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jakescreek

Chaudhry v. Gallerizzo - Case Explained

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I found this on the web, thought it might be timely since these CAs are getting more crafty:

So... you've requested validation of a debt and the Collector has only sent you a screenshot of your name and some unrecogized amount due?

And they say that's good enough, because Chaudhry v. Gallerizzo says so?

Is that what's troubling you, Bucky?

It really was a "nothing" of a case- an appeal over a billing dispute heard in the 4th US district court of Appeals.

The amount of the debt itself was never in question in the Chaudhry case, the dispute was over additional charges for Attorney fees.

The case decided that an Itemization of Attorney's fees was confidential, protected by Attorney-Client privilege, therefore in this case- not available to the debtor.

Verification of a debt involves nothing more than the debt collector confirming in writing that the debt being demanded is what the creditor is claiming is owed. The debt collector is not required to keep or provide detailed evidence of the alleged debt.

That's the snippet you'll find quoted to you by debt collectors.

On it's face, it appears clear-cut. In context, it isn't applicable to everyday debt collection.

Interestingly, it does appear to require that the information come directly from the Creditor:

the debt being demanded is what the creditor is claiming is owed.

Therefore, unless the documentation the CA provides has clearly originated with the original creditor, the Collector hasn't complied with their own supposed standard.

Controlling Argument.

Not a lesson from the Collector's Handbook, but a legal concept regarding applicability of case law. Chaudhry was decided in the 4th District Court of Appeals and holds no real weight outside of that district. Outside the 4'th, it is only useful as a Persuasive argument- meaning it can be introduced, but carries no absolute weight of precedent.

In fact, introducing it outside of the 4th may be a bad idea entirely as judges can and do resent being told that they are expected to decide exactly as another judge (not their superiors- that is different!) have decided.

Unless your case is exactly identical to Chaudhry- expect introducing the Chaudhry case to do nothing other than raise the judge's blood pressure.

That's a good thing as it essentially precludes a CA from using Chaudhry to defend their lack of documentation validating a debt.

Oh yeah? well..Take that then...

Should the judge allow Chaudhry, you can produce your copy of Spears V. Brennan, which aside from being newer, directly contradicts Chaudhry:

specifically, Brennan claims that a copy of the consumer credit contract between Spears and American General attached to the notice of claim provided sufficient verification of the debt within the meaning of 15 U.S.C. § 1692g(B).

We cannot agree.

The contract in no way provides sufficient verification of the debt. A review of the document reveals that it identifies only the terms of Spears’ loan, including a 17.99% annual interest rate and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments.

Now we're reduced to a foreign decision standoff, with Chaudhry saying one thing, and Spears saying quite another.

Result?

Neither one trumps the other. The judge is going to decide based on other factors- and is probably slightly annoyed with the Collector for even bringing the Chaudhry case up.

The Federal Trade Comission, the federal agency charged with maintainting and interpreting the FDCPA, has in past years issued opinion letters further clarifying the subject of debt validation. While these also carry no authoritative legal status, they may be useful as an additional persuasive argument for more thorough documentation.

Because I said so, that's why.

With Chaudhry out of the way, what then is sufficient validation?

It's a fair assumption that the end of the line for debt collection is the courtroom.

Because I said so (which includes affidavits of debt, a subject of an upcoming article) just doesn't cut it.

The legal standard is "reasonable".

Do the documents provided clearly and without doubt establish you as the debtor?

Do they clearly show payments and charges leading up to the claimed amount?

Does the collector have legal authority to accept payment on behalf of the original creditor?

Are the documents believable? Provided by the OC, not created by the third-party collector?

If a "reasonable" person -be it a judge, juror or mediator can answer "yes" to those questions based on the documents provided- you will likely be the proud owner of a new, shiny judgement!

If not.... perhaps Mr. Chaudhry has some explaining to do

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