Debt Validation

[irvingpiano]

I have received my first response and they provided me with a contract that I clearly signed, stating that I would pay for the drug-screen and physical if I quit within a year.

I did quit on the second day, but the collection agency has not proven to me that I took a drug screen and physical and therefore are still in violation. Is that correct? They have to prove to me that the Original Creditor actually paid for a drug screen and physical for me.

I just want to make sure I understand this correctly before I send the follow up letter.

I sincerely appreciate any and all help. Thank you in advance.

[LNY]

Hi Irving,

I moved your post into Debt Validation so that people who have experience in this area will see it.

[Raysway]

Personally, I think you may be reaching a bit with this one, irving.

[LNY]

But like any other debt, don't they have to prove he owes it and that they are legally allowed to collect it from him, if he requests validation? They have proven that he agreed to pay for tests, but not that the tests were actually done and paid for by the employer...

Of course there is the natural assumption that he would not have even been hired if the tests had NOT been done... but for all we know, the contract's language may call for him to pass the tests "within the first week of employment" or something like that.

[irvingpiano]

Just because they print a bill with an account number doesn't constitute validation. I seriously doubt, this pathetic company, has any record of ever paying for a drug screen/physical on my behalf.

Proof (to me) would be evidence that I was actually administered a drug screen/physical and proof that the original creditor paid for these services. Is that not right?

[Raysway]

Whoa guys...I'm on your side!

Seriously though...

LNY: I totally agree. He definitely should've DV'd as always...especially to prove that they are the entity with whom he should be dealing. I have not seen the contract nor am I well-versed on contract law, but irving's original statement was that he signed a contract to pay for the test/exam if he quit in a year. There was no mention that the contract stated that test even ever had to be taken. I also agree with the "natural assumption" you propose.

irving: I never meant to imply that you should not have DV'd nor should you settle for a response with which you are dissatisfied. I just PERSONALLY don't see why they should have to prove the exams were taken...that's all.

Believe me, my friend...I'm pulling for you!

[LNY]

Whoa guys...I'm on your side!

Seriously though...

LNY: I totally agree. He definitely should've DV'd as always...especially to prove that they are the entity with whom he should be dealing. I have not seen the contract nor am I well-versed on contract law, but irving's original statement was that he signed a contract to pay for the test/exam if he quit in a year. There was no mention that the contract stated that test even ever had to be taken. I also agree with the "natural assumption" you propose.

irving: I never meant to imply that you should not have DV'd nor should you settle for a response with which you are dissatisfied. I just PERSONALLY don't see why they should have to prove the exams were taken...that's all.

Believe me, my friend...I'm pulling for you!

Ray, Ray, Ray... cool thy jets! I was playing 's advocate. Bringing up several factors that may or may not apply, but could come into play depending on the rest of the details. For the sake or argument and whatnot.

[Recovering Attorney]

Did you HAVE the tests they claim they paid for?

[LNY]

I believe he did, but still wants them to play by the rules... much like people who know full well they owe a credit card debt, but still DV the CA and make them prove it.

[irvingpiano]

That's right LNY. I want them to provide me LEGAL validation. Sending me a bill is not validation. Providing me with proof that I actually took a drug screen and that you paid for it, is legal validation. Also they haven't provided me with evidence that they are collecting for the trucking company.

This was a truck driving company/school and after I read the entire contract I quit. I realized they were ripping people off. Yes I took the test, but they have to prove that I did, otherwise it's my word against theirs, which doesn't hold up in court. I hope I'm right.

[nascar]

I want them to provide me LEGAL validation. Sending me a bill is not validation

Whether we like it or not, Chaudhry v. Gallerizzo is controlling on this subject.

"[V]erification 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[.]"

[divemedic]

Actually, that is a misquote that the CA's want everyone to believe. Gallerizo was about whether or not a CA had to turn over attorney bills to establish legal fees. It is also an old case. There are many cases which say the oppposite, with some being less than a year old.

For example, see Fields v. Wilber Law Firm.

[nascar]

I've read Fields v. Wilber, 383 F3d 562 and others like it, but nowhere in Fields will you find a reference to USC 1692(g). That case is not addressing "proper validation".

On the other hand, the following directly addresses the 1692(g) question. If you have some on point 1692(g) cites that contradict Chaudhry and others, please clue me in on them. I'd love to have a cite that says something like "we disagree with Chaudhry..."

**************************************

Clark v. Capital Credit, 460 F.3d 1162

In Mahon v. Credit Bureau of Placer County Inc., we described one way to provide proper verification:

[T]he Credit Bureau, when it received the[verification] request, promptly contacted [the creditor's] office, verified the nature and balance of the outstanding bill, learned that monthly statements had been sent from [the creditor's] office to the[debtors] for over two years, and established that the balance was still unpaid. The Credit Bureau then promptly conveyed this information to the [debtors], along with an itemized statement of the account.

171 F.3d 1197, 1203 (9th Cir.1999). Now, the Clarks urge us to hold that Mahon sets a standard below which a debt collector's verification efforts must not fall. We decline to impose such a high threshold. Rather, we adopt as a baseline the more reasonable standard articulated by the Fourth Circuit in Chaudhry v.Gallerizzo, 174 F.3d 394 (4th Cir.1999). At the minimum, “verification of a debt involves nothing more than the debt collector confirming in writing that the amount being *1174 demanded is what the creditor is claiming is owed.” Id. at 406 (citing Azar v. Hayter, 874 F.Supp. 1314, 1317 (N.D.Fla.), aff'd, 66 F.3d 342 (11th Cir.1995)).

***************************************************

Lorenzo v. Palisades Collection, LLC

Not Reported in F.Supp.2d, 2006 WL 891170

D.N.J.,2006.

With regard to § 1692(g), the Court finds that Palisades did in fact properly verify the debt. The record shows that on November 9, 2004, Palisades sent to Lorenzo an AT & T invoice verifying the date and amount of the debt, the name of the debtor, and information sufficient to demonstrate that the debt was owed for cellular phone service.

[divemedic]

The Fields case is very applicable. The FDCPA:

“A debt collector may not use any false, deceptive, or misleading representation or means in connection with the collection of any debt.” 15 U.S.C. § 1692e. As an example of such conduct, § 1692e(2)(A) states that it is a violation to falsely represent “the character, amount, or legal status of any debt[.]” Section 1692f states that “[a] debt collector may not use unfair or unconscionable means to collect or attempt to collect any debt.”

The Fields case goes on to say:

We conclude that Fields has made allegations sufficient to state a claim under § 1692e and § 1692f and a dismissal pursuant to Federal Rule of Civil Procedure 12((6) was inappropriate because the letters could conceivably mislead an unsophisticated consumer. <snip>In the original dunning letter, Wilber listed an account balance that exceeded the principal obligation by $266.48. Wilber’s fees were more than double the original obligation, $122.06. Nowhere did Wilber explain that it was seeking attorneys’ fees of $250. <snip> It is unfair to consumers under the FDCPA to hide the true character of the debt, thereby impairing their ability to knowledgeably assess the validity of the debt. One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt.

So you see that even though the case does not directly address WHAT constittues validation, the court held that a dunning letter which is incomplete violates the FDCPA, in that it is deceptive and misleading to the least sophisticated consumer, and is therefore a violation of the act.

[LNY]

So in the case of the OP, the CA has verified that the OP agreed to pay for a service, but provided no proof that said service was actually performed. Wouldn't proper validation include both? This is like providing a copy of your signed credit application, but no statements or signed slips showing you ran up the charges being demanded of you.

[E. Normis Debtor]

I don't think Field's applies because there was a misrepresentation of the amount, which most rulings have held violates.

Since the discussion involves a medical debt, I would think Zaborac v. MHS may be appropriate:

DANIEL L. ZABORAC, Plaintiff, vs. MUTUAL HOSPITAL SERVICE, INC., Defendant. 1:03-cv-1199-LJM-WTL UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF INDIANA, INDIANAPOLIS DIVISION 2004 U.S. Dist. LEXIS 22816 October 7, 2004, Decided

A. FDCPA VIOLATION

The FDCPA prohibits a debt collector from communicating with the consumer, Zaborac in this case, once the collector knows the consumer is represented by an attorney. 15 U.S.C. § 1692c(a)(2). If a consumer disputes a debt, the debt collector must provide verification of the debt. Id. § 1692g(. Thus, once Zaborac's attorney requested verification of the debt, MHS had two choices; it could provide verification to Zaborac's attorney, or it could cease its attempts to collect. See Jang v. A.M. Miller & Assoc., 122 F.3d 480, 483 (7th Cir. 1997). [*5] MHS argues that it had no choice but to send the August 4, 2003, verification letter directly to Zaborac because his attorney would not provide a HIPAA authorization. However, MHS could have provided Zaborac's attorney with debt verification without violating HIPAA, and thus MHS's conduct in communicating directly with Zaborac instead of his attorney violated the FDCPA.

In general, HIPAA prevents the release of health information to someone other than the patient, without the patient's authorization. 45 C.F.R. § 164.508(a)(1). However, HIPAA allows a collection agency to disclose protected health information as necessary to obtain payment for health care services. See 45 C.F.R. § 164.506©. Obtaining payment under HIPAA includes debt collection activities. Id. § 164.501. Thus, MHS was entitled to disclose Zaborac's health information to his attorney as necessary to collect the debt.

However, a debt collector should disclose only the minimum information necessary. See id. § 164.502( ("When using or disclosing protected health information . . . a covered entity must make reasonable efforts to limit protected health information to the minimum necessary to accomplish [*6] the intended purpose of the use, disclosure, or request."). The Fourth Circuit Court of Appeals' opinion in Chaudhry v. Gallerizzo is instructive. In that case, involving debt for attorneys' fees, the court explained that debt verification requires only a written confirmation that the debt collector is demanding what the creditor claims is owed. Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999). Details of the alleged debt are not required. See id. "Verification is only intended to 'eliminate the . . . problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid.'" Id. quoting S. Rep. No. 95-382, at 4 (1977). In Chaudhry, this meant that the debt collector need not provide attorney bills that contained information protected by the attorney-client privilege or the attorney work product privilege. Id. As the court explained, when a debt collector has an obligation to protect privileged and confidential information, a debtor cannot prevent collection of the debt by demanding release of that information. Id.

The FDCPA did not require MHS to forward a copy of Zaborac's medical bills [*7] or any other detailed evidence of the alleged debt. See id. at 406. A written confirmation that MHS was demanding what the creditor claimed was owed would have been sufficient. See id. Because the confirmation was made for debt collection purposes, MHS could have sent the verification, containing the "minimum necessary information" directly to Zaborac's attorney without violating HIPAA. See 45 C.F.R. §§ 164.501, 164.502(, 164.506©. It's failure to do so was a violation of the FDCPA.

[pilgrimfaraway]

I can see threatening to sue, but actually going to court? In the legal proceedings, you will need to either claim that you didn't take the test or admit that you did. The only way you can accomplish anything in court is to have a compelling case that the information on your file is not accurate. You will have to discuss the accuracy of the tradeline in your complaint. If you don't, it will be dismissed. I guess you can say that you have no memory of taking the test, but that would be perjury.

[divemedic]

Wrong. The FDCPA is not about the underlying debt, but about the CA's actions in attempting to collect it. If they cannot prove what they are reporting, they must delete.