Validation Rights 15 USC sect 1692g

Um, hmm, and nothing in the law requires either:

1) that creditors or collection agencies "verify" or "validate" debts within 30 days (they must cease communications with you until they send you the information, but they can still sue you if they wish and serve process on you); or

2) that the creditor or collection agency to produce signed copies of ANYTHING to "verify" or "validate" a debt for purposes of the FDCPA. Rather, it simply must produce records or other information regarding the amount of the debt, when it was incurred, and to whom it is owed.

Just so we're clear, and no one on here gets the wrong idea.

 

But what happens when the SOL has run?

Cyprigirl

 

I read the relevant statutes, which do not say the debt collector "MUST" verify the debt. Rather, the FDCPA says that the debt collector cannot continue contacting you in an effort to collect UNLESS and UNTIL it verifys the debt. However, the creditor or CA (whoever owns the debt) can go ahead and sue you without said "verification." (which is not to say they won't have to prove the existence of the debt in court--they obviously would).

As for what "verification" is, the courts say that the verification requirement is satisfied by producing ordinary records, such as computer printouts, that are sufficient to show the amount of the debt, when it was incurred, and to whom it is owed. I've often seen the suggestion or outright statement on here that unless they show you something with your signature on it, like an application for credit or something, they have not "verified" or "validated." That is false.

 

Hi Guys!

Well, I have been busy and havenâ??t been able to post a lot lately but I always try to read the latest posts. I could not pass this one up.

If a debt collector were to have taken me to court for a debt that had not yet been validated as mine, I would simply appeal to the judge that the debt was never proven and.... since the statute clearly states that I have not admitted anything by not replying to a notice of the debt, then I would put the burden of proof on the debt collector right there in front of the judge. I would highlight the statute section of:

(c) Admission of liability
The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

I highly doubt on most of these sold off debts that the debt collector could even produce adequate documents to prove the debt. Most show up armed with a computer print out which is not adequate.

The point here is not whether I owe it, but rather how much do I owe, is the statute to collect up, is the credit report reflecting inaccurate information because of the collection agency and are the figures correct for fees, penalties and principal.

I am experienced when I say many times they are not. I spent many a years pursuing debtors in a court and the judge usually has no patience for a debt collection company trying to collect a 5-year-old debt from a person. Just as debt collectors have many ways to attempt collection, you too have many ways to really make them work for their commission.

Hope all the usual posters here are doing great!

Cheers
Kristi Feathers
Consumer Advocate
(that's for any newbies who may not know who I am

 

Hi Kristi! It's nice to have you on the board.

 

Well, I certainly agree with Squawk about the amount of time the collection agency has to respond. There is no 30 day limit written into the law.

I do think it's reasonable that we put 30 days into the letter as 30 days is a reasonable amount of time to validate... but certainly not validating w/in 30 days is NOT a violation of the FDCPA. But if the collection agency tries to continue to collect on the debt BEFORE they've validated then you've got them on a violation.

If the debt isn't on your credit reports, then you could request validation and if they don't respond they can't bug you until they validate. If they never validate, you legally aren't supposed to have to deal with them.

But I think the larger issue (regardless of whether some of the letters may/may not be posturing) is that at least the consumer is doing several things.

1. Being proactive in dealing with the collection agency
2. Starting a papertrail whereby you show you've requested proof
3. Shown you won't be one of those that rolls over and just pays... thus setting up the idea that if you do settle the debt you will do so while protecting yourself
4. set up scenarios where now THEY can violate the law and where you're in a position to catch THEM.



Let's take the situation where you do get into a lawsuit with a collection agency (they take you to court for the debt)

1: if you show up with nothing in hand, but say you called and tried to get proof of the debt/ and they show up with stacks of paperwork (albeit just printouts of the debt record, call logs etc) and you don't have any absolute defensed (eg: sol)...
likely you'll lose.

2. if you show up with a few notes of who you spoke with and tried to settle the account or get proof of the account/ and they show up with all their stuff: you have a better chance but not by much.

3: if you show up with your call log, your notes, and several certified letters showing how you have requested info and you have it all in writing/ and they show up with all their stuff: now you have more for the judge to consider.

I think it's like a debate. How much evidence on your side do you have???? How much more unreasonable can you make their collection efforts appear???

I mean honestly, don't you think judges know collection agencies go over the line all the time! But you have to help your own case!!!

Additionally, if you send the letters and they don't respond at all (which happens a LOT) and they still try to pursue you, then you DO have them on FDCPA violations (and then by daisychaining statutes, if there was no validation of the debt then they can't continue to report it either).

It's all a matter of power and position. And frankly, the laws are weak that protect us. If the first few cases have proven to keep the laws weak with regards to what is/isn't acceptable... isn't it up to us to continue pushing the issues into court and to get BETTER cases and results that will help us all?!!!

I mean, how many cases do you think were settled out of court or even lost before Wenger v TU????? Now the CRAs at least pay attn to us when we talk about suing We need the same for collection agencies!!!

If the standards for collection agencies are weak, it's up to us to make them tougher. And if nothing else, even if we lose, at least we go down with a mighty fight

 

Not a bad strategy, I'd say. Two quibbles, just to make things clear for others. (1) The plaintiff (i.e., the CA or creditor) will have the burden of proof regardless. Citation to the admission of liability section should be superfluous. (2) I'd be cautious about what and what isn't adequate to prove the existence of a contract and the amount of damages. Properly authenticated business records, such as computer printouts, would be sufficient in some cases.

I agree that CAs that are suing after having purchased your debt as part of a portfolio are vulnerable to not having proof. Creditors or attorneys suing on behalf of creditors are another matter.

 

Hi Kristi

Great to see you here again!!!

I was recently taken to court (yes, post bk) for a debt that was discharged in my bk.

Now, let's look at how good a collection agencies records really are:

They actually filed a lawsuit post bk against me

They filed for the complete amount of the loan but didn't even bother to factor in the issue of my returning the car and their subsequent selling the car

They filed with an address I hadn't used in 5 years.

There was a current address on my credit files because it was post bk, and I didn't have anyone after me anymore.

I went to the courthouse to see what they filed. They filed a one page piece of paper as evidence of the debt that had 3 lines on it:

Outstanding loan balance: 25, 565
Atty fees and coll costs: 3,000
Total: 28, 565


That represents the sum total of what they thought they had to present for their case. Now, let's be honest here. They had looked at my credit report 6 times in the preceeding 4 months. They had a correct address. They even had a mailboxes address that would've accepted certified mail. They didn't use any of these current addresses. They instead purposefully used the address I had lived at before.

I had let them know that address wasn't valid anymore. I had contacted them pre-bk to make arrangements to turn the car into them. I had given them then a good mailing address (I was filing the next day so it didn't matter if they knew where I was anymore). Oh, and they had tried to repo the car at the old address so they KNEW I wasn't there anymore.

Now, let's just see what they thought they were doing. They sent the summons to an address they KNEW I wasn't at when they had on file a good address and my credit report gave another good address. They had 2 addresses they could have used. Hmmmm. Do you think they were trying slide their poor case into court and get a default judgment???? Course they were.

When I called them on it all, they recalled the lawsuit (of course) and I used the FDCPA violations (and their violating the automatic stay of the bk) as leverage for a complete removal of all derog info.

Now that did really help my credit score!!! (it was my only record of included in bk). Their errors REALLY helped me

BUT, do you guys get how either poor their recordkeeping is... or how they plan to make sure we don't show up at court???? Hard to put on a defense if you don't know about the lawsuit.

Oh, the joke of it all is this: I found out about the lawsuit because in 1 week I got about 12 letters from attys to my correct address (funny, they didn't have a problem finding it) soliciting my for a bankruptcy!!! after all, clearly I was in financial trouble because I was about to be in a lawsuit... ironic.

But again, it's a good example of how their violations of the law can be LEVERAGE for what you want.

 

I think that validation can be tricky for those of us who read the FCDPA for the first or second, third, fouth time. I didnt get it the first time I ;read it and if you are not really thinking it through, it comes off sounding like you have more rights than you really do. I have argued the point of validation over and over again. In reality there is really little difference. If you notice, validation only requires them to send the name of the creditor and the amount that they are collecting for, also and judgement information. It is that simple, no signature is required, no real proof is required by the FDCPA. This is a completely different set of rules that barely protect the consumer at all. I believe that we really need to differentiate between what happens in the courtrooom and what they are required to do before any legal action is taken. There is a great chance that the judge will side with the consumer if the case is presented properly. Of course there are many ways to battle a collector in the courtroom. There are less ways to out fox an attorney representing the original creditor. I have had several cases dismissed when a Collection agency tried to sue me. When an orignal creditor sued me, I couldnt find a way out and I decided to settle if they vacated. I was happy with both, becauese my credit remained unscathed. The laws are not really written in our favor. They have to be held accountable by the consumers or they get away with murder.....

 

Squawk

Actually, thanks a lot for the clarifications!!! I'm learning tons by your posts!

I probably should be very careful how I phrase this post since it could depend on your state laws what is/is not proof of a debt... right?.

I think what's surprised me so much is the totally slack evidence required sometimes...

Perhaps to me, common sense says if someone says I owe a debt, I'd expect a bit more proof than a computer printout. It just seems ludicrous that a printout could ever hold up in court!

I mean, if that's the case, why not just make up debts... add on fees and charges... and then blackmail folks into paying by blackening their good name on their credit reports and then bugging them to death with aggressive collection tactics...

I guess the more I learn the more disgusted I'm getting with what creditors, CRAs, and collection agencies can do to us with so little fear of reprisal.

While I'm not too naive, I think the laws were bought by industry. So I am thinking that the only way to modify the slack enviroment would have to be through case law.

I mean, honestly, we aren't likely to ever see strong laws governing these activities. So the only way we even have a shot of getting fair treatment in the future would be if there have been cases where real financial damages were given to the consumer...

Hey, since you clearly have better access to cases... have you ever seen a copy of Wenger v TU? or is it completely sealed to all???

 

Re: business records

The evidence codes in the various states normally do not allow hearsay. That is because you cannot cross examine the person making the statement. In this case, someone is alleging that you owe this debt and they are using a piece of paper to prove it. You cannot cross examine the piece of paper and therefore it is unfair to you. That is why hearsay is normally not allowed.

But, and there is always a but, there are exceptions. Most states allow a "business records" exception to the hearsay rules. What this means is that everyday clerks make entries onto business records in the normal course of business. They do this all day long. It is unlikely , in most cases, that a low level clerk, say in 1996, would falsify your records just to screw you over many years in the future. Therefore, it is assumed that these records are probably true and therefore admissable.

For example, you go to the doctor in 1996. The clerk makes an entry showing you owe $100. It is never paid and the doctor sues four years later. There is really no reason for that clerk to lie in 1996, so the evidence is likely correct and therefore admissable.

If you are sued, you need to show that it is unlikely the record is true. You can show the people you are dealing with are scum, show they frequently make errors, or show that the record they are using is not contemporaneous with the transaction. In other words, the proof was created later to show you owed the debt, not at the time of the transaction. Or, you could bring in live testimony - I never went to that doctor, I never lived there, that was someone else with the same name, etc.

I think the point a lot of people are making here is that you need to document everything and be prepared.

The problem we face when dealing with those in debt collections is that a creditor sends a collection agency a piece of paper the you owe him money. It is not the original agreement and may or may not be correct. The CA "verifies" the debt by referring to the piece of paper he got from the creditor, not the original paperwork. They consider that good enough, but most Judges would not accept that, especially if you could cast any doubt on the validity of the debt.

 

Re: business records

I totally agree with you Tom. Be prepared, keep records and use your right to have the debt validated. Many times as I sit in court rooms listening to the cases (Small claims that is), I am repeatedly amazed at how unprepared the creditor is. A lot of times they send a very young collection clerk or bank rep and the poor person is just trying to struggle through. Being prepared is your greatest weapon. Oh, and NOT being intimidated.

Kristi

 

Re: Squawk

Tom's post was right on the money, so I won;t waste your time by adding to his fine words. But I did look for this case today and couldn't find anything. Can you tell me anything about it? Where was it? How long ago? Point me to any news stories or anything?

If something is publicly available I should be able to get it.

 

Re: Squawk

I have a copy of Cushman V Trans Union if you would like it. Please let me know.

 

Close, But Not Quite

Squawk (Kristi, Tom):
As a practical matter litigation is seldom (if ever) initiated by collection agents during the 30-day validation period. I say practical because itâ??s simply not cost-effective, much like engaging discovery too early. Moreover, you are (each) understandably mistaken; engaging litigation before validation of the debt CAN be considered a violation of the Act (FDCPA).

On balance I understand where you got this notion, itâ??s a common misconception among equally competent minds. Although if youâ??d like to discuss this sub-thread further, Iâ??d be happy to do so under itâ??s own topic. Nonetheless, please consider that whatever inconsistency Iâ??ve pointed out has been done not to quibble but rather inform.

BTW: Kristi itâ??s GREAT to have you back! [;-)

 

I think there is another angle here to be considered when it comes to going to court or getting taken to court.

1. A motion for summary judgement is just that. It's a motion which is only "good" until it is disputed in court.
This means that if you have some paperwork on your side (which you just talked about) and you go to court and protest, then it must go to trial. If you have a pretty fair paper trail built up, then you should consider demanding trial before a jury rather than just before a judge. The reason for this is that most collection agency lawyers are not all that well prepared (psycologically speaking) to argue the case before a jury. They are likely to be much more used to just going in and getting the judgement quickly with no big hassle. Talk about putting it in front of a jury and they get a lot more nervous simply because collection agencies are not likely to be well received by a jury and more especially against a well prepared defendant who has documentation to back up his argument. If one does not have that, better to stay out of the lion's den in the first place.

Just my opinion and what I've heard and seen, and I'm not an attorney, so I'm not a legal expert like an attorney would be.

 

Bill:
You either have the wrong idea about what a summary proceeding is, or perhaps arenâ??t articulating the thought clearly enough (or maybe I just donâ??t get it?). Because generally speaking summary motions are granted upon undisputed facts, often gathered through the discovery process. Once a summary is granted the issues contained within the motion, or portion thereof, are no longer subject to dispute before a trier of fact (the court/jury).

Nonetheless, as I stated before it is highly unlikely (in the extreme) that a competent collection agent would file suit before compliance with the validation requirement; or within the 30-day related period. Frankly (my personal opinion), any collection agent that does file suit within this context is stupid and deserves to get nailed! Once again, in context with this thread, a collection agent filing suit (outside compliance with the validation requirement; or within the 30-day related period) stands a serious risk of litigation for violating the ACT (FDCPA).

In essence, your contention of a paper trail in context with this thread is a non-issue. Sure we can talk all day about hypothetical situations, but in the real-world of collections; the vast majority of agents wouldnâ??t even consider filing suit within the 30-day validation period, or without adequate compliance. To do otherwise is not only unintelligent, but also very deserving of getting knocked down a few pegs.

So without meaning to come off argumentative, a collection agent that files suit within the validation period or without compliance therewith can be litigated against as being in violation of law (FDCPA). (Which kind-of puts a hole in your new tactic for lawsuit/paper trail contention, in context with this thread.)

 

You either have the wrong idea about what a summary proceeding is, or perhaps arenâ??t articulating the thought clearly enough. Because generally speaking summary motions are granted upon undisputed facts, often gathered through the discovery process.

It has to be a matter of articulation and maybe trying to run two trains of thought down the same track in opposite directions.

I agree with you completely. The situation I am thinking about is where the collection agency goes to court, files motion for summary goes into court assumeing that the debtor will just not show up as usual. He believes there is going to be no dispute about the bill and that the debtor won't show his face. I'd bet that's the case in 80% or more of the cases. When the debtor does not show, no dispute arises and the motion is granted, of course. But our debtor (or his attorney) shows up and has strong objections and presents them well. Now it's going to go to trial. It is no longer a matter of undisputed fact. Litigation must now proceed. Let's use a TOTALLY INVENTED situation as example. Joe Sixpack has paid the bill 2 years ago, has his receipt or paid check but can't find it. Creditor's new secretary turns Joe over to Sleazebag collections by mistake. SleazeBag writes demand letters which Joe ignores because he knows he's got the check somewhere. Those guys are crazy, mutters Joe and goes on to work, and ignores them. He gets home to find a summons tacked to his door. It's Friday and court is Monday morning. He hunts for that cancelled check and can't find it, He calls up his good friend and attorney Sunday night and hires him to go fight. Friend Attorney quickly whips up a hitch in Sleazebags's git-along and rushes into the courtroom and puts in his appearance on Joe's behalf.

Now it's contested and is going to go to trial. It's no longer a matter of undisputed fact.
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Now then, that totally silly invented example is the type of thing I was speaking about. When valid dispute arises, not when it goes undisputed as is usually the case.
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Once a summary is granted the issues contained within the motion, or portion thereof, are no longer subject to dispute before a trier of fact (the court/jury).

You are absolutely right, of course, but only up to a point>
That point is in the event that say, a couple of years later Joe Sixpack goes downtown looking for a way to upset the apple cart. He finds solid proof of reverseable error in the original proceedings. He can file against those error(s) at any time and if the new trier of fact agrees with Joe, the original judgement becomes null and void.
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(A) Nonetheless, as I stated before it is highly unlikely (in the extreme) that a competent collection agent would file suit before compliance with the validation requirement; or (B) within the 30-day related period.

I'll agree with you on part (B) simply because in the first place it's highly unlikely that CA could even get it before a judge within 30 days except maybe in Podunk Center where CA is the only local lawyer and the local population of 1000 farmers never sues anybody for anything. The town drunk who never pays his bills anyway gets sued by Merchant A before the local JP who also is the town everything could hear the case almost immediately because he has little else to do.
There are such small town situations where trial could be set up before the local JP real quick. Outside of that, forget it.

On PART (B), I've seen more than one example where the collection agency didn't have the foggiest idea what is demanded of them under FDCPA and/or couldn't care less.
True, your (competent) collection agency would know and would comply with the FDCPA, but I've got one case right now I've been speaking about. It's a large collection agency owned and operated by two attorneys. The bill is $69 and is a hospital bill incurred by my sone several years ago. He's 19 now and still on SSI. Likely always will be. I demanded validation and they sent me a letter stating and I quote, "We called up the hospital and they said the debt is correct and valid."

And that's all they said. And they said that 2 months late.
So I sent them an estoppel letter just to see if they were stupid enough to fall for that about a month ago. I've heard absolutely nothing since. No reply, no telephone calls, no further demands for payment, nothing at all. It's not likely they are going to sue for $69, but I don't want to sit still for silence and the adverse CRA reports either. I'm thinking about sending a validation letter to the hospital itself and see how stupid they get too. Don't know for sure what the heck to do. I offered to pay the hospital if they would send me an itemized bill and agree in writing to remove the listing within 60 days, and they just ignored that too.
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Frankly (my personal opinion), any collection agent that does file suit within this context is stupid and deserves to get nailed! Once again, in context with this thread, a collection agent filing suit (outside compliance with the validation requirement; or within the 30-day related period) stands a serious risk of litigation for violating the ACT (FDCPA).

OH???? Wasn't it you (and others) who earlier said the 30 day rule didn't hold any water??? Or am I wrong on that?

As I've said before, I don't think I would care to rush into court crying that Sleaze CA failed to validate within 30 days, or 60 or even 90. I'd like something much better to howl about than that. Right now, with the $69 2 attorneys CA, that's about all I got to win with. They won't even communicate now. I sure wish they would do something, the more stupid the better, of course. I'd love to see them file suit or at least do something.
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In essence, your contention of a paper trail in context with this thread is a non-issue.

OH???? HELLO!!! Is that you there Anthony???
I said that if one has a pretty fair paper trail built up (meaning proof that the CA failed/refused to validate, verify, prove the debt upon demand, sent you letters demanding payment absent demanded validation, made harassing phone calls demanding payment after dispute letter sent certified, or other proveable violations of FDCPA, whatever they may have been, ALL of it perfectly proveable, then my "paper trail" is a non-issue???? HELLO???
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Sure we can talk all day about hypothetical situations, but in the real-world of collections; the vast majority of agents wouldnâ??t even consider filing suit within the 30-day validation period, or without adequate compliance. To do otherwise is not only unintelligent, but also very deserving of getting knocked down a few pegs.

I'd be willing to bet that if the bill I'm currently talking about were say $699 instead of $69, they's sue in a heartbeat absent demanded validation or proof. I'd be almost willing to bet they'd run to court demanding judgement with the only evidence of debt being the fact that they called up the hospital and the hospital said the debt was valid. Admitted, I don't think they would be QUITE that stupid, but from all I've got to go on so far, it wouldn't surprise me much.
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So without meaning to come off ((argumentative,)NOT AT ALL) a collection agent that files suit within the validation period or without compliance therewith can be litigated against as being in violation of law (FDCPA). (Which kind-of puts a hole in your new tactic for lawsuit/paper trail contention, in context with this thread.)

Well, not meaning to be argumentive either, just trying to learn something here, the only holes I can imagine punched into my statements had to put there by a 3 hole punching machine. I don't see how the hole(s) might be in my thinking.

Must be a problem of articulation on my part as you suspected. I'm not wanting to be argumentive either, Anthony, I just would appreciate it if you show me whee I went wrong.

Thanks in advance.