--> What Is Validation?

Discussion in 'Credit Talk' started by Butch, Feb 3, 2003.

  1. Butch

    Butch Well-Known Member

    Hey there Kemcos.

    I have begun to address your question. I am trying to develop this thread within a carefully predetermined set of parameters. Namely, I'm trying to outline a general (big picture) approach to how validation works.

    Your question is excellent but I also think it deserves it's own thread, where we can get into some detail. It's better for you anyway as more people will see your question and will want to weigh in as well.

    Therefore, may I have your permission to transfer your question to your own thread? Or you can do that yourself by hitting the "Post" button at the top of the first "Straight Talk" panel. As soon as you do I have the beginnings of an answer to post for ya.

    OH - And welcome to the board!

  2. bbauer

    bbauer Banned

    That is indeed a great post, Butch. Very informative indeed.

    An interesting sidelight might be that Clif Shepard, Spear's attorney actually blindsided Brennan on this one. He told Brennan in a phone conversation that if he would go ahead and file on Spears he, Shepard, would not contest the judgment. And he kept his word. He didn't even put in an appearance on behalf of Spears. This induced Brennan to throw all caution to the wind and file the motion for MSJ and he did so before the 30 days alotted Spears in which to dispute the debt after Brennan's initial contact had passed. The trap was set by Shepard and Brennan sprung it whereupon Shepard filed the appeal to the Indiana 7th Circuit and pretty much won the case easily. There is a lot more history behind this that is interesting but a bit off topic for this conversation so I won't go into it.

    Again, nice post and very informative.
  3. Butch

    Butch Well-Known Member


    Hi Bill, welcome back.

    Thanks for the endorsement.

    (I've learned a hell of a lot from you - BTW)

  4. bbauer

    bbauer Banned

    Thanks for the pat on the back.

    I've learned an awful lot in the past year or so myself and I'm still learning. I've always said that the day I stop learning is the day I will start to die and I think that an excellent example of that is to be seen in many oldsters who work for umteen years and then retire to their easy chairs and the TV and in a few months are gone while those who keep an active mind and body are now living well beyond 100 years of age. I tend to think that keeping an active and inquiring mind is one of the keys to good health for all of us as well.

    I'm not planning to be nearly as active on this board as I have been in the past for the simple reason that I just don't have the time anymore but I'll jump in from time to time with comments on some issues I find interesting.

    Have a nice one.
  5. bbauer

    bbauer Banned

    Would you please explain your thinking just a bit here? You confuse me on that point.
    That's not nearly as silly as some might think it to be.
    In fact, its downright common sense for multiple reasons. First of all, a contract proves nothing at all except that an agreement existed between two or more parties having the legal ability to contract and the desire to do so and an indication that an agreement to perform on the part of one party and the agreed upon amount to be received in turn as compensation. But once a second transaction takes place, whatever that may be the contract no longer represents the true value of the contract nor it's resulting note if indeed such exists. It's presence in any future litigation is merely proof that an agreement exists but is not proof of the debt as you have so correctly pointed out.
    Don't doubt that a bit. But more importantly a copy of a contract not only is not proof of the debt it is not even a properly admissable document to be introduced as evidence of the debt. Let us look at it this way. If I take a $100 bill and blow it up 140 percent can I spend it? No, because it is a copy of the original. Only the original can be spent. What if I certify it as a true and correct copy of the original? Can I spend it then? No, it's still just a copy and not the original. So if I can't photocopy evidence of a debt and spend it then how can evidence of the existance of a debt be properly introduced into a court of law? (and that's exactly what Federal Reserve Notes are, evidence of debt and not money at all)

    Federal Reserve Notes are not money no matter what we say that it is in common usage. Neither is it cash. But just like copies of original documents are accepted in court in lieu of the real thing Federal Reserve Notes are accepted at face value as though it were money. We all know that and we go along with it. So do the courts, but that don't make it right.

    While you have obviously spent a great deal of time and effort to explain to the audience what is and what is not proof of the debt I think I have an explanation that is much easier to grasp so let me have a stab at it.

    We often speak of the so called Mini-Miranda which must be somewhere on the initial demand letter sent to the debtor by 3rd party collectors. The Miranda statement referred to must say that the debtor has the right to dispute the debt or any portion thereof.

    So it should become obvious that a debtor must be provided with all information that would enable him to exercise that right to dispute the debt or any portion thereof. Were that not the case and the intent of Congress then the wording would of necessity have been much different. So in order to properly understand the process, we must differentiate between validation and dispute and that fact should become instantly clear to even the most unsophisticated debtor once properly explained in simple terms.

    So then, a demand for validation must produce that evidence which would enable the debtor to exercise his right to due process which is to dispute the debt or any portion thereof and any failure or refusal by the collector then in net effect not only violates FDCPA but denies due process rights as well.

    At least that's the way I see it. And I tend to think that it makes for a definition that is much easier for the average person to understand even if it isn't written that way in the law.
  6. bbauer

    bbauer Banned

    Well, excuse me Butch but I respectfully disagree with you on this point, at least in part. A debt is an asset to the creditor who may lawfully dispose of in any lawful way he sees fit. That includes selling it unless the original contract forbids it, assigning it to a 3rd party for collection or simply wiping it off the books and on to the back of the tax collector. So if he has the right to dispose of the debt by sale or assignment to a 3rd party then the two of them have the right to enter into agreement stipulating how the collection shall be handled and that agreement can be that the creditor now has no right to accept payments nor even speak to the debtor about the debt or any part of it. He can just hire the collector or he can assign all right, title and interest in the asset to the 3rd party and the debtor has no say in the matter. So stating that you do not have to deal with the 3rd party to whom the creditor has either hired to collect or to whom he has sold the assett is quite incorrect.

    I have seen many people who have listened to one very famous "expert" who constantly tells people that they should never deal with a 3rd party collector and should send them a full cease & desist letter which will take care of the problem immediately and allow them to go back to the original creditor. The result of listening to that infamous expert is the people getting a letter from the collector saying that they have received the debtor's cease & desist letter and are taking their legal option to inform him that they are going to file suit on him immediately.

    Needless to say, that wakes people up to the "expert's" advice real quick. It's never been very hard to get them out of that pickle but it sure does scare the heck out of them. There is another aspect to it as well and that is this.

    When dealing with an original creditor one has very few if any rights under the law while when dealing with a 3rd party collector one is extremely well protected by the law from abusive debt collection practices. So why would anyone want to trade his lawful protections for a situation where he has few or no protections? Just don't make no sense to me at all.

    You simply have no reason to deal with them until you get your copy of same. My argument on this point is simple with them and goes like this; "If you insist I have an obligation to deal with you show me this agreement or I will NOT deal with you, no if's and's or but's about it.[/quote]That might make a mighty good point to bring up in court. Make them prove to the court that they have some authority to collect the debt. And that raises another highly important point.

    The OC signs a document giving the collector authority to take whatever action he deems necessary to collect the debt. But does that mean he actually has standing to sue in a court of law? Well, let's look at it this way. Suppose I give you authority to go jump in the lake? The question then becomes do you or do you not have standing to do so if you can neither walk on water nor swim in it? Not hardly. Standing to sue is a matter to be decided by the court and not by the OC. In order for one to have standing to sue one must be an injured party and he may not have standing to sue if he has placed himself in harm's way. Only problem is that such things are not usually considered in debtor's courts.
    You don't have "standing" (authority) to enforce that statement. You defaulted on the contract and no longer have any say in the matter.

    Sorry about that.
  7. bbauer

    bbauer Banned

    Yes, you are quite right about that but there is a grave danger here and I have seen many great researchers fall into the trap.

    While there are of necessity many important equalities between UCC and consumer law it must never be forgotten that UCC is commercial law and consumer law is an entirely different animal. I've seen many fall into the trap of thinking they can take stuff out of UCC and bring it into many other situations entirely out of context with UCC. An instance is the UCC-1 statement which tells the traffic officer that he is an employee of a commercial enterprise and is therefore subject to UCC and the perp reserves all his rights under UCC. And he proceeds to sign the ticket "All rights reserved UCC-1 instead of his name. He usually spends at least a night in the iron hotel as a guest of the city or the state.

    So while there are many similiarities, let's not get the two confused.
  8. bbauer

    bbauer Banned

    Sorry Butch but I really must respectfully disagree with you here.
    I'm afraid it is a serious violation of FDCPA and several courts have ruled that 3rd party collectors have exactly 30 days from the date of their receipt of the debtor's demand for validation (dispute) and not one day more in which the demand of the debtor must be in his hands. I've been looking high and low for those court cases that I have seen out there but can't find them now that I want them. This same discussion is being carried on in another forum which I am privy to. Maybe some of our audience will help us find those court cases. Believe me, they are out there and they can be found. Then we will have the proof that we need.

    Sorry about that but again I respectfully disagree. FDCPA deals with 3rd party collectors as does GLBA and FCRA deals with credit bureaus and those who are furnishers of information. The only 30 day rule here specifically applies to the time in which the credit bureaus have to complete their investigations. It does not even say that the credit bureaus must have the results of the investigation in the hands of the consumer within any certain time frame. So the two laws are dealing with totally different entities and never the twain shall meet so to speak.

    If you go leaping about the tulip patch that way you will be taking things out of context and just as that's a horrible thing to do with the Bible its also a terrible thing to do with the law. Never take anything out of context because you will be wrong if you do. Its something like the concept that if you ask a judge the wrong question you will get the right answer to the wrong question every time.

    One simply cannot take things out of context and expect to come up with the right answer.
  9. helpwanted

    helpwanted Well-Known Member

    Re: Re: --> What Is Validation?

    Butch has worked hard, and posted many examples of law to back up his statements and you go off on some tangent about how you disagree because you have seen the cases, but can't seem to locate them. Do us a favor and hold your opinions until you can give us proof that they do exist. It would benefit the readers more so, if you did some research as now everyone is clearly confused with your so called "disagreements". To back up my point....

    In an FTC opinion letter to Cass

    "...there is nothing in the FDCPA that requires a response to a written dispute if the debt collector chooses to abandon its collection effort with respect to the debt at issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1032 (6th Cir. 1992)."
  10. helpwanted

    helpwanted Well-Known Member

    Re: Re: --> What Is Validation?

    So where exactly are you disagreeing with him? I don't believe he said that the CRA's MUST have the information in the hands of a consumer. But they must complete the investigation BEFORE 30 days and update or delete. If the CA can't validate the debt, then when they receive a notice of dispute from the CRA, they can't very well verify it - as that would constitute continued collection activity! If you read his entire post, you would have seen that. Of course then again, you are probably just disagreeing to disagree, I'm sure.
  11. PsychDoc

    PsychDoc Well-Known Member

    Re: Re: Re: --> What Is Validation?

    Wait a minute, helpwanted... Saying you disagree because there's a case out there we need to locate isn't disrespectful! That doesn't undo Butch's terrific work! helpwanted, look how much time and effort went into Bill's presentation of his thoughts too! The fact is that Butch himself has talked about how he has missed the serious debates about FCRA, FDCPA, and related issues -- this is all a part of that kind of debate. Please remember, helpwanted, that we can debate and disagree and not take it personally. Also remember that if Bill doesn't find that case, then indeed he loses the argument, lol -- but that doesn't make his debate with Butch any less interesting, nor does it besmirch Butch's terrific work either!

  12. PsychDoc

    PsychDoc Well-Known Member

    Re: Re: Re: --> What Is Validation?

    Welcome back, Bill!!!

    Doc :)
  13. helpwanted

    helpwanted Well-Known Member

    Re: Re: Re: Re: --> What Is Validation?

    I understand that, but to prove my point that he was wrong - is the excerpt from the FTC opinion letter I posted. In fact, I have searched long and hard and haven't found any cases to exist. How could such a case exist when the letter points directly to "Smith v. TransWorld, Inc." ??? Therefore, I am in fact disagreeing with Bill. Much the way he used the "tulip patch", I am using my way of expressing my disagreement. Hope everyone is ok with it! :)
  14. PsychDoc

    PsychDoc Well-Known Member

    I think you understand what I'm saying... disagreement is great. I'm disagreeing with your tone right now. Colorful writing is great. Bill's "if you dance around the tulip patch like that, you're liable to get eaten by the bees" or whatever, lol, is indeed his style. But I sensed that you were insulted that the thread had become a serious debate. I fear you would find doctoral seminars in clinical psychology to be QUITE insulting then, lol -- sometimes people debate pretty seriously, but you can disagree with the content without attacking someone for the process. If indeed you weren't doing that, then I'm wrong and I apologize.

    By the way, you guys are way over my head vis-a-vis the content here, lol, so I can't prove anybody wrong. I'm more qualified to talk about the interpersonal interactions than I am about the law. :)

  15. LKH

    LKH Well-Known Member

    I'm curious as to why someone would want to come back to a board that he has repeatedly put down and called the "comedy store" for over a year?
  16. helpwanted

    helpwanted Well-Known Member

    double post
  17. helpwanted

    helpwanted Well-Known Member

    After reading my reply over again, I guess I see where you are coming from. I didn't mean to attack, but felt that he was arguing over something that he had no leg to stand on. If you are going to post such a long post, I find it hard to keep reading when I see nothing but "I disagree" , "in my opinion", "I also think" etc... I guess what I am getting at without being too harsh is...No one is helped with your opinions unless you can quote facts or law to back it up! I read through his posts and it just seems to be pointless arguments without proof. I guess, if nothing else, he has p

    BILL, SHOW ME THE MONEY ! $$$ :)
  18. PsychDoc

    PsychDoc Well-Known Member

    Welcome back, LKH!


    At the rate we're going, we're liable to see Doris K. chime in here shortly. :)


    P.S. Did somebody say something about emoticons?
  19. bbauer

    bbauer Banned

    Re: Re: --> What Is Validation?

    What you have quoted and spoken about here Helpwanted is absolutely correct as is most of Butch's post(S)

    Do you see that big IF in there? And do you understand the context differences between what Butch appeared to me to be speaking of? That portion of Smith v. Transworld Systems is talking about FDCPA and what happens if a collector gives up and does not pursue the debt. The courts have been very specific about that too and it may well have been in Smith v. TransWorld where the court held that in the event that a debt collector throws up his hands and refuses to collect he must then return the debt to the creditor and inform the debtor of his decision within 5 days and remove any derogatory items the collector had placed on the debtor's credit records. The court held that if that were done the collector could not be successfully sued no matter what violations he had committed.

    That is a far different question than what I believe was/is the subject at hand which is "what law or court decision forces the collector to provide validation within a given period of time, namely 30 days after his receipt of the debtor's demand for validation.

    It's not the amount of work that Butch has obviously put into learning nor his excellent style of writing nor even the amount of time collectors have to validate that I wanted to bring to the front but rather the fact of bouncing from one law to another to yet another and back again.

    That is a sure way to end up with misunderstandings and wrong conclusions. Another way to end up with grief is attempting to interpretate what the courts have said. Most of us have not the years of courtroom trial experience and schooling that skilled attorneys and law professors have to enable them to attempt to analyze what the court has said. When we research the law we need to realize that the entire context of a decision can hinge on one single word.

    A case in point is Spears v. Brennan. Many have commented in other forums that Spears set the standard for what a validation must consist of. I too made that error until the fallacy of my thinking was pointed out to me that the 5 indices spoken of in the decision only applied to what must be contained in the initial communication with a consumer and has nothing whatever to do with validation.

    But again, my whole point is that we must be extremely careful not to take things out of their contextual settings and we must also be very careful not to attempt to make the law read what we would like to have it say. Our jails are the official repository of many good researchers who have imagined they had the perfect answer to their hated enemy, the IRS. They make just one mistake and its all over but the crying.
  20. jlynn

    jlynn Well-Known Member

    Re: Re: --> What Is Validation?

    I did. You wanna make something of it? LOL wink wink.

    <------hijack over------->

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