Is this validation?

[insomniac]

Small-town CA is trying to collect a few hundred bucks on a closed MasterCard account with a credit union I used to use as my primary bank. CA is tacking on a 30% collection fee that I have no interest in paying. The OC is still sending me monthly statements that don't include the collection fee, and I'm still making regular payments directly to the OC.

I DV'ed the CA. CA sent me a computer printout of the last six months of activity (I had the card for four years before the OC closed it), plus the original application with my signature. Is this validation? (CA is not reporting to any credit bureau.)

What's my best course of action? Should I just send a settlement letter and get it over with?

[Josh Mcgrath]

if they sent the original application with YOUR signature, that is proper validation.

[insomniac]

I should have said they sent a copy of the initial application with my signature, but yes, that's what they sent. I thought they had to send a complete payment history, though; they only sent me the last six months of activity.

[gdouglaslee]

A copy is perfectly fine unless there is a genuine issue of its origin.

A signed application is validation only to the extent that it would prove they have the correct debt and that they have the authority to collect the debt but it does not prove that the account has not been paid in full or in part, which is the third part of the three part test for validation.

Aside from validation, a signed application only proves the following:

1) At some point in time, you had an interest in obtaining a card

2) At some point in time, you actually completed and submitted an application

Other than that, it proves absolutely nothing. A signed application is not proof that you were approved for credit, nor is it proof that you were actually issued a card nor is it proof that you used the card and became bound by the terms of the cardholder agreement.

A signed application in conjunction with billing statements from the original creditor would prove by a preponderance of evidence that the account was yours, that you were issued a card and that you used it and became bound to the terms of the cardholder agreement.

As far as the 30% fee goes, you would need to review the cardholder agreement to determine if those fees are permitted. And no, credit unions rarely report account to credit report agencies. There are a handful that do, but the vast majority (90%) do not.

[insomniac]

The credit union is reporting the MasterCard account, and it's presently "paid as agreed" since I'm sending them partial payments. The CA is not reporting the account separately as a collection account.

Thanks for the info.

[RedDog]

I would contact the Credit Union and have them recall the debt from the CA. If they won't, ask them why they are accepting payments.

If they do recall the debt and the CA continues to call you then go after both of them for $$$.

If all else fails go to www.budhibbs.com and send them his Cease & Desist letter.

Good Luck