Blue Squad

What is Initial Communication for Debt Validation?

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This is what FDCPA 809 says:

 

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice . . .

 

 

Let's say a consumer notices a delinquent account on her credit report for the very first time.  There was no previous telephone call or postal mail about this particular account.

 

Pick below what you feel is the correct response.  Is the initial communication on:

 

A.  the date the JDB first inserted the adverse item on the credit file, but before the consumer ordered the credit report.

 

B.  the date the consumer downloaded the credit report, and noticed the delinquent account for the very first time.

 

C.  the date the consumer contacted the JDB on the telephone for the very first time, and the JDB told the consumer in the phone conversation that she owes them money for the delinquent account.

 

D.  the date the JDB mailed the dunning letter, after the consumer called the JDB on the telephone.

 

E.  None of the above.  (Please explain.)

 

Bonus points:  Please provide statutory, regulatory, or case law to back up your assertion.  Thanks.

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@Blue Squad

 

A & B do not apply.  An entry on a credit report is not considered an initial communication for the purposes of the FDCPA because it's not a communication WITH the consumer.

 

1692g(a):

 

Within five days after the initial communication with a consumer...

 

The first candidate—"when Defendant communicated the debt to Plaintiffs credit report"—cannot support a claim under the FDCPA because it is not a communication with a consumer.  Robinson v. TSYS Total Debt Mgmt., Inc., 447 F.Supp.2d 502, 508-509 (D.Md. 2006)

 

C.  The District Court in Oregon in Blair v. Bank of America stated:

 

The phrase "initial communication with a consumer," followed by the requirements imposed on the debt collector for such an initial communication, suggests that the statute properly understood refers to and requires a communication that is initiated by the debt collector, not a communication initiated by the consumer.

 

That court referred to Camacho v. Bridgeport Financial from the Ninth Circuit Court of Appeals:

 

("Under § 1692g(a), a debt collector must send a consumer debtor within five days of its initial attempt to collect any debt, a written notice containing. ..." (Emphasis added.)  Camacho v. Bridgeport Financial, Inc., 430 F.3d 1078, 1079 (9th Cir. 2005).

 

Section 1962g(a) merely requires a validation notice to be sent to a consumer on or before five days after an initial communication is sent by the debt collector.  Spira v. Ashwood Fin., Inc., 358 F.Supp.2d 150, 158 (E.D.N.Y.2005).

The clear language of § 1692g(a), however, is that an initial communication is sent by the debt collector, not by the debtor. Campbell v. Credit Bureau Sys., Inc., 655 F.Supp.2d 732, 741-43 (E.D.Ky.2009).

 

Other courts have referred to "its" initial communication as was done in the Camacho case:

Section 1692g requires a debt collector to send a consumer, either in its initial communication or within five days of its initial communication, a written notice containing: 1) the debt amount; 2) the name of the current creditor; 3) a statement that if the consumer disputes the debt in writing within thirty days, the collector will send verification of the debt to the consumer; 4) a statement that if the consumer does not dispute the debt within thirty days, the collector will assume the debt to be valid; 5) a statement that the collector will send the name of the original creditor, upon written request within thirty days. 15 U.S.C. § 1692g(a). Miller v. Payco-Gen. Am. Credits, Inc., 943 F.2d 482, 483 (4th Cir.1991).

Section 1692e(11) provides that a debt collector must disclose in its initial communication with the debtor that "the debt collector is attempting to collect a debt and that any information obtained will be used for that purpose," except that the provision does "not apply to formal pleading made in connection with a legal action." Thomas v. Law Firm of Simpson & Cybak, 392 F.3d 914, 918 (7th Cir.2004) (en banc).

 

 

D.  If a court does not consider a communication from a consumer to a CA to be an initial communication, then the dunning letter itself would be the initial communication. 

 

A dunning letter that is also an initial communication can contain the 30-day notice.  If that notice is contained in the first dunning letter (initial communication), the debt collector does not have to send another letter that contains another 30-day notice.

 

1692g(a):

 

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing—

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Excellent.  Mega-bonus points to you, @BV80:-)

 


(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

 

From my reading of the FDCPA 809, the clock for the 30 days starts when the consumer receives the dunning letter in the mail.

 

However, many times this can happen to the consumer:

 

1.  The JDB mails the letter, within the 5 days, but the letter gets lost in the mail.

 

2.  The JDB mails the letter, within the 5 days, to the wrong address.

 

3.  The JDB never mails the letter, but claims to have mailed it anyways.

 

My understanding is the JDB does not need to prove the consumer received the letter, as long as the JDB maintained "procedures reasonably adapted to avoid any such error."

 

In the meantime, the JDB can claim the 30 days has expired, even though it cannot prove when the clock starts, it does not have to, so the consumer is out of luck.

 

Practically speaking, there is no value to a debt validation letter, unless the consumer receives that dunning letter in her postal mailbox, and then responds back with the debt validation letter.  Is that it?

 

No dunning letter, no debt validation letter.  Right?

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@Blue Squad

 


No dunning letter, no debt validation letter.  Right?

 

Correct.  BUT a DV request must be sent within the 30-day validation period after receiving their letter that contains the 30-day notice.  That notice should be contained in the first letter they send you.  If it's not, they'd have to send another letter within 5 days that does contain the notice. 

 

If you send a DV request without having received a dunning letter, the CA/JDB is not under any obligtation to respond.  They would be able to send you a collection letter without validating the debt.  But, if they were to do so, that first letter should then contain the 30-day notice, and you'd have to send another DV request.

 

Note that if you send a timely (within the 30 validation period), a CA can take as long as they want to answer.  They just can't make collection attempts until they validate.  Also, they don't have to validate at all if they choose to stop collection efforts.

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You're overlooking what is arguably the most important clause.

 

Within five days after the initial communication with a consumer in connection with the collection of any debt . . .

 

 

[c]ourts have routinely held that communications that are merely informational and do not demand payment cannot be considered communications "in connection with the collection of any debt" under the FDCPA. Derisme v. Hunt Leibert Jacobson PC, 880 F. Supp. 2d 339 (D. Conn. 2012).

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Let's say a consumer notices a delinquent account on her credit report for the very first time. There was no previous telephone call or postal mail about this particular account.

 

 

Personally, if it were me, I'd send them a "hey, I found you on my CRs...I never did business with you people...prove to me otherwise, or get off my reports...else I'll be forced to pursue my legal options." letter.  While that may not stop them from collecting, I do beleive they are required to mark the TL "in dispute" (No, I don't have a legal precedent...I think it was an FTC opinion letter).

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I just received a response to my DV request. 

The initially letter I received from Hunt & Henriques stated they were representing PRA. There is no mention of 30 days to dispute or validate, but I sent them the DV any ways. 

Their reply:

 

A review of the above -referenced account shows that the initial demand letter was sent to you on Feb 12, 2012, more than 1 year before receipt of your request for validation. The initial demand letter was not returned to this office by the USPS and made no request for validation during the statutorily mandated period. The request is untimely. 

 

As a courtesy, I have further reviewed PRA's record which revealed the following:

 

Name of the original creditor is GE Money, maintaining an address at xxxxxx UT, Account # XXXXXX was opened in the name of "My Name" with SS# ending in XXXX and DOB of XX/XX/XX. Our client's most recent address for "MY NAME" is XXXXXX, CA. The last payment was $50.00 on March 13, 2010 and the assigned balance is $2500.00

 

Enclosed: Account charge off Statement from July 2010. 

 

Having provided this information to you we will proceed with collection activity. 

 

They did not send a BOS nor a CC agreement. They sent the 1st page of a statement showing the charge off and balance at that time

 

My question: since they never mentioned the 30 days in the demand letter I initially received and I never received any other letters they claimed they sent, how should I proceed? 

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@Rookie

 

If the attorney is a debt collector, they should have included the 30-day notice.  In that letter, did they demand payment?  Or did they simply state that they were representing PRA?

 

In any case, they could claim that they sent you a letter with the 30-day notice.  It would be your word against theirs.

 

 

 

They did not send a BOS nor a CC agreement.

 

 

The above is not required to validate a debt.

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I just received a response to my DV request. 

 

They did not send a BOS nor a CC agreement. They sent the 1st page of a statement showing the charge off and balance at that time

 

Okay so they did validate.  The standard for validation is so low you can trip over it.  There is absolutely NO requirement to send a BOS or the CC agreement as part of validation.  Validation is not the same standard as what is required in a court of law.  

 

My question: since they never mentioned the 30 days in the demand letter I initially received and I never received any other letters they claimed they sent, how should I proceed? 

 

If it is the second letter they don't have to mention it.  They don't have to prove you received the letters only that they sent them.  You can rest assured PRA will produce a copy of a letter with your name and address on it dated at regular intervals.  

 

H&H are prolific filers of lawsuits given the age of this debt I would be gearing up to defend myself in a lawsuit because one is very likely coming your way.

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I have a tiny question, I got my first dunning letter from enhanced recovery from florida(JDB) for a cell phone bill. And I did responded within 30 days, they then send me like two billing statements from my cell provider, one for $247 and the other for $318 total charged off. It also states in their second letter that I have 30 days to dispute this if not they are going to assume that this is my debt. Here's where am a bit confused their's a discrepancy with the amount, the JDB is asking for $393 but the billing statements they send me shows the amt charged off is $318, can the JDB add on more charges??. Also they haven't send me any documents proving that they have the right to collect on this debt or that they actually own this debt. Can I send them another DV asking them to prove that they are the owners of this debt, also can i ask them to show me a detailed billing statements showing the whole charges? or is there no recourse for me. I still have like another two weeks to dispute again. Also they started reporting on my credit report since may but only recently send me the first dunning notice, nearly 6 moths later.

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I have a few questions here.  We found two debts on my girlfriends Credit Report that she could not identify.  We initiated a dispute with the CRA that she was unaware of the debts.  Both were returned verified so we called both debt collectors and requested an initial notice.  Her address was wrong on her Credit Report and they had been sending mail to an address she has never lived at.  Both stated to us that we verified this debt and that she owes the money over the phone.  So, we stated we have never received written notice of this debt, are unaware of the debt, and requested a written Notice so that we may move forward with debt validation.  We also gave both debt collectors her correct address to send the paperwork to.  The first person simply mailed us validation of the debt, and we are taking care of it, the 2nd debt collector never mailed us anything. 

 

We already called back a 2nd time, 2 weeks later, to re-request the Notice be sent to us (which we still haven't received, now 3 weeks later).  At what point does this become an FDCPA violation or are they not required to send anything to us at all?  So to simplify my questions, when are they required to send a Written Notice of the Debt?  

 

Another question, what if the debt collector reporting it to the CRA is not the debt collector that controls the debt?  We called another debt collector that showed up on her Credit Report over a $70 Verizon bill which we wanted to dispute because we believe it's just a billing error as the account was closed with a balance of $0 and my guess is they billed her for another month after it was closed.  However, they keep sending us to another debt collector that they state owns the account despite the fact that they are the ones reporting it to the CRA.  How does that even work?  They've been forcing us to jump through hoops just to get to the "right company" and after 4 calls we still don't have any information at all from them.  It's just a giant call center and everytime we get transferred we typically get put on hold for 15-20 minutes and the call gets dropped.  I just feel it's absolutely ridiculous to force people to jump through hoops to get information on a debt they are reporting to the CRA and who is responsible for complying with the FDCPA?  The debt collector reporting it to the CRA, or the debt collector that supposedly owns it. 

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@graym

 

We already called back a 2nd time, 2 weeks later, to re-request the Notice be sent to us (which we still haven't received, now 3 weeks later).  At what point does this become an FDCPA violation or are they not required to send anything to us at all?  So to simplify my questions, when are they required to send a Written Notice of the Debt?

 

 

You're referring to 1692g of the FDCPA.  A consumer cannot initiate an initial communication.   It must come from the debt collector.  The CA does not have to respond to your request.

 

In regard to the Verizon debt, is Verizon reporting?  Who exactly is reporting the debt?  Does the entry show that the account has been sold or transferred?

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@graym

 

 

You're referring to 1692g of the FDCPA.  A consumer cannot initiate an initial communication.   It must come from the debt collector.  The CA does not have to respond to your request.

 

In regard to the Verizon debt, is Verizon reporting?  Who exactly is reporting the debt?  Does the entry show that the account has been sold or transferred?

 

It's being reported by a company called Pinnacle Credit Services.  However, calling them gets you no where because they state that it is being handled (contracted out?) by another company called Retrieval Masters.  They stated they have absolutely no information on the debt to provide to me when I call.  It looks to me like Pinnacle tries to act like it is an original creditor, and contracts out the debts it purchases to various local collection agencies.  I'm just curious as to the legality of this setup.  If Pinnacle Credit Services is the company reporting it to the CRA, how can they possibly be reporting it without any information whatsoever as to the validity of the debt themselves that they have to send people to another debt collector to attempt to get information.  Calling Retrieval Masters gets you on endless holds as well.  It reminds me of calling Comcast Customer Service, be prepared to wait a really long time.  Really, is it fair to force consumers to have to go to a second debt collector, and then force them to wait for obscene amounts of time just to get simple information regarding the supposed debt in the first place? 

 

Secondly, as far as a consumer not being able to initiate an initial communication (the other debt), how can we obtain information if they refuse to provide anything at all?  If they report a debt to the CRA, this debt is disputed with the CRA, and they "verify" the debt to the CRA, at some point in this process shouldn't they be required to send a notice of the debt to the consumer?  Especially if the consumer calls in and requests it?  We clearly don't know what the debt is if we disputed it with the CRA stating as such.  The company can't even provide the most basic of information when we call in, yet they somehow "verified" the debt to the CRA.  That doesn't make any sense to me. 

 

We feel both of these debts are completely bogus yet it seems like it's going to be a gigantic battle to make any progress at all in getting these off her credit report.  I also must respectfully disagree that putting a debt on a Credit Report is merely informational and not an attempt to collect a debt.  The sole purposed of the debt collector listing the debt is as a tool used to collect the debt itself by harming the credit of the consumer and forcing them to create contact, especially if they have trouble finding the consumer.  I understand that some courts might have ruled that way, but I highly doubt that's a consistent ruling across the country because with all due respect to the Judges, that ruling makes no sense.  A third party debt collector reporting a debt to the Collection Agency should result in triggering the required notice to the consumer, and that's my opinion. 

 

I looked up Blair v. Bank of America as well.  The consumer never had direct communication with the debt collector in that particular case.  The consumer called the debt collector, and left a voicemail for the debt collector and argued before the court that the voicemail he left triggered the 5 day requirement to send notification of the debt.  Considering those facts, I would agree with the courts conclusion considering the debt collector never directly spoke with the consumer.  However, I don't think all courts would agree or follow the ruling that any call initiated by the consumer would not trigger the 5 day rule as it clearly should depend on what occurs during the phone call itself.  If I call a debt collector, and they tell me I owe such and such and demand immediate payment, that should constitute a triggering of the initial communication clause because they used the phone call, even though I initiated it, as an attempt on their end to collect the debt.

 

Campbell v. Credit Bureau Sys., Inc., 655 F.Supp.2d 732, 741-43 (E.D.Ky.2009)          deals with a consumer stating that his own certified letter to the debt collector constituted an initial communication under the FDCPA.  The other 2 cases didn't address this particular issue.  Spira v. Ashwood Fin., Inc., 358 F.Supp.2d 150, 158 (E.D.N.Y.2005)    involves the language in the letter itself (the debt in that case was for $29.08).  Seriously.   Camacho v. Bridgeport Financial, Inc., 430 F.3d 1078     Addresses Attorney's fees under the FDCPA.

 

Miller v. Payco-Gen. Am. Credits, Inc., 943 F.2d 482, 483 (4th Cir.1991).  was disagreed by Jenkins v. Union Corp., N.D.Ill., March 30, 1998

 

Thomas v. Law Firm of Simpson & Cybak, 392 F.3d 914, 918 (7th Cir.2004) (en banc) is not valid case law. 

 

Of all these cases cited, most have some sort of negative treatment associated with them, and not a single case involves direct communication between the consumer and debt collector.  The only 2 that are even close involve the consumer leaving the debt collector a voicemail, and another where a consumer sent a certified letter.   Only one court actually addressed the issue itself, and I don't think most courts around the country would follow that ruling either.  As I said in my humble opinion, it should depend on the actual contents of the conversation as to whether or not a consumer's call to a debt collector can trigger the initial communication clause of the FDCPA and I'm fairly certain you can make that argument in court.  What it really means is we need more case law surrounding the FDCPA :-)

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@graym

 

Secondly, as far as a consumer not being able to initiate an initial communication (the other debt), how can we obtain information if they refuse to provide anything at all?

 

 

Debt validation is under the FDCPA 1692g.   The only effect it might have on your CR is if a CA or JDB sends you an initial communication and you dispute that debt before it's reported.  They are not supposed to be able to report it if you've requested validation before they've reported.  But that validation request cannot occur if they haven't sent you an initial communication.

 

Is there anything incorrect about what is being reported?

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@graym

 

 

Debt validation is under the FDCPA 1692g.   The only effect it might have on your CR is if a CA or JDB sends you an initial communication and you dispute that debt before it's reported.  They are not supposed to be able to report it if you've requested validation before they've reported.  But that validation request cannot occur if they haven't sent you an initial communication.

 

Is there anything incorrect about what is being reported?

 

Well that's the whole point right there.  She has absolutely no idea what one of the debts being reported is, and the 2nd debt is the Verizon one which is not correct.  After the account was closed with Verizon she paid the account to $0 so it should not be there at all.  So how can we obtain "validation" of these debts if they won't send initial communications, yet they are reporting these debts to the CRA's.  We feel both debts should be removed from her Credit Report as she doesn't owe them.

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@graym

 

If you disputed with the CRAs, you took the first step.  You then dispute with the furnishers.

 

If you disputed with the furnishers by requesting validation, I'd dispute with them again by referencing their entries on your CR.  If the furnishers refuse to cooperate, and their entries are incorrect, contact a consumer attorney.

 

http://www.naca.net

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