same ol':

    If you requested validation and they didn't provide it, they can't verify their tradeline. This is continued collection activity.

    Okay...WHY!!!!!
     
  4. merlin

    merlin Well-Known Member

    I have the same question . . .

    If I am standing in front of a judge arguing the point, what can I physically hand him to show that verifying = collection activity?
     
  5. Butch

    Butch Well-Known Member

    This stuff is more complex than this.


    Don't forget, we're dealing with far more than just FDCPA, which is the Act you guy's are talking about.

    The FCRA dictates that they must maintain reasonable procedures to assure max. possible accuracy.

    Also - your OC is required to perform what is called a "reasonable" investigation of your complaint. OC's have new duties via FCRA, thanks to the CCRR of 96. See "New Duties For Furnishers Of Information".


    If they continue to report a debt which has not been verified, they have failed miserably to perform this "reasonable" investigation. Moreover they either know it, or are consciously avoiding the knowledge.

    • § 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.

    Your action then, probably should be FCRA 1681s_2 (B). (15 U.S.C. § 1681s-2)

    :)

    .
     
  6. Butch

    Butch Well-Known Member

     
  7. merlin

    merlin Well-Known Member

    Having recently stood in front of a judge who basically treated me a like a money grubber who was using the credit laws solely for financial gain, I want to be positive that I understand (and can articulate) the issue . . .

    Verifying without validating has nothing to do with continued debt collection activities, but rather, with the possibility of reporting inaccurate info. Once they've marked it as "in dispute" doesn't this get around the requirement for accuracy?

    This may be particularly problematic with a "not mine" dispute with the CRAs. I recently spoke with a CA about their verification of a debt and they indicated that they were not verifying the validity of the debt with the CRA, but rather, the CRA specifically sent them the following info to verify:

    Is the name on this debt XYZ?
    Is the social security number on the debt 123-45-6789?

    At least in this particular case, the dispute didn't come to the CA in a way that might better indicate that I was disputing the mere existence of the debt (e.g., Merlin says that she never had a debt with Creditor XYZ, investigate whether or not there might be an error).

    Standing in front of the jokes that some call Small Claims judges, I can see a CA saying:
    "Your honor, all that I was asked to verify by the CRA was whether or not the name/SSN on the account I was reporting was consistent with their records. In no way did I comment on the accuracy of the account. Additionally, in acknowledgement of the dispute that I received directly from this deadbeat, I marked the account as in dispute while I contacted the OC in an effort to investigate this deadbeat's claims."
     
  8. cnoob

    cnoob Well-Known Member

    Re: verifying = collection activit

    I would say that verifying is ABSOLUTELY continued collection and the reason why is...

    Regardless of what the CRAs and CAs say about CRs just being records, the fact of the matter the soiling of your credit report is just one of many tools used to pressure you to pay--much in the same way penalties, late fees, reduced services and denial of service are used as payment incentives.

    Because verifying negative information on your CR is a way to maintain that incentive tool to get you to pay, it IS collection activity.




     
  9. merlin

    merlin Well-Known Member

    Re: Re: verifying = collection activit

    But where does it say that?

    FTC Opinion letters specifically say that it is okay to leave disputed info that is already reported to a CRA on the credit report, as long as it is notated as in dispute.

    (I'm not trying to be argumentative, just trying to figure out how to best back-up this issue in court.)
     
  10. SUNHAWK

    SUNHAWK Well-Known Member

    OH NO!!!!!

    I think everyone may be reading a little too much into it again :)

    I am asking, simply, does VERIFYING alone = collection activity?

    Butch states that the FCRA dictates that they must maintain reasonable procedures to assure max. possible accuracy and if they continue to report a debt which has not been verified, they have failed miserably to perform this "reasonable" investigation.

    However, I am asking, very simply does verifying = collection activity under the FDCPA!

    Let's assume original account records exist and both the OC and CA have them. And, each investigation they receive, under the guidelines of the FCRA, are verified with original account records.

    BUT, those original account records are not provided (i.e. I get no validation).

    Does verifying alone = collection activity?

    Many state that, if validation is not provided and they verify, that is continued collection activity even if they have original account records but do not actually provide them.

    Therefore, under the FDCPA alone, they are continuing collection activity and violating it.

    WHY!!??

    No FCRA :)
     
  11. SUNHAWK

    SUNHAWK Well-Known Member

    Re: Re: verifying = collection activit

    Although your stance is understandable and could be correct, the FTC is very clear (in the CASS letter) that, if a dispute is received after reporting, the CA must only update the TL as disputed.

    The FTC does not mention anything about the continued reporting itself being collection activity and obviously it must not be because the FDCPA says clearly that until validation is provided, they must cease all further collection activity.

    The FTC simply says it must be updated as disputed until validation is provided.

    There has been MANY threads in which people have asked: How long can a company report an account as disputed without removing it.

    Usually, the most common answer is indefinately UNTIL you dispute it with the CRA (since reporting a disputed account itself is not continued collection activity) then they must delete because they can't verify since that would be considered, under the FDCPA as collection activity.

    However, if continued reporting of a disputed account is NOT collection activity (since they can continue reporting this indefinately even when validation is not provided), how is verifying, which would allow that disputed account to remain, be continued collection activity?

    Assuming they correctly investigate under the FCRA but DO NOT provide validation, how is verifying alone continued collection activity AS LONG AS the debt remains being listed as disputed :)

    The FTC would state that the CA has to temporarily delete the TL when a dispute is received.

    Instead, they simply say they have to list it as disputed.

    I am guessing, if they DO have original account records and CAN properly verify their entry under the FCRA, they have no obligation to remove the offending account and they have no obligation to provide you those records AS LONG AS they never contact you and AS LONG AS they leave it listed as disputed.
     
  12. SUNHAWK

    SUNHAWK Well-Known Member

    Re: Re: Re: verifying = collection activit

    Exactly.

    I am not trying to be argumentative either but you need to argue in order to get to bottom of things....as long as it is FRIENDLY arguing.

    If we can infer from the CASS letter that continued reporting of a disputed account indefinately is okay.

    Why can't that CRA verify their disputed entry in order to leave it listed since the FTC simply says it must be notated as disputed (but no where do they state it must be deleted)?

    Again, this is all assuming they have original account records but just don't want to provide them for whatever reason and are properly investigating under the FCRA ;-)

    We need a good letter to the FTC asking: "Can a CA report a disputed account indefinately even if no validation has been provided and would verifying a dispute from a CRA be considered continued collection activity if validation has been requested but no validation has been provided, regardless of whether the account is lised as being disputed?
     
  13. jam237

    jam237 Well-Known Member

    This is already answered in a ftc opinion letter...

    CASS - questions 2 & 4 provides the concrete answer...

    If you dispute it, and they have not validated it with you, they must let it delete.

    Now, it does let them to update, but the update must not be in response to your dispute. So, if you routinely inter-lock the validation/dispute processes, you are forcing the 30 day time frame on their response to the validation letter.

    I am just glad that some companies are too dumb to realize that verification with the CRAs is collection activity... :)

    There is another opinion which I am trying to think of which deals with the issue of the company just not updating the account any more. If I'm not mistaken it was in the opinion letter for CellularOne. Unfortunately it doesn't put a time-line for forcing an update to note the disputed status, so if they just never report it again, they're 'safe'...

    http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

    Updating IS NOT collection activity.

    Verifying in response to a dispute IS collection activity.
     
  14. jam237

    jam237 Well-Known Member

    Oh, one thing to remember...

    Not deleting, and not updating is not reporting...

    If the company abandons the trade line on your report, technically they are not violating the cease of collection activity, the only thing that they are possibly violating is refusing to update voluntarily which is a 623(a) non-sueable violation...

    If the company verifies it incorrectly, then it is a 623(b) violation which can be sued for; and if they verify it while a validation request is pending then it would be an 809(b) violation.
     
  15. merlin

    merlin Well-Known Member

    Sorry to be so dense, but I just don't see what everyone else is seeing. (I feel like I'm looking at one of those stupid pictures that were so popular a few years ago -- the ones that turned into something if you stared at it long enough. I never could see those either!)
     
  16. jam237

    jam237 Well-Known Member

    Part II of the Cass opinion explains the difference between verification, and updating.

    Basically, 623(a) is updating... 623(b) is verifying.

    While they HAVE TO update under 623(a), they may not verify under 623(b). Since the act of verification to the CRA is considered to be collection activity by the FTC.

    The caveat, and the main difference between the two, if the CA doesn't manually update the tradeline, or they do and don't put the notice of dispute in it, you can not sue them for it, because 623(a) violations are non-sueable violations.

    If they update, they are voluntarily correcting, or updating the data that they have already submitted. That is what they are obligated under the 623(a)-FCRA, and 1692(e)(8)-FDCPA, when you dispute with the CRA, they are actually doing 'work' outside of the bounds of the typical update (when they update, the computer typically sends the records manually.) when they verify they are "SUPPOSED TO" actually take the verification request, physically look at their information, and complete the verification request, and submit it back to the CRA. That's activity... and that activity is in effort to collect a debt, therefore its collection activity.
     
  17. Butch

    Butch Well-Known Member

    Nicely done Jam.

    Check your mail.

    :)
     
  18. SUNHAWK

    SUNHAWK Well-Known Member

    I disagree. Nowhere in the CASS letter does it concretely state that verifying is collection activity.

    We can reason that updating is NOT collection activity however as it says they have the legal obligation to update it as disputed when receiving a dispute.

    However, it does not say whether this can be done in response to a CRA dispute nor does it put a timeline on how long they have to update it as disputed.

    I agree that it does let them update it to disputed status (without providing validation), but I am not aware of anything that says they can't update it to disputed in response to your CRA dispute. Nor do I see where it says verifying a tradeline is collection activity.

    There are many threads on this very question...How long does a DF have to mark an item as disputed?

    Well, I think it is pretty clear. According to the FCRA Section 623, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

    Now, this leads us to believe...what is furnishing? Is sending new info to a CRA furnishing OR is continuing to list the same thing on a consumer report considered furnishing?

    It appears that you believe, if a DF continues to report but never re-reports or updates, they are not furnishing. However, what would you call continued reporting without updating or re-reporting then?

    My answer is, if furnishing is the continued reporting, they must update it as disputed immediately.

    If furnishing is only the updating or re-reporting of information, then it must be done at the time of receiving a dispute through a CRA AT THE VERY LATEST since if they verify they are technically re-reporting and if they update, they are updating.

    According to my credit reports, updating and verifying are two different things.

    When the company receives a dispute through the CRA and then updates it to disputed, the CRA states it was UPDATED. However, if they don't change anything, they state it was VERIFIED.

    So, if updating is not collection activity, then they COULD update it to disputed at the time of receiving a dispute through the CRA since they are technically updating and not verifying :)
     
  19. SUNHAWK

    SUNHAWK Well-Known Member

    If not deleting and not updating is not reporting, what would you call the tradeline that continues to remain on my credit report?

    If the company abandons but does not update it as disputed, I would think that would be a violation of ceasing colleciton activity since the FTC clearly says they must update it as disputed.

    I guess I still don't understand why, "if they verify it while a validation request is pending then it would be an 809(b) violation" since nothing states that.

    I do however agree with Butch in another thread that, we have enough evidence to reason that verifying during validation is collection activity but it is a very fuzzy issue at this point.

    It appears that most people throw around the statement as though it is a law and it isn't. We have an argument but nothing concretely states verifying is collection activity.
     
  20. SUNHAWK

    SUNHAWK Well-Known Member

    Re: Re: verifying = collection activity?


    I think I may have finally understood Merlin

    Although Jam explains it very well, let me just try to re-explain it if you didn't get it.

    However, I think our explanations are different in what we both believe, I think we arise at the same conclusion.

    The key here is the definition of REPORTING

    Although JAM states that updating is not reporting (he actually says updating is not collection acitivity), I disagree on that point (although, in my past post, my view was different...I CHANGED IT :). I think updating the tradeline as disputed is reporting.

    The very definition of furnishing (reporting) is to supply or give. Therefore, if you are updating, you are supplying or giving them new info therefore you are reporting.

    However, if they are doing so only to state it is disputed, it is NOT actually collection activity.

    This is similar to a CA contacting you to state:

    "We received your validation request and are working on obtaining your documents."

    They may not contact you during the validation period but to tell you they received your validation is an exception to the rule (like reporting the account is disputed during the validaiton period).

    I believe, reporting is anything that constitutes the transfer of information from a data furnisher to a credit reporting agency

    Therefore, if they update their tradeline and change your balance for instance, that is reporting since they are giving the CRA new info.

    When a DF receives a dispute, basically, the dispute form shows what the DF is reporting already (I know this because I have one). The DF then has to respond by stating that the info is correct or is not correct.

    If they update what they are reporting (like they did in my case) to $0 balance and $0 past due, they are still sending new info to the CRA and that would be reporting. Or, if they verify and don't change anything, they are re-reporting the entire account basically because they have the opportunity to delete but since they are not, they are re-reporting.

    So, if we know what reporting is, we can then follow the CASS letter word for word.

    The CASS letter states:



    we believe that reporting a charged-off debt to a consumer reporting agency constitutes "collection activity


    Well, if we know what reporting is and my definition is valid, then anything that falls under reporting is collection activity (i.e. verifying because they are essentially re-reporting).

    CAN YOU DIG IT?
     

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