Board please clarify for lawsuit

Well Robin, it is a Federal Appeals Court opinion. It'll just come down to a the small claims court judge. Will he/she be more impressed with a Federal Appeals Court ruling or, the Wollman letter from an FTC staff attorney? If you live in the 4th District, you may want to speak with some lawyers and see how judges are ruling on the matter.

 

That's nuts. A debt collector could pick anyone and say that they owe any amount of money and they don't have to prove it?

B.S.!!!

 

Robin,

There is a thread addressing that 4th court decision, I'll see if I can find it for you.

I love the edcombs site, their whole firm and I have posted links myself to this same news reference.

I don't however know when it was written and I think, and don't have time at the moment to verify, that the awesome and lengthy article just hasn't been updated since the spears v brennan case.

The 4th court decision is old law and in fact, unless my memory is failing me, was made prior to the amendments of the FCRA -- however, the CA's still like to reference it hoping, or likely they themselves, not knowing that it is old and newer cases decided both trump, exceed, and define what is or isn't validation.

There are some cases, where it was good enough for the court that the OC having only computer records, as a business practice, were allowed to submit them. However, all of the cases are different, always are, it depends what you are arguing about.

In identity theft cases, computer records aren't enough. If you are claiming the OC's records are inaccurate, payment dates and the like, and all the OC has is computer records, those records, to prove accuracy seem to be acceptable and reasonable in some courts.

I think a court would likely accept, as a matter of business practice as well, that documentation was sent -- just because that is what businesses do as they carry on their business. And you know that is what they will say in a court room anyway, yep I sent it.

The FDCPA however says that (c) 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 think that provision covers I sent it -- well I didn't get it situations. Even if you don't validate within the initial 30 days, the CA gets to decide the initial 30 days as they aren't required to prove anything here, you still aren't admitting anything.

It's not good enough when you are requesting validation though, after whenever the CA says they first sent the notice, for them to say we already sent it and I'm not sending it again. Because, if you are disputing the accuracy, they need to prove it is accurate.

This is where, I think, the FDCPA and FCRA section 623 responsibilities and duties of information furnishers makes a key connection.

If they aren't willing to provide it to you and you then dispute the information with the CRA, they are required to reinvestigate and correct or update the information.

That act has to be based on something, though I think likely it is in fact based on nothing at all.

If then you were to contact the CA again and say, you verified inaccurate information, it is again their burden to prove that they did not.

This is where the newest cases, like chase v. manhattan come in, if after you have followed the process, they still won't or can't report correctly, they have a liability to you as an individual.

And if you were then to pursue legal action, they would be forced by the court to provide, that which they should have provided all along, validation.

Sassy

 

FDCPA § 807. False or misleading representations [15 USC 1962e]

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

Your right to dispute, under the FCRA never goes away.

And once notified of a dispute by a consumer, as an information furnisher, they are required to note the account as disptuted.

§ 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.

(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.

Further, you have to check your own State's laws, my state for instance, requires that collection must cease until provided, any relevant documentation requested, WHENEVER it is requested.

Here's the FTC Opinion letter:

http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm
UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C. 20580

Federal Trade Commission

December 23, 1997

Robert G. Cass
Compliance Counsel
Commercial Financial Services, Inc.
2448 E. 81st Street, Suite 5500
Tulsa, OK 74137-4248

Dear Mr. Cass:

Mr. Medine has asked me to reply to your letter of October 28, 1997, concerning the circumstances under which a debt collector may report a "charged-off debt" to a consumer reporting agency under the enclosed Fair Debt Collection Practices Act. In that letter, you pose four questions, which I set out below with our answers.

I. "Is it permissible under the FDCPA for a debt collector to report charged-off debts to a consumer reporting agency during the term of the 30-day validation period detailed in Section 1692g?" Yes. As stated in the Commission's Staff Commentary on the FDCPA (copy enclosed), a debt collector may accurately report a debt to a consumer reporting agency within the thirty day validation period (p. 50103). We do not regard the action of reporting a debt to a consumer reporting agency as inconsistent with the consumer's dispute or verification rights under § 1692g.

II. "Is it permissible under the FDCPA for a debt collector to report, or continue to report, a consumer's charged-off debt to a consumer reporting agency after the debt collector has received, but not responded to, a consumer's written dispute during the 30-day validation period detailed in § 1692g?" As you know, Section 1692g(b) requires the debt collector to cease collection of the debt at issue if a written dispute is received within the 30-day validation period until verification is obtained. Because we believe that reporting a charged-off debt to a consumer reporting agency, particularly at this stage of the collection process, constitutes "collection activity" on the part of the collector, our answer to your question is No. Although the FDCPA is unclear on this point, we believe the reality is that debt collectors use the reporting mechanism as a tool to persuade consumers to pay, just like dunning letters and telephone calls. Of course, if a dispute is received after a debt has been reported to a consumer reporting agency, the debt collector is obligated by Section 1692e(8) to inform the consumer reporting agency of the dispute.

III. "Is it permissible under the FDCPA to cease collection of a debt rather than respond to a written dispute from a consumer received during the 30-day validation period?" Yes. There is nothing in the FDCPA that requires a debt collector to continue collecting a debt after a written dispute is received. Further, 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).

IV. "Would the following action by a debt collector constitute continued collection activity under § 1692g(b): reporting a charged-off consumer debt to a consumer reporting agency as disputed in accordance with § 1692e(8), when the debt collector became aware of the dispute when the consumer sent a written dispute to the debt collector during the 30-day validation period, and no verification of the debt has been provided by the debt collector?" Yes. As stated in our answer to Question II, we view reporting to a consumer reporting agency as a collection activity prohibited by § 1692g(b) after a written dispute is received and no verification has been provided. Again, however, a debt collector must report a dispute received after a debt has been reported under § 1692e(8).

I hope this is responsive to your request.

Sincerely,

John F. LeFevre
Attorney

Enclosure

 

from this thread: http://consumers.creditnet.com/straighttalk/board/showthread.php?threadid=27496

Scoob,

I can't figure out how to format this to make it more readable, so, it's a cut and paste job, parts of your letter and comments after.

"We are in receipt of your fax dated 5/22/02 and your acct has been reported to all credit bureaus as disputed since that date."

You could ask for a copy of whatever documentation they provided to the bureaus showing they really did this.

"The bureaus themselves have 30 days in which to make a change, so your CBR was probably in the lag time period. "

I believe it says something to the effect of, the bureaus can't provide a report including the information that is disputed without the notation -- no timeframes mentioned. Therefore, the next time you pull your report it should either show the dispute notation or the information shouldn't be there.

"You state that federal law requires that we provide all statements evidencing the underlying purchases on this account. That is an incorrect assessment of the law. In this connection, I refer you to Graziano v. Harrison, 950 F. 2d 107 (3rd Cir. 1991), in which a computer printout of the details of the debt was considered sufficient by the Court. "

I don't see where you stated the federal law requires blah blah blah. However, in my state (Arizona), the statutes do indicate just that, evidence of the underlying service or merchandise creating the debt -- you might want to check your statutes as well.

I can't find that case that he refers to online, there's tons of references to it. That court only has online cases beginning in 1994.

Who cares anyway, that was prior to the effective date of the FCRA and FDCPA changes so it couldn't have been referring to a collection agency AND he cleverly doesn't say what a printout was sufficient FOR by the court.

I understand computer generated documents from original creditors as a course of business are usually accepted, that's not true for collection agencies though and is exactly what the FDCPA was to address -- collectors without any first-hand knowledge thinking their computer records were enough.

The FTC in it's 1997 and 1998 reports to the House of Representatives say this about that case:

Two federal courts of appeals decisions have strongly implied that the thirty-day period is a firm grace period, making a demand for payment within the first thirty days impermissible. Graziano v. Harrison, 950 F.2d 107, 111-13 (3d Cir. 1991); Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1226 (9th Cir. 1988).(27) The Commission considers this interpretation erroneous.

It's usually referenced in this way as well as the wording of the initial communication and not as a citation of verification documentation.

Another judge in NY just disagreed with the judge in this case on another matter, saying that disputes don't have to be in writing.

That case is just too old and especially that it is prior to the FDCPA anyway CAN'T relate at all to validation standards. AND, because the FCRA provisions for furnishers of information was enacted about the same time, it can only be referring to verification as a result of a dispute with a CRA -- prior to those provisions, there were no duties imposed on information furnishers, only the CRA's, and no validation requirements.

He's just blowing smoke with that case and making big bucks for forwarding to you inapplicable caselaw.

You'll have to summons Lizardking and Marie as LKH suggested, Lizardking had something similiar with an attorney stating he had no cause of action based on some outdated caselaw.

"See also Chaudrv v, Gallerizzo (4th Cir. 1999) 174 F3d 394, in which the Court stated, "... verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt coilector is not required to keep detailed files of the debt. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt," citing Graziano. Moreover, there is no requirement that the level of verification of the debt that you are demanding be provided."

Here again, the attorney is being clever "verification" isn't "validation" and is referring to an altogether different provision.

This case is available at findlaw, same link as already posted.

"As part of our effort to verify this account we have requested that the original documentation from this account be sent to us. We will forward those documents as soon as we receive them."

This part cracks me up, as part of our effort to verify this account -- he just admitted it's not! he can't be continuing collection activity until he does.

"Our records indicate that PRA III, LLC purchased this Sears Account on 7/30/01. At the time of purchase the outstanding balance was $1574.62. Our records further show that the account was opened 6/1/96 and was charged-off by the original creditor on 2/16/00. The last payment on the account was made on 4/16/99 in the amount of $100. "

Fine, wonderful, whatever -- his records don't count, he has to get the information from the OC.

"Please send copies of any communications you may have had with Sears National Bank with
regard to this account. "

This cracks me up too -- why would you forward any communications to him, you requested validation and said the account wasn't yours.

Sassy

 

Thanx Sassy,

The case is at: http://laws.lp.findlaw.com/4th/981024p.html

and was decided on 4/5/99.

Edcombs Synopsis was written sometime in 99, shortly after the CHAUDHRY v GALLERIZZO case decision.

If you care to study the case I think it will become obvious that the illustrious judges (MURNAGHAN, LUTTIG, and KING) in the case fail miserably to draw the appropriate distinction between "verification" and "validation", as pointed out by Sassy.

Not withstanding the fact that Chaudry asserts some rather silly arguments, which pisses off any court.

For example he, claims that when the CA sent documents to his atty. instead of directly to him, it was a violation. The court rightfully concluded that because the law says that the CA must communicate with the debtors atty. and not the debtor, (once they are aware of the debtors atty's. existance) it's not a violation.

A totally rediculous argument in the first place. Try something like that and yeppers, you'll lose your case.

Chaudry should hold classes on "how to piss off the judge".

LOL

 

As an aside... if a collection agency sues you for an account that's over $500...

can't you also use the Statute of Frauds defense?
(over $500 must be in writing)... and thus... without a contract, they can't collect regardless of all the printouts they manufacture.???

frankly, this trend for colletion agencies to collect on and later sue on accounts with no original contract and only a computer contract and their word that the debt is valid... is chilling ;(

although.. if the judge seems predisposed to this type of evidence... then couldn't you go in with the exact same evidence against the collection agency and then say... "well, your honor... if that's enough proof of a debt... then I have the exact same proof that the collection agency owes me the exact amount..." whip out a computer printout and enter it into evidence...

frankly...if a ca came after me without any contract I'd use words like fraud... then it seems if you put the element of fraud into it they seem to have a higher burden of proof... one that should be there regardless of the amount...

 

if a ca atty brought in an outdated case (one that predates the fdcpa)... couldn't you file a complaint with the state bar since he's trying to sway a decision with information he knows to be out of date

 

Hey Sassy..are you an atty?

 

LOL Marie, no, not even a wannabe.

I've just a wild hair passion for "power to the people" and most especially when we are being taking advantage of and working so hard for something that should just be a responsible business practice.

I only speak for myself.

Sassy