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Midland Dunning Letter or Settlement Offer, TL Deleted once


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Today, I received a settlement letter from Midland regarding a TL that was deleted approximately 6 months ago. I never received an initial dunning letter. I checked my CR and noticed Midland's negative TL. After monitoring my CR for several months, I noticed that Midland was reporting this TL inconsistently. Midland used 2 different names (Funding and Credit Management) to open and close the TL, they listed themselves as a factoring company, made the TL appear to be a loan or revolving credit, they supposedly sent a dunning letter to my old address but pulled my CR which listed my current address and phone number.

Midland also called after being told to communicate with me via writing. I contacted the FTC and the California AG to report what I believed to be FCRA violations. I also disputed the TL with the CRA's. I disputed this TL because to my knowledge the bill was PIF. I called the OC and they said the remaining balance did not seem right. However, all records were sold to the CA and I was instructed to call Midland.

Of course, when Midland responded to the AG they acted as if they were operating in accordance with the law. They also claimed that the debt did not have to be validated because I did not ask for validation within 30 days.

I have my old CR's, certified DV letter that asked to only be contacted via writing, phone records, and all other correspondince. I will be mailing a request for DV within the allotted 30 day period. I just wanted to know how else I should proceed with this vile CA.

I believe this collection is still within the SOL. However, I've read that cell phones may fall under a Federal, 2 year SOL. I have not received re-insertion letters from any CRA so far. Midland's letter states "this account may still be reported on your credit report".

Midland supplied the following:

Current Balance, Payment Due Date, OC, Original Account #, Current Owner, MCM Account #, Reduced Payment Option

Seems like this is a settlement, dv combo letter? How should I proceed? Thanks for any and all advice.

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There are several things wrong here.

First there is a huge debate over sending a debt collect a letter that states communication to be done by mail only. This is considered a limited cease and desist order. The big debate under the FDCPA is whether or not the law allows for a limited cease and desist order. Some courts have agreed that it all or nothing. In other words when you send a cease and desist order it means you must demand a complete cease and desist you cannot limit what they can and cannot do.


There is also the issue of Midland claiming your account was factored, when indeed bad debt is not factored after it becomes delinquent. I have debated on this issue a lot. They state factoring company in order to allow them to undermine the FCRA and the FDCPA, it allows them to create a brand new account and make it look as if it is a loan. This is nothing but another attempt by Midland to continue their deceitful bill collection tactics.


They sent you enough info as required by the fdcpa to constitute a validation.


I would not answer any of there letters, but I would save them in a file in case they file suit.

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They state factoring company in order to allow them to undermine the FCRA and the FDCPA, it allows them to create a brand new account and make it look as if it is a loan.


There is absolutely no court precedent in regard to JDBs to support this.  A JDB reported as a factoring company on my CR but their entry was deleted at the same time as the OC's entry.


Some CRAs provide an estimated date of removal of a TL.  If there's such a date along with a JDB's entry and that date coincides with the date that the OC's entry will be removed, then the JDB has done nothing to try to reage the account or make it appear to be a brand new loan.

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I am not aware of any case law that says they cannot send a settlement offer in their first communication.


When it comes to factoring there are a lot of gray areas. What debt collectors call factoring and what is actually considered factoring is two different birds.


In The U.S. under the Generally accepted accounting principles receivables are considered sold under the statement of financial accounting standards No. 1140. when the buyer has a no recourse contract with the original creditor. To treat the transaction as a sale under the GAAP, the sellers liability under any recourse contract must be estimated at the time of the sale. If this is not accomplished the transaction is considered a loan and the receivables as the collateral.


The first thing a court will examine is the the parties true intent. The parties’ intention to accomplish a true sale, rather than a loan, must be expressed in the transaction documents. A court will examine the substance not the form of the transaction. True substance when a debt is purchased by a debt buyer is simple, they purchase the debt out right for a discount, this is not factoring, this is a true sale.


I have found no case law as of yet that states whether a company calls them self a factoring company or a debt purchaser on a credit report makes a difference. When lenders see factoring company on a CR they know what it means.

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