Validation of Debt: The Law

• 
  With an absolute respect to the excellent Butch's post "What Is Validation? (which I have read in its entirety) and to the tens, if not hundreds of discussions about it, there is always a problem with finding the right section of the law, or a specific court case, or a Staff Opinion Letter, so lets try to put it all together.
  
  Note: Even if it looks like a commentary, the main purpose of this post is to hold links to all debt validation legal quotes, cites and references. Anything regarding reporting a debt to the CRA, or not reporting a notice of dispute, or any other comments regarding debt validation belong to the thread above, unless you think something in this post is wrong.
  
  
  1. The starting point for a debt validation is the "initial communication", so lets first see what it is.
  
  • Section 803(2) defines the term "communication" as "[color=0066FF]the conveying of information regarding a debt directly or indirectly to any person through any medium[/color]". Clear enough.
    
    In the Heintz vs Jenkins case the court states that even "[color=0066FF]a lawyer who regularly tries to obtain payment of consumer debts through legal proceedings meets the Act's definition of "debt collector"[/color]", it is further quoted by the FTC letters to Mezines and Berger, so all the information exchanged between us and the collector's attorney through the court is also considered a communication.
  
  2. Section §809(a) tells us that a debt collector (DC) have to send us a written notice containing:
  
  • [color=0066FF](1) the amount of the debt;
    (2) the name of the creditor to whom the debt is owed;
    (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;
    (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and
    (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.[/color]
    
    The DC must do this within five days after the initial communication with us regarding the debt.
  
  3. According to Section 809(a)(4) we may dispute the information in this notice. The time frame is set by Section §809(a)(3) as "[color=0066FF]within thirty days after receipt of the notice[/color]".
  
  • Off the topic note: Someone may get confused because of the 30-day period, so let me make it clear - if you fail to dispute the debt within the 30 days, they are allowed to assume the debt is valid. Read it again - they are allowed to assume the debt is valid. Section 809(c) clearly states that the "[color=0066FF]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[/color]", so if you missed the 30-day period, you haven't admitted the debt is yours and you haven't lost any of your rights, no matter what they want you to believe.
  
  4. If we do dispute, Section 809(b) obligates the DC to "[color=0066FF]cease collection of the debt ... until the debt collector obtains verification of the debt ... and a copy of such verification ... is mailed to the consumer by the debt collector[/color]".
  
  • 3.1. According to Section §808(1) "[color=0066FF]the collection of any amount (including any interest, fee, charge, or expense incidental to the principal obligation) unless such amount is expressly authorized by the agreement creating the debt or permitted by law[/color]" is a violation.
    
    So, they must have the agreement which created the debt.
    
    4.2.1. According to FRE Rule 1002, "[color=0066FF]to prove the content of a writing ... the original writing ... is required[/color]". The Notes to Rule 1002 further define that "[color=0066FF]If, however, the event is sought to be proved by the written record, the rule applies[/color]".
    
    4.2.1. FRE Rule 1003 adds that "[color=0066FF]a duplicate is admissible to the same extent as an original unless (1) a genuine question is raised as to the authenticity of the original[/color]".
    
    So, if we claim the debt is not ours they must have not only a copy of the agreement, but the original agreement.
    
    4.3. The FTC letter to Wollman also states that "[color=0066FF]... it is important that the verification of the identity of the consumer and the amount of the debt be obtained directly from the creditor. Mere itemization of what the debt collector already has does not accomplish this purpose.[/color]"
    
    So, they cannot send us just a printout of what they have on their computer screen. It must be clear that the information comes from the original creditor.
    
    4.4. The Section §808(1) also includes in the validation "[color=0066FF]... any interest, fee, charge, or expense incidental to the principal obligation ...[/color]"
    
    In the Spears vs Brennan case the court states that the "[color=0066FF]contract in no way provides sufficient verification of the debt[/color]", because it does not contain "[color=0066FF]... accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments ...[/color]"
    
    In the Shea vs Codilis case the court states that "[color=0066FF]When 1692g(a)(1) requires collectors to inform debtors of "the amount of the debt," it means exactly that. An "amount" is a dollar figure, not just a description of the type of charge owed[/color]", and "[color=0066FF]By withholding a full and complete disclosure of the "amount of the debt" owed by Plaintiffs, Defendants, as a matter of law, violated § 1692g(a)(1).[/color]"
    
    So, it's not just the original agreement, but also complete accounting showing how the full amount of the debt was calculated.
    
    4.5. Now, you may have noticed that there is no time limit set for the DC to produce the validation. The FTC letter to Cass says that "[color=0066FF]... 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 ...[/color]" So, since the DC must cease all collection activity, do we really care about the time limit?
  
  5. Feel free to add anything else that I have missed ...

 

• Well, lets clear it up ...
  
  • [color=0066FF]§ 809 (a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall ...[/color]
  1. As I already said, if the CA's attorney takes you to court, this is also considered a communication.
  
  2. If a CA calls you on the phone yelling "Give us our money", this is a communication.
  
  3. In reality, you have no idea you have a CA after you, unless they let you know it, or you see it in your report, or both.
  
  4. "Initial" means "first". So, first time you and a debt collector communicated about a debt, that was the "initial" communication, no matter who made the call.
  
  So, it's not necessarily "ANY time a consumer 1st initiates" it, and it's not necessarily a "validation request with a CA".
  
  
  I hope it makes more sense now ...

 

• I know, Sassy ... You are right - there are tons of posts about this topic and it's not clear yet. This is why the idea of this thread is to get all the law stuff in one place, so everyone can read it and think it over for themselves.

 

Re: Re: Re: Validation of Debt: The Law

• I hear you, Sassy. But, as I said in my note at the top, this thread is supposed to serve as a reference for all legal quotes. I didn't mean to open a discussion and to double Butch's thread. I just wanted us to have all links in one place.
  
  Otherwise, I do agree with you that purpose and intent are important parts of understanding the debt validation.

 

• You are right, lbrown, but the forgery is a felony and goes under other laws. The point here is that if you dispute a debt as "not mine", they must have the original agreement.

• Again, the point is, that even the perfect contract is not a verification of a debt, because it doesn't contain the full amount of debt (primary debt plus fees and charges).