Debt Validation with In house Collection??

[LMB]

We have a B Of A card that has not been charged off. Received a collection letter from First Source asking for us to request debt validation by May 4th or they would assume the debt is ours. I am confused by this letter as the account has yet to be charged off. The charge off date is set for May 30th. I figured I would ride it out and see what happens would still love to settle this but they are not being receptive to any offers.

So was unsure when it charges off do I still have the 30 days to respond with the dvl I usually send once the account actually charges off?

[BV80]

Have you stopped paying? Just because an account hasn't been charged off doesn't mean the OC can't attempt to collect if you're not paying.

[LMB]

We stopped paying long ago. My concern was more why am I receiving a letter from a collections agency asking us to request debt validation when we haven't been charged off. Seemed they were out of the steps that usually are taken. This is the first time this has happened out of 8 cards. Just was different so I was wondering why?? and how that would effect us once it was charged off. I fully expected the OC to try to collect the debt not the statement asking us to send for debt validation.

Hope that makes sense.

[debtorshusband]

"Charge off" and "debt collecting" and "debt validation" have nothing to do with one another. Let me try to sort this out.

Any time someone stops paying on a credit card, the creditor is going to try to collect. They may hire a debt collector. The debt collector may send you a dunning letter, which is a letter demanding payment. In their first such letter, the debt collector must inform you of your rights under the FDCPA to dispute the debt and request verification. When you get such a letter, you have 30 days to send a DV letter.

Separately from all this, the debt continues to go unpaid. After a period of time, generally 180 days, the creditor will "charge off" the account. This only means that they are now declaring the debt to be a bad debt, and for accounting purposes they are no longer carrying the expected repayment in their "Accounts Receivable" column, but instead are reporting the payments they made to businesses on the consumer's behalf as losses.

Debt collection efforts may occur before the charge off occurs, or afterward, but they don't affect one another. DV letters are sent in response to the collection letters. The charge off does not trigger any time period to send a DV letter, and in fact a charge off has almost no effect on you, the consumer.

In summary, forget about when the charge off occurs, it has nothing to do with you. When you get a letter telling you that you have 30 days to send a dispute, that's when you respond with a DV letter.

Regards,

DH

[LMB]

That is interesting and makes sense however, I have gotten collection letters before charge off in the past. I sent a DV letter to those ones even though it didn't specifically say anything about verification. The response I got back was we are original creditor and do not have to verify the debt.

Therefore I assumed that these collections were an in-house type not a sent out to collections type.

They did quit calling me all the time so it seemed to work out fine and eventually was able to settle with those one. This one just sent me for a loop I guess.

[debtorshusband]

I have gotten collection letters before charge off in the past. I sent a DV letter to those ones even though it didn't specifically say anything about verification. The response I got back was we are original creditor and do not have to verify the debt.

Therefore I assumed that these collections were an in-house type not a sent out to collections type.

I think you are exactly right: those other collection letters sound like they were reminders, demands, etc., from the Original Creditor, and OC's are not subject to the FDCPA. This time you got a letter from First Source, who I'm assuming is a 3rd party debt collector, so they are required by the FDCPA to include the standard Verification Notice. And there is nothing that prohibits an OC from turning a debt over to a 3rd party debt collector before the account is old enough to get charged off. It's just happenstance that it never happened to you before.

One thing intrigues me, however. California has the Rosenthal Fair Debt Collection Practices Act. I have always understood that it mirrors the FDCPA, and also applies to Original Creditors. However, I have never really delved into the particulars deeply. You may want to do so, to determine if OC's were in fact bound by the Rosenthal Act to produce verification information when requested.

Good luck.

DH

[LMB]

I looked up the Rosenthal act. Found this info that seems to explain the two exceptions that are not covered in California.

There are two significant exceptions to section 1788.17 of the Rosenthal Act: creditors do not need to provide consumers with the “mini-Miranda” notice required by section 1692e(11) of the FDCPA, nor must creditors send consumers the validation notice mandated by section 1692g of the FDCPA. See Cal. Civ. Code § 1788.17. But the remaining substantive provisions of the FDCPA, as well as the remedies provided by section 1692k(a)(3) of the Act, apply to creditors who collect in California. Id.

Can't post the link but you get the idea........

Gave me lots to look into and think about thanks for taking the time.

[LMB]

Settled this account for 25%! Thanks again learned much!

[debtorshusband]

There are two significant exceptions to section 1788.17 of the Rosenthal Act: creditors do not need to provide consumers with the “mini-Miranda” notice required by section 1692e(11) of the FDCPA, nor must creditors send consumers the validation notice mandated by section 1692g of the FDCPA. See Cal. Civ. Code § 1788.17. But the remaining substantive provisions of the FDCPA, as well as the remedies provided by section 1692k(a)(3) of the Act, apply to creditors who collect in California.

Aha. Now I've learned something, too.

Thanks.

DH