Communicating that a debt is disputed.

[Downto0]

If a JDB buys a debt from an OC, duns the debtor, and the debtor disputes the debt; isn't the JDB required, under the FDCPA, to communicate to the OC that the debt is disputed along with listing their own tl as disputed?

[willingtocope]

If the OC's TL says "sold to another lender" and their balance is $0, they've essentially given up title to the debt....so, no.

JDB's seldom contact you directly...usually there is a CA in the middle who dunns you. You DV the CA...then they, and the JDB mark their TL's "in dispute".

[BV80]

Why would a JDB have to contact an entity who no longer has anything to do with that account? The JDB's not working for the OC.

[Downto0]

CRA's still take into account any tl that is listed unless it is listed as disputed when they make the fico score. Both the JDB's tl and the OC's tl are the same except that the OC's tl is listed as sold with a zero balance.

So, if one tl is disputed then the other is disputed. Both should not be considered when making the fico score but I don't think the CRA's go so far as to correlate the two and consider both tl's disputed when only the JDB's tl is disputed.

The FDCPA is silent as to how far the collector must communicate that a tl is disputed. However, if only the collector's tl were to be listed as disputed then the FDCPA probably would have something like, "failure to communicate that their tl is disputed", instead of "failure to communicate that a disputed debt is disputed.

This violation comes under "False and Misleading Representations". It would be both false and misleading if the OC's tl was not listed as disputed and the JDB's tl was listed as disputed when both tl's are essentially the same.

The connection between the OC and JDB is not lost because the JDB now owns the debt. The JDB still must communicate with the OC under certain conditions. Take validation, for example. The JDB must send to the OC for validation. The JDB cannot just reach into their file and bring out a last statement they bought with the debt.

[Coltfan1972]

You would have to dispute with the OC. The JDB does not have to go back to the OC but they must list it as disputed on their end. The OC is out of it. The OC should have a zero balance so unless you were going to dispute the account in general, don't see a lot to dispute.

However, if it helps your FICO, not sure it does or does not, to show disputed then disptue, but JDB does not have to go to the OC since there was a sale of the account.

[BV80]

The FDCPA is silent as to how far the collector must communicate that a tl is disputed. However, if only the collector's tl were to be listed as disputed then the FDCPA probably would have something like, "failure to communicate that their tl is disputed", instead of "failure to communicate that a disputed debt is disputed.

You're not disputing the OC's TL. You're disputing the JDB's TL. Again, unlike a CA, the JDB is not collecting for the OC.

This violation comes under "False and Misleading Representations". It would be both false and misleading if the OC's tl was not listed as disputed and the JDB's tl was listed as disputed when both tl's are essentially the same.

Even if the JDB DID tell the OC the account was disputed, how can the JDB force the OC to report it as disputed? The OC is under no obligation to do so. The OC would only have that obligation if the dispute came from the CRAs or directly from you.

Your current dispute is not with the OC. It's with the JDB. The JDB is not collecting for the OC. A JDB can report a different amount than the OC. They can report a different "date opened". They may be the same account, but they're 2 different TLs from 2 different and separate entities.

The connection between the OC and JDB is not lost because the JDB now owns the debt. The JDB still must communicate with the OC under certain conditions. Take validation, for example. The JDB must send to the OC for validation. The JDB cannot just reach into their file and bring out a last statement they bought with the debt.

Actually, the JDB CAN present the last the statement they bought with the debt. That statement came from the OC. It shows the name of original creditor and the amount of the debt. That's all that's required for validation.

If you have case law that says a JDB must report to the OC that the debt is disputed or that a JDB can't present a purchased cc statement as validation, please cite it. I'd gladly admit I'm wrong, because the information would be helpful and beneficial to everyone.

Edited April 13, 2012 by BV80

[Downto0]

The FDCPA plainly and clearly states:

(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed.

If a JDB has already listed a tl for the debt they bought from the OC they cannot get out of listing that tl as disputed. They can't get out of it by not updating. They still have to update one more time to show that the tl is disputed. They could probably delete the tl and be in compliance

But that is not the end of it. If the Congress only wanted the JDB to list their own account as disputed then Congress would have said that. Instead, Congress said that the debt collector would communicate that a debt is disputed. This does not limit the dispute to the JDB's own tl.

The JDB cannot, themselves, list the OC's tl as disputed so they have to communicate to the OC that the OC's tl is disputed. Whether the OC then lists their tl as disputed is up to the OC but the JDB has fulfilled their obligation to the FDCPA. However, the OC is then on the hook if they don't update their tl as disputed because they have violated the FCRA as all tl's are required to be accurate and complete.

Why would Congress say that a debt collector must "communicate" that a debt is disputed if the debt collector only needed to update their own tl? Because Congress did not want to limit the reporting of the dispute to just the JDB's tl.

I do have case law where debt collectors are required to communicate to the next buyer of the debt that the debt is disputed. This establishes that Congress did not limit the communication to the JDB's own tl.

I think this works both ways...the JDB has to inform any buyer of the debt that it is disputed and the JDB has to inform the OC that the debt is disputed. The JDB has to communicate to whomever has a tl concerning the debt back to the OC.

Edited April 13, 2012 by Downto0

[Downto0]

BV80 you posted just a little before I made my reply to the other posts. I think I answered some of your questions but not all.

You're not disputing the OC's TL.

Commonly the JDB tells you who the OC is and what the debt is about. I would be disputing the whole debt which would include the OC and the JDB. A lot of the time both have a tl concerning the same debt. One is the owner of the debt and the other is the originator of the debt. The JDB may jack up the amount owed but it's still the same debt.

They may be the same account, but they're 2 different TLs from 2 different and separate entities.

Still the same debt. A rose by any other name is still a rose.

Actually, the JDB CAN present the last the statement they bought with the debt. That statement came from the OC. It shows the name of original creditor and the amount of the debt. That's all that's required for validation.

No, this is just plain wrong. They can present the last statement but they must have sent to the OC for that statement after a request from the debtor. You and I already had this debate concerning the Chaudhry case where the debt collector did send to the OC for validation. However, I don't want to mix issues.

[BV80]

But that is not the end of it. If the Congress only wanted the JDB to list their own account as disputed then Congress would have said that. Instead, Congress said that the debt collector would communicate that a debt is disputed. This does not limit the dispute to the JDB's own tl.

Again, show me the case law in which a court ruled the JDB has to report back to an entity who no longer owns the account.

However, the OC is then on the hook if they don't update their tl as disputed because they have violated the FCRA as all tl's are required to be accurate and complete.

Where in the FCRA does it state that a creditor must respond to a dispute from anyone other than the CRAs or the consumer? A JDB is neither a CRA or the consumer. Therefore, the OC would not be in violation of the FCRA.

Why would Congress say that a debt collector must "communicate" that a debt is disputed if the debt collector only needed to update their own tl? Because Congress did not want to limit the reporting of the dispute to just the JDB's tl.

Where did you get this? What statute or case law states that specific intent in reference to JDBs and OCs?

I do have case law where debt collectors are required to communicate to the next buyer of the debt that the debt is disputed. This establishes that Congress did not limit the communication to the JDB's own tl.

They ruled that debt are required to communicate to the NEXT buyer. That doesn't prove the JDB has to go backward and communicate the dispute to an original creditor who no longer owns the debt and with whom the debt was never disputed in the first place.

[Downto0]

You should understand that if I had case law to prove my theory I would not be asking questions and there would be no theory.

I can ask you the same question. What case law do you have to prove that the JDB does not need to communicate to the OC that the OC's debt is disputed? But, I know that you don't have case law supporting your theory either otherwise you would post it.

What it boils down to is that you disagree with my theory. You can't prove that my theory is wrong. I can't prove that my theory is correct.

You're argument does not convince me that my theory has no merit. The simple fact is that Congress wanted the JDB to communicate that the debt they were trying to collect was disputed. It would not make any sense to list only one tl as disputed when their are two tl's for the same debt. If one is disputed then so is the other.

Where in the FCRA does it state that a creditor must respond to a dispute from anyone other than the CRAs or the consumer?

This one I have:

§ 623(a)

(2) Duty to correct and update information. A person who

( has furnished to a consumer reporting agency information that the person determines is not complete or accurate, shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency anyof the information that remains not complete or accurate.

So, if a JDB tells the OC that the debt is disputed then the OC has to report to the CRA's that the debt is disputed otherwise the tl is not complete or accurate.

[BV80]

You should understand that if I had case law to prove my theory I would not be asking questions and there would be no theory.

You asked questions, but you obviously don't want anyone to disagree with you. A theory is going to be debated.

I can ask you the same question. What case law do you have to prove that the JDB does not need to communicate to the OC that the OC's debt is disputed? But, I know that you don't have case law supporting your theory either otherwise you would post it.

Of course I don't have case law. It's either never been tried in court, or if it has, the case wasn't published. I can't prove a negative.

This one I have:

§ 623(a)

(2) Duty to correct and update information. A person who

( has furnished to a consumer reporting agency information that the person determines is not complete or accurate, shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency anyof the information that remains not complete or accurate.

So, if a JDB tells the OC that the debt is disputed then the OC has to report to the CRA's that the debt is disputed otherwise the tl is not complete or accurate.

Section 623(a) begins with "(a) Duty of Furnishers of Information to Provide Accurate Information."

In your first post, you stated nothing about inaccuracies. Your question was about a dunning letter and disputing the debt. The above section refers to inaccuracies in the TL. Disputing a debt under the FDCPA in response to a dunning letter does not necessarily mean there's an inaccuracy in the JDB's TL. In addition, if there is an inaccuracy in a JDB's TL, it doesn't mean the same inaccuracy is in the OC's TL.

[Downto0]

Counter arguments for any theory help decide its viability in court. It's better to have one's argument defeated in a forum rather than testing it in court. You bring up some valid points but none that refute my theory. We'er just two posters tossing something around that, if established, could be very helpful to the lot of us.

A debt which has been disputed and not listed as disputed is not accurate and complete. With the plain reading of the FCRA, it would not matter if the OC, or any other df, thinks that the dispute is frivolous. If a df thought the dispute was frivolous then they could say that to the CRA, consumer, or a court but they would still have to list the tl as disputed or be in violation of the FCRA, and the FDCPA if they are a collector.

A JDB's account and a OC's account are the same debt. They will tell you that in their initial contact. Assessing add-on charges doesn't change the fact that the OC created the debt. Unless one is specifically disputing the add-on charges then a dispute to the JDB's account is a dispute to the OC's account.

This is why I think Congress used the term "communicate" instead of telling the collector to list their own tl as disputed. The word "communicate" tells the collector to tell everyone who played a part in making the debt that the debt is disputed.

[BV80]

Counter arguments for any theory help decide its viability in court. It's better to have one's argument defeated in a forum rather than testing it in court. You bring up some valid points but none that refute my theory.

I agree 100%. Debating in this forum also helps prepare for possible counterarguments that one might face in a lawsuit.

A debt which has been disputed and not listed as disputed is not accurate and complete. With the plain reading of the FCRA, it would not matter if the OC, or any other df, thinks that the dispute is frivolous. If a df thought the dispute was frivolous then they could say that to the CRA, consumer, or a court but they would still have to list the tl as disputed or be in violation of the FCRA, and the FDCPA if they are a collector.

This is not about whether a df believes a dispute is frivolous or not. It's about proper procedure as required by the FCRA.

You said "with the plain reading of the FCRA". § 611 specifically states the a CRA must notify a df if the CRA receives notice of a dispute from the consumer. It doesn't say that another furnisher can notify the CRA of a dispute with their own TL, and then the CRA must then notify any other df with a TL connected to that account.

The reason I point that out is because of the procedures required under the FCRA.

§ 623a(3):

If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer.

The above specifically states that a TL must be marked as disputed if the df receives notice of the dispute from the consumer. That's the plain reading of the FCRA.

You're saying that a df must mark their TL as disputed if they receive notice of a dispute from another entity. No where is it stated or implied that a df must mark their TL as disputed if they receive notice of a dispute from anyone other than the consumer.

I believe if you were to present such a theory in court, the first thing you be asked is why, if the OC's TL is incorrect, you didn't dispute with the OC BEFORE the JDB ever purchased the account.

I understand what you're saying, but if such a theory were fact, or even just possible, don't you think it would be reported somewhere?

[Downto0]

The FCRA is a hard read. It's easy to mix the different section by attributing different meaning from one section to other sections. 623(a)(2) stands alone. It says nothing about anyone disputing. It merely states that a df must correct and update information that they have already furnished to a CRA if they determine that the information is no longer accurate and complete.

(2) Duty to correct and update information. A person who

( has furnished to a consumer reporting agency information that the person determines is not complete or accurate, shall promptly notify the consumer reporting agency of that determination and provide to the agency any corrections to that information, or any additional information, that is necessary to make the information provided by the person to the agency complete and accurate, and shall not thereafter furnish to the agency any of the information that remains not complete or accurate.

It doesn't say anything about anyone disputing, just that if the df finds the information that they already furnished is no longer accurate or complete that the df will correct the information so that it is. If the OC is told by a debt buyer that the debt they bought from them is disputed then the undisputed tl of the OC is no longer accurate and complete.

623(a)(3) is entirely different in that it requires that the consumer does dispute directly to the df.

In a sense, all this does not really matter because there is no private right of action for any of these violation under section (a). Only ( is actionable by the consumer. It's just that I've dissected this part of the FCRA several times over the years and I'm sure of what I am saying. No case law is needed because if you keep the sections separate it is quite clear that (2) and (3) require different triggering events to be invoked. (2) requires that the df themselves realized there is a mistake in what they already furnished to the CRA's and (3) requires a dispute from the consumer.

What I want to do is draw the JDB into a violation by disputing the entire debt. A lot of them do list their own tl as disputed nowadays. They do not, however, communicate to anyone else that the debt is disputed. As I said, I do have case law where a JDB violated the FDCPA because they did not inform a buyer of their disputed debt that the debt was disputed. This establishes that communicating a debt means more than listing their own tl as disputed.

It does not matter that the consumer did not dispute the debt to the OC when the OC had the debt. Sometimes the consumer does not even know that they still owed the OC or maybe the OC has the wrong person. Yea, most of the debtors know about the debt but some do not. In order to protect the ones who do not owe the debt the FDCPA gives the right to everyone to dispute. It could not be done any other way. How would one ferret out the non-debtors from the debtors? A dispute must be allowed for one and all and the system, hopefully, will sort out the non-debtors from the debtors.

[BV80]

It doesn't say anything about anyone disputing, just that if the df finds the information that they already furnished is no longer accurate or complete that the df will correct the information so that it is. If the OC is told by a debt buyer that the debt they bought from them is disputed then the undisputed tl of the OC is no longer accurate and complete.

You're stretching it here. First, you still haven't show that a JDB is required to communicate to the OC that a debtor disputed the debt in a DV request. Second, a general "I dispute the debt" in a DV letter is not necessarily the same as a specific dispute about an inaccuracy in a TL. Third, you're assuming that failure to act on a notice from a JDB regarding an unspecific dispute in a DV letter would make the OC's TL inaccurate and incomplete.

(2) requires that the df themselves realized there is a mistake in what they already furnished to the CRA's

A dispute in a DV request doesn't necessarily mean there is a mistake in a TL. How many debtors state "I dispute the debt", but give no details?

You're original question was based upon a dispute in a DV request. A dispute in a DV request and a dispute regarding a TL can be 2 different things. It doesn't mean there's a mistake in the TL.

What I want to do is draw the JDB into a violation by disputing the entire debt.

The point is you haven't shown or proven that a JDB has to go back to the OC and report that the consumer disputed the debt with JDB. There's nothing anywhere that evidences your theory. Don't you think if your theory were correct that the information would be available? Attorneys representing debtors would love this.

As I said, I do have case law where a JDB violated the FDCPA because they did not inform a buyer of their disputed debt that the debt was disputed. This establishes that communicating a debt means more than listing their own tl as disputed.

That is not the same as going BACK to someone who no longer owns the debt. The JDB had to inform a future owner. It's 2 different things.

It does not matter that the consumer did not dispute the debt to the OC when the OC had the debt. Sometimes the consumer does not even know that they still owed the OC or maybe the OC has the wrong person. Yea, most of the debtors know about the debt but some do not. In order to protect the ones who do not owe the debt the FDCPA gives the right to everyone to dispute. It could not be done any other way. How would one ferret out the non-debtors from the debtors? A dispute must be allowed for one and all and the system, hopefully, will sort out the non-debtors from the debtors.

You're correct. Sometimes the consumer doesn't know they still owe money. There is identity theft. However, our credit reports are our responsibility. It's our responsibility to dispute those details with which we don't agree. It's not the responsibililty of one df to pass along your dispute to other dfs. And as I stated before, a general dispute of a debt in a DV is not necessarily the same as a specific dispute with an inaccuracy in a TL.

You're mixing apples and oranges. You're trying to connect JDBs and the FDCPA to OCs and the FCRA.

In any case, I hope you cite your case law. I'd like to read the details of the cases.

[Downto0]

You're mixing up the FCRA sections too much. Then you're mingling my theory which is just a theory and not meant to be fact.

Like I said, the FCRA doesn't really matter because there is not private right of action of the section we are debating. I only brought it up because the OC would be obligated to list their tl as disputed if the purchasing JDB told the OC that the entire debt was disputed. A tl not listing a debt as disputed when the debt has, in fact, been disputed, is not accurate or complete.

Here is one case for you to look at. It is not one of the one's I spoke of about the JDB selling a disputed debt to another buyer but this one I cite is more applicable to my theory:

In Brady v The Credit Recovery Company the court said this:

§ 1692e(8) merely requires a debt collector who knows or should know that a given debt is disputed to disclose its disputed status to persons inquiring about a consumer's credit history.

No.

On a side note...this case was more about whether a dispute needed to be in writing, or not, to invoke the FDCPA. The court decided that a dispute did not need to be in writing. This would be a helpful case later down the road where you orally tell a collector that you dispute the debt and they don't list the debt as disputed because they thought the dispute needed to be in writing.

Back to my case...the helpful part for me is where the court said "to persons inquiring about a consumer's credit history". Let's assume that I do dispute the entire debt, and maybe I would plainly state that I dispute the OC's debt that the JDB refers to in their dunning letter to me (I'm not sure yet how I will pose the dispute but I want to make it clear to the JDB that I am disputing the entire debt back to the OC),

The JDB has likely gotten a copy of my cr and knows that the OC is listing the same debt except that it is listed as sold and has a zero balance. The JDB also knows that other persons will eventually be inquiring about my credit history...promotional offers, firm offers of credit, loan for a car, house, boat...you get the picture.

Being that it is inevitable that many people will look at my cr and that the JDB knows that the OC's debt is disputed as well, the JDB would be remiss if they did not inform the OC of the dispute so that they could disclose its disputed status to persons inquiring about my credit history.

[BV80]

Back to my case...the helpful part for me is where the court said "to persons inquiring about a consumer's credit history". Let's assume that I do dispute the entire debt, and maybe I would plainly state that I dispute the OC's debt that the JDB refers to in their dunning letter to me (I'm not sure yet how I will pose the dispute but I want to make it clear to the JDB that I am disputing the entire debt back to the OC),

The JDB has likely gotten a copy of my cr and knows that the OC is listing the same debt except that it is listed as sold and has a zero balance. The JDB also knows that other persons will eventually be inquiring about my credit history...promotional offers, firm offers of credit, loan for a car, house, boat...you get the picture.

I really do understand what you're saying. I just disagree.

Let's assume this scenario:

An old account has been sold 4 times. The OC and 3 JDBs are reporting the same account. According to your theory, if you dispute the debt with JDB #3, that JDB must then go back and inform the previous 2 JDBs and the OC that the debt is disputed.

If something like that was required, I guarantee you that DBA International and possibly ACA International would be up in arms about it.

"to persons inquiring about a consumer's credit history".

Yes, the JDB must inform others about the dispute in the JDB's TL. Again, the JDB is not responsible for the OC. We have some responsibility ourselves. If we want the OC's TL to be marked as disputed, that's our job. It's not the job of a JDB.

Being that it is inevitable that many people will look at my cr and that the JDB knows that the OC's debt is disputed as well, the JDB would be remiss if they did not inform the OC of the dispute so that they could disclose its disputed status to persons inquiring about my credit history.

You're assuming the OC would have to respond to a notice from a JDB.

I know you stated that the OC's TL would not be complete and accurate with showing the dispute. The whole point is that you have to prove that a JDB must inform the OC of a dispute. If you can't prove that, then you definitely can't prove an OC must respond to the JDB's notice.

OR, if you can't prove an OC must respond to a JDB notice, then what would be the purpose of requiring the JDB to notify the OC?

[Downto0]

An old account has been sold 4 times. The OC and 3 JDBs are reporting the same account. According to your theory, if you dispute the debt with JDB #3, that JDB must then go back and inform the previous 2 JDBs and the OC that the debt is disputed.

It's not an old account. It has just recently been sold to a JDB by the OC. But in your scenario, there is case law which states that a selling JDB must inform the buying JDB that the debt is disputed. I would sue both and let them point fingers at each other as to whether the selling JDB did not tell the buying JDB that the debt was disputed, or the buying JDB was informed but they did not list their own tl as disputed.

Excerpt from a Michigan consumer law newsletter:

Cases Providing for a Consumer Cause of Action

The first case to hold that the consumer has a FDCPA cause of action when a selling collector fails to mark a debt as disputed when selling a debt to a purchasing director was the 9th Circuit case of Magrin v Unifund CCR Partners, Inc.14 In Magrin, the consumer had sued both the selling collector and the purchasing collector. The consumer’s FDCPA claim against the selling collector was based on its failure to mark the debt as disputed. The trial court dismissed the consumer’s claim again the selling collector on the basis that the act did not provide a cause of action for a misrepresentation made by one collector to another. The Magrin court reversed, holding:

Under 15 U.S.C. § 1692e, a debt collector violates

the Act if it uses “any false, deceptive, or mislead ing

representation or means in connection with the collection

of any debt.” Th is prohibition includes false representations

as to “the character, amount, or legal

status of any debt.” 15 U.S.C. § 1692e(1)(A).

Th us, a consumer states a valid claim for relief under

the Act when he alleges that a debt collector has made

false representations as to the legal status of a debt

in connection with the sale, transfer or assignment of

a debt to another debt col lector, with the knowledge

that the purchaser, transferee or assignee intends to

initiate or continue at tempts to collect the debt.15

They cite other cases which you may want to read:

Lyngklip & Associates

These cases don't directly establish that a purchasing JDB must inform the selling OC that the debt the JDB bought from the OC was disputed by the consumer but I would argue that since the JDB is required to forward the dispute to a new buyer of the disputed debt, it would not be unreasonable that a JDB, who purchases a debt from an OC, should also communicate back to the OC that the OC's debt (which the JDB just bought) is disputed.

This would only work if the OC is still listing the debt. If the OC has deleted their tl concerning the debt, there would be no way to know whether the JDB did, or did not, communicate to the OC that the debt was disputed. If the OC is still listing their tl for the debt then it would be clear whether the OC is listing the debt as disputed or not. If their tl is not listed as disputed then either the JDB did not communicate to the OC that their tl was disputed or the JDB did but the OC chose not to list their tl as disputed. Again, I would sue the JDB and file a complaint with the FTC against the OC and let them point fingers at each other.

Again, the JDB is not responsible for the OC

They are responsible for communicating that a debt is disputed. At first, JDB's didn't think they had to list their own tl as disputed and then they did not think that they had to tell a buying JDB that the debt was disputed. We now know that they do because those theories had been brought forward as a cause of action. Those theories are now case law.

If it hasn't already, it's only a matter of time before someone, maybe me, will bring my theory forward as a cause of action and the issue will be decided.

It makes perfect sense to me that a debt collector should communicate to anyone who has a tl concerning a certain debt that that debt is disputed. If the JDB was not required to do so then the OC's tl (which is essentially the same debt as the JDB's) would not be accurate and complete - and the JDB would know that.

[BV80]

We'll have to agree to disagree. If you choose to advance your theory in court, I wish you the best.

[Guest usctrojanalum]

Once the OC relinquishes their rights to the debt they are no longer required to upgrade a credit report beyond "sold/transferred to another lender" and listing the account as a zero balance. Any other interpretation is just a stretch.

A debt that is held by a JDB and a debt held by an OC are clearly not the same debt at all.

[Downto0]

Well, no. We've already gone over this and very recently. If a df determines that they have furnished information which is not accurate or complete then they must either delete their tl or update. It does not matter if the df has sold the debt. If it is inaccurate or incomplete they must update the report so that it is accurate and complete.

For example, if the df discovers that a late was not really a late after they sold the debt, they would still have to update their tl to remove the late else delete the tl all together. They just can't knowingly let false information remain on a tl because the debt is sold and they don't think they need to update. I'm sure a lot of df's do not update after the debt is sold but if someone finds out that an OC is not removing the lates then that someone could complain to the FTC and they can be sued. Fat chance, however, because without the incentive of private right of action what would be the point in anyone complaining?

The debts are the same. It originated with the OC and all rights to collect have been assigned to the JDB. The JDB will tell you this in their first dunning letter. They want you to understand that it is the same debt as it was with the OC so that you will know what they are talking about and won't dispute and just pay up. The only thing that has changed is the ownership and possibly a few add-on charges. Kind of like a Mr Potato Head...you can put the eyes, ears, and other body parts anywhere you want but it's still a potato.

Anyway, I'm going for it. I just finished typing up the dv and dispute letter and will be sending it out this week cmrrr.

[BV80]

I found this case law from the 8th Circuit Court of Appeals and posted some excerpts:

Wilhelm v. Credico, Inc., 519 F. 3d 416 - Court of Appeals, 8th Circuit 2008

Gregory Wilhelm's credit card debt was assigned for collection to Pinnacle Credit Services, LLC ("Pinnacle"), and then to Credico, Inc. ("Credico"). Credico sent Wilhelm a "Notice of Lawsuit" letter threatening to sue unless Wilhelm paid $8,808.20, an amount that included a charge of interest on past due interest, which violates North Dakota law. Wilhelm disputed the debt and demanded verification. Recognizing its error, Credico did not sue.

I. The Failure To Report the Debt as Disputed Claims.

In late 2004, before filing this action, Wilhelm obtained reports from various credit reporting agencies showing that, in December 2003, Pinnacle reported the debt as in collection but not disputed. Wilhelm alleges that Credico violated § 1692e(8) by failing to report his dispute of the debt to Pinnacle, and that Pinnacle violated § 1692e(8) by failing to report the debt as disputed to credit reporting agencies.

The court dismissed the claim against Credico on the grounds that Credico had no affirmative duty to report the debt as disputed to Pinnacle and that Wilhelm failed to refute an affidavit by a Credico employee averring that he notified Pinnacle when Credico received Wilhelm's letter disputing the debt on December 12, 2003.

Both claims are premised on Wilhelm's assertion that § 1692e(8) imposed an affirmative duty on Credico and Pinnacle to disclose that he had disputed the debt. He cites no case supporting this contention, and we reject it.

Subsection 1692e(8) applies to the "communicating" of "credit information." "Communication" is defined as "the conveying of information regarding a debt directly or indirectly to any person through any medium." § 1692a(2). Reading these provisions together, as we must, the relevance of the portion of § 1692e(8) on which Wilhelm relies — "including the failure to communicate that a disputed debt is disputed" — is rooted in the basic fraud law principle that, if a debt collector elects to communicate "credit information" about a consumer, it must not omit a piece of information that is always material, namely, that the consumer has disputed a particular debt. This interpretation is confirmed by the relevant part of the Federal Trade Commission's December 1988 Staff Commentary on the Fair Debt Collection Practices Act:

1. Disputed debt. If a debt collector knows that a debt is disputed by the consumer . . . and reports it to a credit bureau, he must report it as disputed.

2. Post-report dispute. When a debt collector learns of a dispute after reporting the debt to a credit bureau, the dispute need not also be reported.

Wilhelm v. Credico - Google Scholar

[Downto0]

Interesting case...and in my district. However, and you knew there would be an "however" from me, didn't you?, one has to look at all the players to see exactly what each did.

Pinnacle and Credico are two collection agency which were assigned the right to collect the debt. The case does not explain any involvement of the OC and one cannot assume that the OC does or does not still own the debt. It is reasonable to think that the OC did still own the debt as debt collectors, from what I have read, don't buy debts. They assign them to debt collectors to collect. This is the position I will assume.

Wilhelm pulled his cr and found that Pinnacle had reported the debt. Credico did not report the debt. The OC may or may have had a tl but this point is moot as we are dealing with FDCPA violations where the OC is exempt.

The main problem with violations against Pinnacle is that any claim against them was time barred. They also seemed to not have updated their tl after the dispute so they did not fail to communicate that the debt was disputed because they did not report at all. If a collector does not report then they do not communicate.

On a side note, Pinnacle still would have violated the FCRA because of their duty to update inaccurate and incomplete information. But, as I said in other posts, there is no private right of action for the debtor so there is very little incentive for the debtor to complain about this violation.

As for Credico, they also never communicated any credit information. They did not have a tl listed on Wilhelm's cr and they only told Pinnacle that the debt was disputed.

Actually the fact that Credico did inform Pinnacle that the debt was disputed adds credibility to my theory that there is a vicarious liability issue at work here. The case does not say, but it is likely that Credico got Wilhelm's cr and saw that Pinnacle was reporting the debt. Credico apparently felt obligated to inform Pinnacle that the debt was disputed because that is what they did. Why did they feel obligated? I speculate that it was due to the FDCPA and that they thought they would be vicariously liable if they failed to communicate to Pinnacle that Pinnacle was supplying false information that the debt was not disputed. Look at what the court said:

...the summary judgment record consists only of the affidavit by Credico's employee that Credico immediately reported Wilhelm's disputing of the debt to Pinnacle, which if true defeats the claim.

Even if Pinnacle had updated their tl, Credico had fulfilled their obligation to the FDCPA.

There does not seem to be much case law dealing with this issue as this court did not cite any, nor did any of the litigants. I still think that a debt collector, or JDB, is obligated to inform the OC that their debt is disputed if the OC has a tl and are updating.

[BV80]

I had a feeling there would be a "however".

Actually the fact that Credico did inform Pinnacle that the debt was disputed adds credibility to my theory that there is a vicarious liability issue at work here. The case does not say, but it is likely that Credico got Wilhelm's cr and saw that Pinnacle was reporting the debt. Credico apparently felt obligated to inform Pinnacle that the debt was disputed because that is what they did.

That's not what the court ruled. The lower court and the 1st Circuit agreed that Credico had ""no affirmative duty to report the debt as disputed to Pinnacle". Who knows why they did so? But it doesn't matter because the court ruled they were under no obligation to tell Pinnacle had been disputed.

Why did they feel obligated? I speculate that it was due to the FDCPA and that they thought they would be vicariously liable if they failed to communicate to Pinnacle that Pinnacle was supplying false information that the debt was not disputed. Look at what the court said:

...the summary judgment record consists only of the affidavit by Credico's employee that Credico immediately reported Wilhelm's disputing of the debt to Pinnacle, which if true defeats the claim.

The court made that statement because Wilhelm alleged that Credico had a duty to report back to Pinnacle but didn't do so, and Credico disputed it with an affidavit. The court's statement is merely to point out that Credico had refuted Wilhelm's claim and that the affidavit would have defeated it.

However, that statement doesn't validate Wilhelm's claim that Credico was required to report the dispute to Pinnacle. The court didn't state that at all. They had already rejected his claim that Credico had an affirmative to report back to Pinnacle.

Even if Pinnacle had updated their tl, Credico had fulfilled their obligation to the FDCPA.

Since the court specifically stated that Credico had no obligation to report the dispute to Pinnacle, then there is no such obligation under the FDCPA.

I still think that a debt collector, or JDB, is obligated to inform the OC that their debt is disputed if the OC has a tl and are updating.

Wait...that's not what you stated before. You stated:

If a JDB has already listed a tl for the debt they bought from the OC they cannot get out of listing that tl as disputed. They can't get out of it by not updating. They still have to update one more time to show that the tl is disputed. They could probably delete the tl and be in compliance.

Also:

These cases don't directly establish that a purchasing JDB must inform the selling OC that the debt the JDB bought from the OC was disputed by the consumer but I would argue that since the JDB is required to forward the dispute to a new buyer of the disputed debt, it would not be unreasonable that a JDB, who purchases a debt from an OC, should also communicate back to the OC that the OC's debt (which the JDB just bought) is disputed.

This would only work if the OC is still listing the debt. If the OC has deleted their tl concerning the debt, there would be no way to know whether the JDB did, or did not, communicate to the OC that the debt was disputed. If the OC is still listing their tl for the debt then it would be clear whether the OC is listing the debt as disputed or not. If their tl is not listed as disputed then either the JDB did not communicate to the OC that their tl was disputed or the JDB did but the OC chose not to list their tl as disputed. Again, I would sue the JDB and file a complaint with the FTC against the OC and let them point fingers at each other.

You're previous statements are what this whole debate has been based upon. You've claimed that a JDB must report back to a previous owner that a debt is disputed and that the OC (or previous owner) must report their TL as disputed or it's not "complete and accurate". You even stated it doesn't matter if they're no longer updating. Until now, you never said the OC didn't have to do so if they're no longer updating.

An OC doesn't update a sold account. They can't update. Any entity who no longer has anything to do with an account cannot update anymore. It doesn't matter if it's an OC, CA, or JDB. Once they're no longer handling the account, they can't update.

Now, you've admitted that an OC doesn't have to make a change in their TL if they're no longer updating. Therefore, a claim that a JDB must inform an OC (or any other previous owner) doesn't hold water because the OC doesn't and cannot update an account they no longer own unless there is an inaccuracy. Under your theory, the FDPCA would be requiring the JDB to do something that doesn't make sense and is a total waste of time since the OC doesn't have to report the dispute.

Also, look what the court stated about "post-reporting":

2. Post-report dispute. When a debt collector learns of a dispute after reporting the debt to a credit bureau, the dispute need not also be reported.

If the JDB is already reporting the debt when you dispute, they don't have to report it as such. This is another reason a JDB doesn't have to report a dispute to past owners. If those past oweners are already reporting, it doesn't matter if they're updating or not. They only have to report a dispute if they learn of it BEFORE they ever report to the CRAs. But again, previous owners cannot update.

In addition, since the 1st Circuit agreed with the lower court that Credico had no affirmative duty to report the dispute to Pinnacle, that shows that no entity must go backward and inform previous owners that a debt is disputed. Again, since a previous owner doesn't update, having to inform those inform those previous owners wouldn't make sense. The court specifically stated:

"Both claims are premised on Wilhelm's assertion that § 1692e(8) imposed an affirmative duty on Credico and Pinnacle to disclose that he had disputed the debt. He cites no case supporting this contention, and we reject it. "

1. OCs and previous owners can't update their TLs. What sense does it make for a JDB to have to report a dispute to those entities?

2. Even if previous owners did update, they still wouldn't have to report the dispute.

3. The JDB doesn't have to report the dispute if they're already reporting to the CRAs before receiving your dispute.

Based on the above, along with the !st Circuit's rejection of the claim that Credico had to report the dispute to Pinnacle, the FDCPA does not impose an obligation on debt collectors or JDBs to report a dispute to previous owners.

Edited April 18, 2012 by BV80

[Downto0]

The lower court and the 1st Circuit agreed that Credico had ""no affirmative duty to report the debt as disputed to Pinnacle".

And why did they rule that way? First one must understand that there was no case law to support Wilhelm's claim or the court's ruling:

Both claims are premised on Wilhelm's assertion that § 1692e(8) imposed an affirmative duty on Credico and Pinnacle to disclose that he had disputed the debt. He cites no case supporting this contention, and we reject it.

The court or the defendants didn't have any case law at all. Instead the court relied on the FTC's interpretation of what Congress intended.

Having rejected Wilhelm's affirmative duty contention, we have no difficulty concluding that the district court properly granted summary judgment dismissing these claims.

They had no difficulty because there is nothing to dispute the FTC's opinion and that's all they went with.

I've found that courts give deference to the FTC when it supports their way of thinking and do not when it does not. My point would be that the next litigant filing a similar claim would only need to find a little suitable case law from any district which countered that opinion.

There were 2 more reason why the court ruled against Wilhelm, (1) Credico did communicate to Pinnacle that the debt was disputed and (2) Pinnacle never updated their tl after receiving notice of the dispute so there was no need, under the FDCPA, to report the tl as disputed.

I would guess that this court would have dismissed the claim anyway without the FTC opinion. Contrarily, if Pinnacle would have still been reporting the tl without reporting it as disputed and if Credico would not have communicated that the debt was disputed to Pinnacle the court very well could have ruled the opposite way. Who knows? But it is for sure that there is a dearth of qualified opinions on the issue. The little they could find was 3 to 0 against Wilhelm so the court went against him.

An OC doesn't update a sold account. They can't update. Any entity who no longer has anything to do with an account cannot update anymore. It doesn't matter if it's an OC, CA, or JDB. Once they're no longer handling the account, they can't update.

Yes, they have to under the FCRA if they determine that what they have previously furnished is no longer accurate and complete. I've already given an example about the OC realizing that the lates they listed were not really lates - after they sell the debt. They still have to update their tl one more time to reflect that the debtor does not have any lates.

I still think that a debt collector, or JDB, is obligated to inform the OC that their debt is disputed if the OC has a tl and are updating.

Wait...that's not what you stated before.

I believe you quoted what I was saying about the FCRA. The FCRA does not care whether the df is reporting, or not. If the information is wrong then the df must update whether they are reporting, or not.

Also, look what the court stated about "post-reporting":

2. Post-report dispute. When a debt collector learns of a dispute after reporting the debt to a credit bureau, the dispute need not also be reported.

This is what the FTC said. One simple differing case from any district would get this opinion thrown out in a heartbeat. The FTC does not have chevron.

If the JDB is already reporting the debt when you dispute, they don't have to report it as such.

Under the FDCPA they do if they update their tl after receiving notice of a dispute. Under the FCRA they also do whether they are updating or not.

On # 1,2 and 3 at the bottom you are repeating yourself. You're also mixing the FCRA and the FDCPA. Each has their own stipulations - and they differ.

The Wilhelm case was an interesting case because it did discuss the mechanics of a dispute but it does not decide whether a JDB must communicate that a debt is disputed to the OC, or not. I did not even see a reference to an OC. I've kind of come to the conclusion that the OC hired Pinnacle to collect and that Pinnacle farmed the collection of the debt out to Credico.

Kind of a hard trail to follow.

It'd be kind of nice to read through Congress's notes on 807(8) to see if there is a clue as to why they worded that section as they did. Sometimes the courts do just that for guidance.

Do you know where to find the notes?