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Secured Card


shadokeeper
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@shadokeeper - she could send Midland a DV letter.  Did she already dispute it with the CRA's?  And I agree with the prior post - how could there be a debt when that card was secured with an initial deposit?

 

If the OP maxed out the card and then defaulted on the payments they will tack on late fees of $35-40 for 3 to 6 months.  That adds an additional $200-300 just in fees not to mention the 29% interest racking up too.  The balance balloons to about $600 when they charge it off and seize the deposit.  

 

The issue then is some of these "secured" cards are not opened with an amount equal to the credit line.  There are some secured cards opened for consumers with damaged but not bad credit where they give a $100 deposit and get a $200-300 credit limit.  Depending on how long the card is open there may have been credit line increases without an increased deposit as well.  If a default happens the deposit is no where near enough to cover the balance.  Then the balance is sold to a bottom feeder like Midland or Portfolio who tries to start tacking on interest on the FULL amount and collecting on the balance prior to the deposit being applied.

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Thank you all! 

Willingtocope: I agree with you! She stated that she opened the account with a $300.00 deposit yet it is at Midland. I did have her DV Midland and they sent back some generic letter saying that the debt was a valid debt they did not include anything that we asked for... So I sent a more heavily worded letter to them explaining that they needed to provide her proof that she owes the debt, and that they own it. 

Could she contact Crap1 and ask them why it a secured debt is being collected upon?

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I did have her DV Midland and they sent back some generic letter saying that the debt was a valid debt they did not include anything that we asked for... So I sent a more heavily worded letter to them explaining that they needed to provide her proof that she owes the debt, and that they own it. 

 

Did that letter include a list like this:

Please provide me with the following:

  • What the money you say I owe is for;
  • Explain and show me how you calculated what you say I owe;
  • Provide me with copies of any papers that show I agreed to pay what you say I owe;
  • Provide a verification or copy of any judgment if applicable;
  • Identify the original creditor;
  • Prove the Statute of Limitations has not expired on this account;
  • Show me that you are licensed to collect in my state; and
  • Provide me with your license numbers and Registered Agent.

If so then they legally can ignore both of you.  The standard for debt validation with the consumer is SO low you can trip over it.  They are not required to send anything more than the name/address of the original creditor (which you know is Cap1)  and the amount they allege she owes and that is IT.  

 

NOTHING in the law requires they send her proof they own the debt or that she owes it unless they sue her in court AND the court makes them comply with discovery or that standard of evidence.  In fact this section on this very site is 100% wrong but it remains up:

What does a debt collector need to provide as debt validation?

One of the following items is necessary for debt validation.

  • Proof that the collection company owns the debt/or has been assigned the debt. (Bob is legally entitled to collect this particular debt from you.) This is basic contract law. It is very difficult to get a judgment without a direct contract between collection agency and the original creditor.
  • A copy of a statement from the original creditor. If you really want to get sticky, you can pin them down on the amount of the debt by requiring complete payment history, starting with the original creditor. (How the heck did Bob calculate this debt? What fees/interest Bob has tacked on to this debt and how he determined these fees?) This requirement was established by the case Fields v. Wilber Law Firm, Donald L. Wilber and Kenneth Wilber, USCA-02-C-0072, 7th Circuit Court, Sept 2004..
  • Copy of the original signed loan agreement or credit card application. (Your contract with Joe establishing the debt between you.) However, account statements from the original can fulfill these requirements. 
  • A copy of a canceled check from you to the original creditor.  

NONE of that list is required for debt validation under the FDCPA.  The other issue is they are only required to cease collection activity until they validate AND you contacted them and requested it within 30 days of their initial dunning of you.  If it is outside the 30 days then it doesn't apply.

 

MOST if not all of the sample letters you find on the internet are riddled with errors and simply generate laughter at the agency because they know you cut and pasted it off the internet and do not necessarily know the law.  Midland is a professional at it.

 

Could she contact Crap1 and ask them why it a secured debt is being collected upon?

 

Capital One has sold the debt and therefore is no longer involved.  The best that can come of that is to get a final billing statement to find out how the balance owed was calculated and if the security deposit was applied to it.  If the debt was not 100% secured there is a balance to collect.  

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