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Assignment vs. Purchase


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I'm a bit confused regarding assignment versus purchase of a debt. Hopefully someone could clear this up.

I get a notice from a collection agent that says in part, "RE: UPAYUS,INC. AS ASSIGNEE OF SUPERBANK."

In another communication from the same collection agent it clearly refers to a PURCHASE of the debt.

I was under the impression that an assignment of debt was NOT a purchase. Someone else has told me that as an ASSIGNEE OF... the collector is now the creditor and, as a result, not bound by FDCPA.

Could someone explain to me the difference between an assigment and purchase of a debt? Are there any circumstances when a collection agent becomes like the original creditor and thus, not bound by FDCPA?

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<blockquote>Originally posted by cybercrusader

I'm a bit confused regarding assignment versus purchase of a debt. Hopefully someone could clear this up.

I get a notice from a collection agent that says in part, "RE: UPAYUS,INC. AS ASSIGNEE OF SUPERBANK."

In another communication from the same collection agent it clearly refers to a PURCHASE of the debt.

I was under the impression that an assignment of debt was NOT a purchase. Someone else has told me that as an ASSIGNEE OF... the collector is now the creditor and, as a result, not bound by FDCPA.

Could someone explain to me the difference between an assigment and purchase of a debt? Are there any circumstances when a collection agent becomes like the original creditor and thus, not bound by FDCPA?

</blockquote>

In either case, if the debt was delinquent when they were assigned it/purchased it, they are bound by the FDCPA.

Assignment is where the OC "hires" the CA to collect the debt, usually for a commission or percentage of the debt owed. Still bound by the FDCPA. Whoever told you that assignees were not bound by the FDCPA was wrong.

When a CA purchases it, usually for pennies on the dollar or fractions of pennies on the dollar, they are now the legal owners of the debt, but are still bound by the FDCPA.

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Well, figure THIS one out. I just got a notice from Household that my account has been "sold and assigned" to Sherman Acquisitions (bad, bad debt buyers !!!)

Sold AND Assigned ??? Ok.. so which one is it ? See.. they try to confuse you with this kind of verbage.

Since I also just got yet another letter from Account Solutions Group (ASG), it may clear this up. ASG's letter says Sherman 'purchased' the debt from Household and Sherman has 'assigned' the account to ASG for collections.

Geez.. what a web .. but they're ALL still under the FDCPA.. so .. DING - new round of validations begin !

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You had a Household account that was sold. If you don't mind me asking, was it a credit card or loan? Also, how much was the debt? I have a rather substantial collection account with them and I am wondering if they will sue or sell. If you don't feel comfortable posting that info, please feel free to email me. Thanks in advance!

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<blockquote>Originally posted by cookiemnster

Assignment is where the OC "hires" the CA to collect the debt, usually for a commission or percentage of the debt owed. Still bound by the FDCPA. Whoever told you that assignees were not bound by the FDCPA was wrong.

</blockquote>

Believe it or not, but it was an attorney who told me that. And he was adamant about it, hence my confusion. The firm that he works for deals on the other end of debt collections - the OC and CA side (they are not involved with my situation by the way). I'm wondering if he has a mental block for this.

Incidentally, what about the wording of some contracts that say, "debtor agrees to be responsible for payment of this debt to creditor OR ITS ASSIGNS"? Would they still be bound by FDCPA?

I have no idea what my contract says, by the way. I just re-read the article on debt validation. This a&#036;&#036; i nee thing is becoming an issue in my situation and I just wanted some feedback.

[Edit by cybercrusader on Wednesday, January 8, 2003 @ 04:20 PM]

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<blockquote>Originally posted by cybercrusader

Believe it or not, but it was an attorney who told me that. And he was adamant about it, hence my confusion. The firm that he works for deals on the other end of debt collections - the OC and CA side (they are not involved with my situation by the way). I'm wondering if he has a mental block for this.

Incidentally, what about the wording of some contracts that say, "debtor agrees to be responsible for payment of this debt to creditor OR ITS ASSIGNS"? Would they still be bound by FDCPA?

</blockquote>

Yes.

Check out the opinion letters the FTC has published on the FDCPA. That should help clear up a lot of your confusion, they answer these questions in those letters.

http://www.ftc.gov/os/statutes/fdcpa/letters.htm

[Edit by cookiemnster on Wednesday, January 8, 2003 @ 05:03 PM]

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Here's some information I posted a while back regarding a similar issue. You might wanna check it out and read the links.

http://www.debt-consolidation-credit-repair-service.com/cgi-local/cutecast/cutecast.pl?forum=4&thread=1291

As far as your question regarding the wording of the contract, they would still fall under the FDCPA as the account is delinquent as the time of transfer.

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James,

Actually I have TWO accounts in collections from Household, both were credit cards backed by Household. One was a BestBuy account and that total WAS about $700 when it was charged off, now they've got it up over $1000. The 2nd was a Rhodes Furniture account. That one was about $250 at charge-off, they've inflated that to about $700 now. I could probably negotiate to pay both of these off now that I have a job again, but I won't pay a CA. There are too many other vulture CA's circling for accounts that were a lot higher (no cc more than 4K) and if you pay one, they all dive in for the kill.

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  • 2 weeks later...

I believe (although I am no legal expert) that the issue of assignment vs. purchase is a moot point in my state (PA) because the debt collection law applies to BOTH CA's AND OC'S.

I just read the PA debt collection law over the weekend. I suppose it's a good idea to read up on your state's law.

C>

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An assignment is when a creditor passes the note to another. Selling the account is still an assignment. However, if an account is assigned or sold after it is delinquent, the FTC has said that the assignee is now a DC under the FDCPA.

For example, when you buy a car, the contract you sign at the dealer is often assigned to a bank. If you later go delinquent, it may be assigned to a CA. In this case, the Bank would be an OC and not subject to the FDCPA, while the CA would. Did I explain that clearly?

The only reason it is important here, is that you are trying to determine if the CA now owns the note, or if the CA is merely acting as a sort of an agent for the OC. Even though the CA would still be subject to the FDCPA, the owner of a note may sue to recover lost funds, the agent may not.

Most state require that the consumer must be notified whenever a loan is reassigned (delinquent or not). Check your state laws.

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<blockquote>Originally posted by sharpenu

An assignment is when a creditor passes the note to another. Selling the account is still an assignment. However, if an account is assigned or sold after it is delinquent, the FTC has said that the assignee is now a DC under the FDCPA.

For example, when you buy a car, the contract you sign at the dealer is often assigned to a bank. If you later go delinquent, it may be assigned to a CA. In this case, the Bank would be an OC and not subject to the FDCPA, while the CA would. Did I explain that clearly?

The only reason it is important here, is that you are trying to determine if the CA now owns the note, or if the CA is merely acting as a sort of an agent for the OC. Even though the CA would still be subject to the FDCPA, the owner of a note may sue to recover lost funds, the agent may not.

Most state require that the consumer must be notified whenever a loan is reassigned (delinquent or not). Check your state laws.

</blockquote>

Perhaps I'm confused, but if an owner can sue and an agent cannot, how is selling the account still an assignment?

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Actually, if the situation involved a car, neither would likely occur; the car would repoed after a couple of missed payments.

An obligation can be assigned, (sold or transferred) to anyone while current and that person or entity becomes the OC. However, in a delinquency situation, the rules change when the account is deemed bad debt and sold for usually pennies on the dollar to investors.

[Edit by ghacorp on Monday, January 20, 2003 @ 03:53 PM]

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