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LVNV repsonse to SC Dept. of Consumer Affairs


LUEser
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For your dissection and reading pleasure. Here was my original dispute.

Resurgent Capital Services, a wholly owned subsidiary of Sherman Financial Group, LLC, services accounts for LVNV Funding, LLC. Resurgent alleges that the account was bought from Credit One Bank, N.A. in Las Vegas Nevada by LVNV Funding.Credit One Bank, N.A. sent me a letter stating that all rights has been sold to Resurgent Capital Services. Both of the above statements can't be true at the same time. I believe that LVNV/Resurgent are one in the same company and LVNV is merely a "shell" company used by the Sherman Group to skirt the FDCPA and allow LVNV immunity from the statutes that regulate the debt collection industry. Such practices obviously confuse the least sophisticated consumer that the FDCPA is specifically existing to protect.I criticize their corporate structure as deceptive, and their trade practices questionable.

You said yes to having supporting documentation

In your opinion you said fair compensation would be:

1.) Have Resurgent/LVNV disclose who originally bought the account from Credit One Bank, and who the current owner is, and how they came to be the current owner, with documentation.2.) Have LVNV/Resurgent disclose whether they are one in the same or if they are under corporate control (i.e. one is not under the Sherman umbrella of corporations)

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And their response: Warning it's a long one

This letter is in response to your correspondence dated XX XX regarding the referenced consumer. LVNV Funding ("LVNV") purchased this account from MHC Receivables, LLC ("MHC") on XX XX. Resurgent Capital Services L.P. ("Resurgent") manages accounts owned by LVNV. Additional information has been outlined below for your review:

1.) MHC advised that this account originated with Credit One Bank N.A. on XXXX

2.) This account was charged off on XXXX with a balance of XXXX

3.) The last payment in the amount of XX, was received by MHC on XX.

Verification of debt with validation was mailed to LUEser on XXXX in compliance with the Fair Debt Collection Practices Act ("FDCPA"). It appears there is a misunderstanding as to our obligations under the FDCPA to validate a debt. The FDCPA provides that if a consumer disputes a debt, he/she has the right to request validation of the debt within thirty days of his receipt of the first collection letter.

Specifically it states:

If the consumer notifies the debt collector in writing within the thirty-day period described in subjection [sic] (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of the judgment, or name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to hte consumer by the debt collector. 15. U.S.C. § 1692g(B).

Continued in next post.

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Cont.

The FDCPA does not define the term "validation," but the term has been interpreted by the Federal Trade Commission ("FTC") and the courts. The FTC stated that validation "is intended to assist the consumer when a debt collector inadvertently contacts the wrong consumer at the start of his collection efforts." FTC Staff Commentary on the FDCPA, 53 Fed. Re. 50097, 50108-09 (Dec. 13, 1998).

[V]erification of the debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. See Azar v. Hayter, 847 F. Supp. 1341 (N.D. Fla. 1995), aff'd 66 F.3d 342 (11th Cir. 1995), cert denied, 516 U.S. 1048 (1996). Consistent with the legislative history, 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." S. Rep. No. 95-384 at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. There is no concomitant obgligation to forward copies of bills or other detailed evidence of the debt.

Chanudry v. Gallerizo, 174 F. 3d 394, 406 (4th Cir. 1999), cert. denied, 528 U.S. 891 (1999). Verification of the debt requires more than simply resending the same collection letter that prompted the consumer to dispute the debt. The debt collector should verify that the amount demanded is what the creditor claims is owed.

In the present case, we have contacted the original creditor and verified that the amount demanded on this account is the amount that the creditor claims is owed. If LUEser believes this account is fraudulent, we will need a copy of a complete police report/incident report regarding hte fraud, or a notarized fraud or identity theft affidavit (blank forms are available at the FTC's website: www.ftc.gov). If this account was paid in full, we will need a copy of the settlement offer, cancelled check(s), and/or confirmation of payment in full. Additionally, if LUeser has any correspondence to/from MHC or Credit One Bank regarding this dispute it should be forwarded with the requested documentation to:

Address

If we do not receive additional information from you or LUEser within 45 days from the date of this letter was received, then we will assume the dispute is resolved. If you have any additional questions or concerns, please contact customer service at XXXX

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Well, they skirted your question. I saw nothing in your question about verification of debts. Seems they used the standard response they've kicked out to everyone including attorney generals. Now you have to respond and specify in detail what is wrong, credit reporting incorrect, etc. Its no use fighting the "what is validation" question. Pin them down with what they have actually done to you that is an absolute in terms of state and federal law.

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My response, though I don't expect it to do much.

I appreciate fully your cooperation in this matter. I feel shortchanged by the form letter response Resurgent Capital Services has provided. As my initial request indicated, my problem was not regarding validation of the debt; it was concerning the deceptive business structure by which the Sherman family of companies operates. While I understand that business are entitled to operate in whatever way this wish and to structure themselves as such also, they are required to do so within the bounds of the law and within the bounds of reasonableness. The problem I have particularly is that LVNV Funding is showing up on my credit report as a creditor, not as a debt collector. According to the letter from Ms. Holbcombe, LVNV purchased the debt from MHC. However, my documentation from Credit One Bank. N.A. shows differently.

Credit One Bank writes: “Please be advised that the ownership of this account has been transferred to Resurgent Capital Services.”( Please see insert A for a copy of the correspondence.)

The qualm I have here is that pursuant to section 623(a) of the Fair Credit Reporting Act (15 U.S.C. 1681 et seq., “FCRA”), a consumer is guaranteed the right to dispute directly with the data furnisher. Specifically 15 U.S.C. 1681s-2a(8)(D) which reads:

Submitting a notice of dispute- A consumer who seeks to dispute the accuracy of information shall provide a dispute notice directly to such person at the address specified by the person for such notices that—

i) identifies the specific information being disputed

ii) explains the basis of the dispute; and

iii) includes all supporting documentation required by the furnisher to substantiate the basis of the dispute.

Please be advised that I have already disputed with the three major credit reporting bureaus. Transunion and Experian deleted the tradeline as they were unable to verify the information. However Equifax, has verified the information as correct. How they were able to do this is beyond me. Perhaps it was a problem with Equifax, perhaps not. Regardless, the information is inaccurate. Likewise, I sent three separate letters to Resurgent Capital Services’ address (the same address given to contact LVNV Funding, LLC on the all three credit reports) on September XX, XX, and XX. They have yet to respond.

continued...

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My qualm is simple. LVNV Funding, or perhaps Resurgent who is reporting on their behalf, if they are in fact two different companies, is reporting the account as a factoring company account. Clearly, it is not. The account is a collection account if anything at all. For support I offer the Pratt-LeFerve FTC Opinion letter (http://www.ftc.gov/os/statutes/fdcpa/letters/pratt.htm) which states:

We [The FTC] consider the purchase of a defaulted account “…an assignment of transfer of debt in default solely for the purpose of facilitating collection of such debt for another.” See Sec 803(4).

Hence, if they’re defined as a debt collector under the FDCPA, they should similarly be bound to report as one under the FCRA.

I now turn my attention to the FDCPA, which Ms. Holcombe has be so quick to point out my alleged misunderstanding. While I never requested FDCPA disclosures in my first dispute, I take the time now to inform her for the sake of Resurgent/LVNV the can of worms she has opened.

She cites Chaudhry v. Gallerizzo, a 4th circuit federal case of 1999. What she fails to cite are the requirements also shown. I contend that such a defense is nullified on three points.

a
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First, the Chaudhrey court ruling was in regards to attorney fees, not principle and interest amounts of the debt over which the suit was filed. For that we seek out Spears v. Brennan (2nd Cir. 2001). In the fourth point of contention, “Failure to Cease Debt Collection,” the court finds that Brennan acted in violation of the act for first overshadowing the 30 day validation period by filing suit 21 days after Spears requested validation. They also find his method of verification lacking. I call your attention to the latter. The letter sent to me from Resurgent Capital Services is far from the verification standard of either Chaudhry or Spears.

For Chaudhrey, the validation sent was copies of the original records of the original creditor. LVNV Funding, whether a legitimate owner of the account now or not, has never been an original creditor, to this I believe both parties can agree. Moreover, the Chaudhrey case was one regarding a debt between the creditor, the creditor’s servicer, a third party debt collection law firm, and the debtor. In the case of LVNV and myself, the issue is three or four times removed from that. Even if LVNV, the acting creditor, was able to produce documentation from it’s own letterhead, it would be considered insufficient on its face as LVNV was never the original custodian of the records. If anyone was, it was Credit One Bank. Not MHC, not resurgent, not LVNV, and certainly not any of the third party debt collectors with whom LVNV has contracted to attempt to collect this debt. But I digress, more on that shortly.

In the case of Spears, the court ruled that a contract itself, even with the identifiable information such as the terms of the loan and the initial principle amount, did not validate the debt. “The contract in no way provides sufficient verification of the debt.” The contract merely proved the existence of a debt; it failed to show consideration paid, date of default, or the interest that had accrued on the principle balance. The letter I’ve received from Resurgent shows only the alleged last payment made, the claimed date of default from a third party receivables firm (MHC), and compounded balance with no break down of the principle, fees, interest, or other charges. And all of this is so audaciously claimed on self produced records from Resurgent (See attached “B”). Not one reference to Credit One’s records has ever been shown. In any competent court, such claims would easily be thrown out as hearsay.

Allow me to humor Resurgent for a moment, and we’ll pretend to agree that LVNV is actually the creditor. The validation still falls on its face as the records were self produced. The statute in plain language calls for (quoting from 1692g(B)):

If the consumer notifies the debt collector in writing […] that the debt or any portion thereof is disputed, OR [emphasis mine] that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, OR the name and address of the original creditor, is mailed to the consumer by the debt collector.

Let us pause for a moment and look at the parallel construction put in place by congress in the drafting of this section of the Act. By adding the last segment “is mailed to the consumer by the debt collector,” implies that such verification be obtained. In order to fully satisfy congressional intent, would not such obtaining have to be something not self produced, would it not have to be something produced by the original creditor and thus forwarded to the consumer. Surely Resurgent doesn’t attempt to belittle congress by thinking that the obtaining of such verification be done by word of mouth. If such an absurd postulation were the case, I could write with that same logic that Resurgent owes me one million dollars, fabricate a date of last payment, and a loan originator, then claim I verified with them that the above mentioned was true. I reiterate, surely that was not congressional intent.

All legal theory aside, let us finally return to the matter at hand. That can of worms, again. If Resurgent claims compliance with the FDCPA, they must comply with all, not just part of the FDCPA. The aforementioned quote, the one also quoted by Ms. Holcombe, requires that the debt collector CEASE collection of a dispute debt. If it pleases your office, could you also have Ms. Holcomb explain why Resurgent did not. A request for validation was sent on the 12th of August, 2008 (See Attached “B”). Twice since then was the account subcontracted on LVNV Funding’s behalf (See Attached “C” and “D”). Please, humor me in showing how such activity is not blatant disregard for 15 U.S.C. 1692g(B).

Again, I don't expect much from this, but I had a good laugh writing it.

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If the other two CRAs deleted the tradeline, your poblem may be with Equifax. I had a very similar situation with a trade line on my reports. Upon dispute EX & TU deleted the entry. EQ verified twice.

I figured that I was stuck with it. Knowing it wouldn't get me anywhere, I sent a letter to EQ pointing out that EX & TU deleted the tradeline. I further wrote that since they deleted and EQ didn't, I am curious how they verified the info and requested their method of validation.

The same day they signed for my letter my report was noted "Reinvestigation in progress" even though I didn't request that. Within 1 week the trade line was deleted.

This may be something you wish to try. It certainly can't hurt. Let us know how you make out.

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