pilgrimfaraway

A couple questions recently arose in Debt Validation threads:

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1. Does the Chaudhry mean that the only validation required of CA's is a simple letter stating that they confirmed the amount of the debt with the OC?

2. In Ditty v. Checkrite, Ltd., Inc., 973 F.Supp. 1320 (Utah, 1997), you find:

Section 1692g requires a debt collector to inform a debtor of his or her right to dispute the validity of a debt. 15 U.S.C. § 1692g(a). This notice must be provided in the debt collector's initial communication with the debtor, or within five days following the initial communication, and must notify the debtor of the amount of the debt, the creditor to whom the debt is owed, and that unless the validity of the debt is disputed in writing within thirty days, the debt collector will assume that the debt is valid. Id. The validation language may not be contradicted or overshadowed by the remainder of the letter containing the validation notice or by language in future communications. Robinson v. Transworld Systems, Inc., 876 F.Supp. 385, 391 (N.D.N.Y.1995) (internal citations omitted). CheckRite included the required validation notice in its first letter to plaintiffs. Likewise, the letter sent by DeLoney & Associates contained a validation notice. Both validation notices provided the information required by the Act; however, the collection letter sent by DeLoney & Associates also stated that "[n]otwithstanding your right to dispute the validity of the debt within this thirty (30) day period, we may not delay in instituting a collection lawsuit, except as otherwise required by the Fair Debt Collection Act." Plaintiffs contend that this additional language violated § 1692g because, according to plaintiffs, that provision prohibits all collection efforts until the thirty-day validation period has passed. Defendants argue that § 1692g simply requires that any ongoing collection efforts cease once a debtor disputes a debt within the thirty-day period. The court agrees with defendants.

Section 1692g contains no express requirement that collection efforts be delayed until the thirty-day period has passed. Instead, the statute states that if the debtor disputes a debt, "the debt collector shall cease collection of the debt." 15 U.S.C. § 1692g(B) (emphasis added)

Am I smoking crack or does that mean that the CA is only required to stop the collection activyt currently in process until validation is complete, but is able to proceed with any and all new collection efforts immediately following receipt of the DV?

I have a legal mind of your average California fruit fly, so I need to get slapped into line here.

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1. Does the Chaudhry mean that the only validation required of CA's is a simple letter stating that they confirmed the amount of the debt with the OC?

Depends. But that's usually all you'll get. Maybe a print out of your last statement from the OC which should give you an idea of whether or not it's your debt.

Am I smoking crack or does that mean that the CA is only required to stop the collection activyt currently in process until validation is complete, but is able to proceed with any and all new collection efforts immediately following receipt of the DV?

That's what it means. Though in your district, if you get a particular judge, you can make case that they are required to provide verification even if they cease collection efforts.

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2. In Ditty v. Checkrite, Ltd., Inc., 973 F.Supp. 1320 (Utah, 1997), you find:

Section 1692g requires a debt collector to inform a debtor of his or her right to dispute the validity of a debt. 15 U.S.C. § 1692g(a). This notice must be provided in the debt collector's initial communication with the debtor, or within five days following the initial communication, and must notify the debtor of the amount of the debt, the creditor to whom the debt is owed, and that unless the validity of the debt is disputed in writing within thirty days, the debt collector will assume that the debt is valid. Id. The validation language may not be contradicted or overshadowed by the remainder of the letter containing the validation notice or by language in future communications. Robinson v. Transworld Systems, Inc., 876 F.Supp. 385, 391 (N.D.N.Y.1995) (internal citations omitted). CheckRite included the required validation notice in its first letter to plaintiffs. Likewise, the letter sent by DeLoney & Associates contained a validation notice. Both validation notices provided the information required by the Act; however, the collection letter sent by DeLoney & Associates also stated that "[n]otwithstanding your right to dispute the validity of the debt within this thirty (30) day period, we may not delay in instituting a collection lawsuit, except as otherwise required by the Fair Debt Collection Act." Plaintiffs contend that this additional language violated § 1692g because, according to plaintiffs, that provision prohibits all collection efforts until the thirty-day validation period has passed. Defendants argue that § 1692g simply requires that any ongoing collection efforts cease once a debtor disputes a debt within the thirty-day period. The court agrees with defendants.

Section 1692g contains no express requirement that collection efforts be delayed until the thirty-day period has passed. Instead, the statute states that if the debtor disputes a debt, "the debt collector shall cease collection of the debt." 15 U.S.C. § 1692g(B) (emphasis added)

Am I smoking crack or does that mean that the CA is only required to stop the collection activyt currently in process until validation is complete, but is able to proceed with any and all new collection efforts immediately following receipt of the DV?

That's what it means. Though in your district, if you get a particular judge, you can make case that they are required to provide verification even if they cease collection efforts.

um no..... they must cease all collection activity upon receipt of DV until they provide validation to the consumer. not simply stop what they already did and start a new round of phone calls or letters instead.

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um no..... they must cease all collection activity upon receipt of DV until they provide validation to the consumer. not simply stop what they already did and start a new round of phone calls or letters instead.

I took his statement to mean new collection efforts on another account, not the same one. You're correct, they would need to cease all collection efforts until they provide verification on the account in question, but that would not bar them from beginning collection on a new account.

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That's what I understood as well, but the judge in this case didn't seem to agree with that????

That would have the effect of making the FDCPA completely worthless. Think about it- you send DV, so they stop current collection efforts, and claim that subsequent dunning letters are not part of the (now) ceased collection effort, but part of an all new effort, begun AFTER the DV?

How stupid would that be?

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1) Look at Guerrero v RJM which cites Chaudhry. The judge gives a good test of how to provide verification (dates, amounts, basis, interest). Also look at the statute. The verification must come from the creditor, copied and mailed to the consumer by the CA. If the OC mails it directly, it is not verification. If it's faxed, it's not verification. If it didn't come from the OC, it's not verification. I believe Stonehart v Rosenthal even says the verification from the OC to the CA must be in written form, so it's not like the CA can just call the OC and ask a couple questions and write it down. The verification must be prepared by the OC and sent to the CA, the CA cannot prepare the verification IMO.

2) The 30 day period was NEVER a grace period. They can send a validation notice and attempt to collect on the debt. If you dispute within the 30 days, their collection efforts must cease. The FDCPA has been amended to clarify that the 30 day period is NOT a grace period. The only thing that can stop the collection activity is a written dispute.

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" the information contained in the letter would not have sufficed to verify the debt. The only information disclosed in the letter was the date that the account was opened, the date that the last payment was posted, the name and social security number listed on the account, and the current balance. The letter did not indicate the amount or basis of the charges underlying the current balance, nor did it indicate the dates on which such charges were incurred." GUERRERO v. RJM ACQUISITIONS, (DC Hawaii, 2004)

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Defendants argue that § 1692g simply requires that any ongoing collection efforts cease once a debtor disputes a debt within the thirty-day period. The court agrees with defendants.

Section 1692g contains no express requirement that collection efforts be delayed until the thirty-day period has passed. Instead, the statute states that if the debtor disputes a debt, "the debt collector shall cease collection of the debt." 15 U.S.C. § 1692g(B) (emphasis added)

Some courts have held that the 30 days is a grace period in which NO collection activity can occur (and the court is addressing that point), but those courts are in the minority. The second para quoted above basically says there's no grace period for collection, but if the debt is disputed within the thirty days, then collection efforts must cease until validation is obtained.

Clearer?

The FDCPA has now been amended to say that the 30-day period is not a grace period, but that doesn't go into effect until December.

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" the information contained in the letter would not have sufficed to verify the debt. The only information disclosed in the letter was the date that the account was opened, the date that the last payment was posted, the name and social security number listed on the account, and the current balance. The letter did not indicate the amount or basis of the charges underlying the current balance, nor did it indicate the dates on which such charges were incurred." GUERRERO v. RJM ACQUISITIONS, (DC Hawaii, 2004)

Emphasized for... well emphasis. Guerrero is one of two or three cases I can think of that cites Chaudhry and does the best job of breaking it down so even a 5 year old can understand it.

A lump sum balance will not cut it.

Amount or basis of the charges underlying the current balance.

Date on which such charges were incurred.

Dive left out the sentence about whether interest is factored into the balance and at what rate.

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