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swsabean
Joined: 12 Jul 2008
swsabean's page
Posts: 11
577 Magic Points
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Subject: Debt Validation
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Thu Dec 11, 2008 9:56 pm
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There is an important question that I have been unable to find any reliable information on: What, exactly, constitutes validation of debt? The statute (FDCPA) says that such validation must be provided by a debt collector when requested to do so by the consumer, or cease collection activities. However, it does not say what that validation should consist of. Thus, it seems that this determination has been left to the courts.
The only decision that I have been able to find on this was rendered in 1999 by the 4th Circuit Court of Appeals (Chaudhry v. Gallerizzo, 174 F.3d 394). The opinion of the Court was that "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 collector is not required to keep detailed files of the alleged debt."
This is a disturbing statement. It seems like they are saying that debt verification consists of the debt collector stating in writing that "you owe because we say you owe." It leaves the consumer in the lurch, so to speak.
Would anyone else care to comment? |
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goodnatured
Joined: 03 Nov 2007
goodnatured's page
Posts: 3735
10 Magic Points
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Fri Dec 12, 2008 1:26 am
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I have struggled to find an answer on this also, no one seems to know. Willl wait and see what typ of answers that5 you get here.
_________________
Goodnatured,
http://cashinpocket.synthasite.com/
for all the ways I make $$ online |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1334
1 Magic Points
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Subject: credit
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Fri Dec 12, 2008 5:54 am
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| I have OC's and CA's on my CR.....like SOO many other people, I'm sure. I'm REALLY starting to try to clean up my credit now. Do I send a DV to BOTH the OC's and the CA's? |
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anthony
Joined: 31 Jul 2006
anthony's page
Posts: 550
13573 Magic Points
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Fri Dec 12, 2008 6:36 am
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Hi Chargers
You need not send debt validation letters to both the collection agency and the original creditor. Check out your credit report and find out the latest listing against the debt. If it is the name of the collection agency, then send a debt validation letter to the CA and if it is the name of the OC, then send a debt validation letter to the OC. However, if the debt has been sold off to the CA by the OC, (which you can become sure of if the CA validates the debt) you need to come to a pay for deletion agreement with the CA to get the negative listing removed from your report as soon as you pay off the debt in full.
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Anthony Marx
A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible. |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1334
1 Magic Points
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Subject: credit
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Fri Dec 12, 2008 6:48 am
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| Thanks, ANTHONY, for the reply. If the debt is PIF with the CA, and the CA removes the debt, does the debt, listed with the OC, AUTOMATICALLY come off, too? |
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Justin
Joined: 17 Jul 2006
Justin's page
Posts: 1093
25288 Magic Points
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Fri Dec 12, 2008 6:53 am
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Hi swsabean
If you send a debt validation letter to the collection agency, then the CA should send you a copy of the agreement between you and the original creditor, proof that the OC has either sold off the debt to the CA or has transferred the right to collect the debt to the CA and the statements of the outstanding amount. However, if the debt is still with the OC, and you send a DV letter to the OC, the OC must send you a copy of the original debt agreement and the statement of outstanding amounts.
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All the Best 
Justin |
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anthony
Joined: 31 Jul 2006
anthony's page
Posts: 550
13573 Magic Points
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Fri Dec 12, 2008 7:01 am
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Hi Chargers
If the debt has been sold off to the collection agency and you come to a repayment agreement with the collection agency, then only the CA listing gets removed from your report and not the OC listing. The OC listing will however stay in your credit report for seven years. Only if your debt has not been sold off to the CA and the OC still owns your debt (if the OC has only transferred the right to collect the debt to the CA then the OC still owns the debt) and you come to a PFD agreement with the OC and pay off the debt to the OC, then both the OC and the CA listing will be removed from your credit report.
_________________
Anthony Marx
A positive attitude is not achieved by turning a blind eye to the negative, but rather by responding to every situation in the most positive way possible. |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1334
1 Magic Points
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Subject: credit
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Fri Dec 12, 2008 7:04 am
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| WOW!! That's a good explanation 'in a nut shell.' I appriciate the help. Just trying to 'attack' my credit now. Just trying to get ideas, where to start, etc. |
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fireyone
Joined: 26 Feb 2008
fireyone's page
Posts: 4124
1011 Magic Points
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Fri Dec 12, 2008 11:28 am
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swsabean,
Getting back to your original question. Proper debt validation is a copy of the original agreement between you and the creditor, signed by you. They need to have that original contract plus proof that they have bought the debt and that it now belongs to them which would entitle them to legally collect. Can you tell us how old this debt is and with whom the creditor is? States have statute of limitations in which gives them a certain period they can legally sue and win on a debt. Each state can have a different time period. If you are having a problem with a debt collector, you need to know the date of the last payment you made on the account they are suing for to see of you are protected. |
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swsabean
Joined: 12 Jul 2008
swsabean's page
Posts: 11
577 Magic Points
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Fri Dec 12, 2008 2:07 pm
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Thanks to everyone who has responded so far. The question I posed was not related to any particular credit problem, although goodness knows I have plenty of those. It was a general question. Basically, my question is this: What is the legal status of debt verification?
Now, I have seen information here and elsewhere that claims that the debt collector must provide a signed contract with the original creditor, and/or detailed billing information, and/or information regarding the purchase of the debt, etc. For those who believe this to be the case, my question is, where are you getting your information?
The standard scenario, as described here and elsewhere, is that when one receives a collection notice from a debt collector, one fires off a letter to the debt collector demanding verification of the debt in the form of the detailed information listed above. If the debt collector does not comply with the request as stated, and continues collection activities, the one can file a lawsuit in Federal court for violations of the FDCPA.
But this is exactly one of the issues at stake in Chaudhry v. Gallerizzo. What makes the case troublesome for the consumer is that the 4th Circuit Court of Appeals, in upholding the decision of the lower court, gave in their opinion the rather slim definition of debt verification that I quoted at the outset of this thread.
Now, I freely admit that there may other cases which shed more light on the subject. But, at this time, I have been unable to find any. I have also checked the Staff Attorney opinions of the FTC, but I have not found anything relevant there either.
As always, I welcome further commentary on this important issue. |
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swsabean
Joined: 12 Jul 2008
swsabean's page
Posts: 11
577 Magic Points
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Sat Dec 13, 2008 12:07 am
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| More bad news. I found another case relating to debt verification. In 2006, the 9th Circuit Court of Appeals affirmed the Chaudhry Court's ruling in Clark v. Capital Credit & Collection Servs. (460 F.3d 1162). Here is what the Clark Court had to say on the issue: "we adopt as a baseline the ... reasonable standard articulated by the Fourth Circuit in Chaudhry v. Gallerizzo" |
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sdchargers_63
Joined: 13 Aug 2007
sdchargers_63's page
Posts: 1334
1 Magic Points
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Subject: credit
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Sat Dec 13, 2008 3:23 am
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| If I asked a OC or CA for a DV letter, do they have a certain amount of time to send it to me? What if they DON'T send me one within the 'time allowed'? Anything I can do? Do I just ASSUME the debt is NOT validated? |
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Justin
Joined: 17 Jul 2006
Justin's page
Posts: 1093
25288 Magic Points
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Sat Dec 13, 2008 10:39 am
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Hi swsabean
It is true that if you get a collection notice from the creditor or the collection agency, you need to send them a validation letter asking them for details like the outstanding bills and a copy of the original signed contract. But you can also send a validation letter if a debt collector or OC lists his name in your credit report against a particular debt which you think you do not owe.
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All the Best
Justin |
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Doc
Joined: 02 Dec 2008
Doc's page
Posts: 165
Location: McKinney, TX
219 Magic Points
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Subject: Understand the difference...
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Sat Dec 13, 2008 1:00 pm
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There is a difference between "validation" and "verification"...
Validation requires the collector to work in concert with the original creditor, and requires them to actually view "original source documents" from the original creditor. This is the process required by consumer's written request, upon receipt of the very first communication from the collector.
Verification, however, is simply a very vague check of the basic information. This is the process used by he bureaus, upon receipt of a consumer dispute...
Unfortunately, most collectors ONLY perform the VERIFICATION process, and not VALIDATION... And they get away with it, because no one calls them on it...
Truth be told, there exists no real statute to require that they send a copy of a contract. That is more viable in civil action... Law 101... "No contract, no debt." There's also a significant amount of other information that atty's ask for in civl cases, that is not required by statute...
_________________
-Doc Compton, Omega Credit Repair
I provide info for free, & all I ask is that you visit my site... I don't wanna sell you anything, I just wanna increase my traffic, and push my site up in the search engine rankings...
http://www.omegacreditrepair.com |
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Doc
Joined: 02 Dec 2008
Doc's page
Posts: 165
Location: McKinney, TX
219 Magic Points
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Sat Dec 13, 2008 5:16 pm
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That's a question best suited for a lawyer in *that* state!
_________________
-Doc Compton, Omega Credit Repair
I provide info for free, & all I ask is that you visit my site... I don't wanna sell you anything, I just wanna increase my traffic, and push my site up in the search engine rankings...
http://www.omegacreditrepair.com |
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