Couchboss

Received a letter from Malen & Associates P.C.

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Hello, I received an acknowledgment of debt letter from Malen & Associates P.C regarding a 2017 unsecured loan from LendingClub Corp.  What’s weird is it says the client is Velocity Investments LLc and ive never heard of them. Should I ask them to validate this debt? I’m in NY. Thank you

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40 minutes ago, Couchboss said:

Hello, I received an acknowledgment of debt letter from Malen & Associates P.C regarding a 2017 unsecured loan from LendingClub Corp.  What’s weird is it says the client is Velocity Investments LLc and ive never heard of them. Should I ask them to validate this debt? I’m in NY. Thank you

Velocity Investments is a debt buyer.  That company purchased the debt from Lending Club.  As long as you’re still within the 30 day validation period, you can request validation.  Just state that you dispute the referenced debt and request validation.

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2 minutes ago, BV80 said:

Velocity Investments is a debt buyer.  That company purchased the debt from Lending Club.  As long as you’re still within the 30 day validation period, you can request validation.  Just state that you dispute the referenced debt and request validation.

And then what? Also, should I dispute it through a written letter to Malen & Associates or through a credit bureau? Thank you btw

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17 minutes ago, Couchboss said:

And then what? Also, should I dispute it through a written letter to Malen & Associates or through a credit bureau? Thank you btw

The validation request should be sent to Malen because that is the party that sent you the letter.

Is Velocity reporting on your credit report?

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Just now, BV80 said:

The validation request should be sent to Malen because that is the party that sent you the letter.

Is Velocity reporting on your credit report?

No, only the lending club. I’ve never heard of Velocity before today. 

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1 hour ago, Couchboss said:

No, only the lending club. I’ve never heard of Velocity before today. 

You could dispute Lending Club’s entry, but what would be the basis of your dispute?

You cannot dispute based upon Velocity because that company is not reporting.

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9 minutes ago, BV80 said:

You could dispute Lending Club’s entry, but what would be the basis of your dispute?

You cannot dispute based upon Velocity because that company is not reporting.

Ok then I’m confused. Should I even ask for debt validation from Malen & Association or wait to be served? I never signed an agreement with Velocity but yet they are pursuing me for another company’s debt.

The LendingClub is not pursuing so I have no reason to dispute them on my credit report. However, I have nothing on my report from Velocity yet they are about to sue me. 

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2 hours ago, Couchboss said:

Ok then I’m confused. Should I even ask for debt validation from Malen & Association or wait to be served? I never signed an agreement with Velocity but yet they are pursuing me for another company’s debt.

Courts have ruled that assignees “step into the shoes” of original creditors.   More than likely, your agreements with Lending Club says that the account can be assigned or sold.  As a result, you don’t have to sign an agreement with Velocity.  Lending Club would be allowed to sell the account to Velocity.   

As a result, Velocity would not be pursuing you “for another company’s debt.”   It would be pursuing you for the debt it owns via purchase of the debt.

2 hours ago, Couchboss said:

The LendingClub is not pursuing so I have no reason to dispute them on my credit report. However, I have nothing on my report from Velocity yet they are about to sue me. 

We don’t know for a fact that Velocity will sue.  They may, but we cannot predict the future.  Look into arbitration.

@fisthardcheese. What do you know about Lending Club?

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Do you have a copy of your borrower agreement?  If you don't, I'd recommend searching  you emails from around the time you took out the loan to see if they automatically emailed a copy to you.  You can also try to log into your account at lendingclub.com to access it there.

Here's the arbitration provision from a loan I had with Lending Club between WebBank and me.

 

 

21. Arbitration. RESOLUTION OF DISPUTES: YOU HAVE READ THIS PROVISION CAREFULLY AND UNDERSTAND THAT IT LIMITS YOUR RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU AND US. YOU UNDERSTAND THAT YOU HAVE THE RIGHT TO REJECT THIS PROVISION AS PROVIDED IN PARAGRAPH (b) BELOW. If you are a "Covered Borrower" as defined by the Military Lending Act (32 CFR §232, as amended from time to time) at the time of entering into this Agreement, this section 21 Arbitration is not applicable, and you do not need to opt out of or take any action to ensure inapplicability.

a. Either party to this Agreement, or any subsequent holder, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 21 (the "Arbitration Provision"), unless you opt out as provided in section 21(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you), on the one hand, and us and/or any subsequent holder (or persons claiming through or connected with us and/or the subsequent holders), on the other hand, relating to or arising out of this Agreement, any Loan Agreement and Promissory Note(s), the Site, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 21(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter‐claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.

b. You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt out notice to WebBank, c/o LendingClub Corporation, 71 Stevenson St., Suite 1000, San Francisco CA, 94105, Attention: Legal Department, which is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address, and social security number; and be signed by you. You may send an opt out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.

c. If a Claim arises, our goal is to learn about and address your concerns and, if we are unable to do so to your satisfaction, to provide you with a neutral and cost effective means of resolving the dispute quickly. You agree that before filing any claim in arbitration, you may submit Claims by sending an email to customeradvocacy@lendingclub.com at any time, or by calling (888) 596-3157 from Mon-Fri 6:00 AM to 5:00 PM PT and Sat 8:00 AM to 5:00 PM PT.

The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or Judicial Alternatives and Mediation Services ("JAMS"). The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. If you have any questions concerning the AAA or would like to obtain a copy of the AAA arbitration rules, you may call 1(800) 778-7879 or visit the AAA’s web site at: www.adr.org. If you have any questions concerning JAMS or would like to obtain a copy of the JAMS arbitration rules, you may call 1(800) 352-5267 or visit their web site at: www.jamsadr.com. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.

d. If we (or the subsequent holder) elect arbitration, we (or the subsequent holder, as the case may be) shall pay all the administrator’s filing costs and administrative fees (other than hearing fees). If you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator’s rules. We (or the subsequent holder, as the case may be) shall pay the administrator’s hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator’s rules or applicable law require otherwise, or you request that we (or the subsequent holder) pay them and we agree (or the subsequent holder agrees) to do so. Each party shall bear the expense of its own attorneys’ fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.

e. Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator’s rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.

f. We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify, or fail to enforce this section 21(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 21(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.

g. This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.

h. This Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties and/or LendingClub; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Loan Agreement or Promissory Note(s) or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 21(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative, or collective basis, and the limitations on such proceedings in section 21(f) are finally adjudicated pursuant to the last sentence of section 21(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.

THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE OR JURY, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.

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51 minutes ago, LaneBlane said:

Do you have a copy of your borrower agreement?  If you don't, I'd recommend searching  you emails from around the time you took out the loan to see if they automatically emailed a copy to you.  You can also try to log into your account at lendingclub.com to access it there.

Here's the arbitration provision from a loan I had with Lending Club between WebBank and me.

 

 

21. Arbitration. RESOLUTION OF DISPUTES: YOU HAVE READ THIS PROVISION CAREFULLY AND UNDERSTAND THAT IT LIMITS YOUR RIGHTS IN THE EVENT OF A DISPUTE BETWEEN YOU AND US. YOU UNDERSTAND THAT YOU HAVE THE RIGHT TO REJECT THIS PROVISION AS PROVIDED IN PARAGRAPH (b) BELOW. If you are a "Covered Borrower" as defined by the Military Lending Act (32 CFR §232, as amended from time to time) at the time of entering into this Agreement, this section 21 Arbitration is not applicable, and you do not need to opt out of or take any action to ensure inapplicability.

a. Either party to this Agreement, or any subsequent holder, may, at its sole election, require that the sole and exclusive forum and remedy for resolution of a Claim be final and binding arbitration pursuant to this section 21 (the "Arbitration Provision"), unless you opt out as provided in section 21(b) below. As used in this Arbitration Provision, "Claim" shall include any past, present, or future claim, dispute, or controversy involving you (or persons claiming through or connected with you), on the one hand, and us and/or any subsequent holder (or persons claiming through or connected with us and/or the subsequent holders), on the other hand, relating to or arising out of this Agreement, any Loan Agreement and Promissory Note(s), the Site, and/or the activities or relationships that involve, lead to, or result from any of the foregoing, including (except to the extent provided otherwise in the last sentence of section 21(f) below) the validity or enforceability of this Arbitration Provision, any part thereof, or the entire Agreement. Claims are subject to arbitration regardless of whether they arise from contract; tort (intentional or otherwise); a constitution, statute, common law, or principles of equity; or otherwise. Claims include matters arising as initial claims, counter‐claims, cross-claims, third-party claims, or otherwise. The scope of this Arbitration Provision is to be given the broadest possible interpretation that is enforceable.

b. You may opt out of this Arbitration Provision for all purposes by sending an arbitration opt out notice to WebBank, c/o LendingClub Corporation, 71 Stevenson St., Suite 1000, San Francisco CA, 94105, Attention: Legal Department, which is received at the specified address within 30 days of the date of your electronic acceptance of the terms of this Agreement. The opt out notice must clearly state that you are rejecting arbitration; identify the Agreement to which it applies by date; provide your name, address, and social security number; and be signed by you. You may send an opt out notice in any manner you see fit as long as it is received at the specified address within the specified time. No other methods can be used to opt out of this Arbitration Provision. If the opt out notice is sent on your behalf by a third party, such third party must include evidence of his or her authority to submit the opt out notice on your behalf.

c. If a Claim arises, our goal is to learn about and address your concerns and, if we are unable to do so to your satisfaction, to provide you with a neutral and cost effective means of resolving the dispute quickly. You agree that before filing any claim in arbitration, you may submit Claims by sending an email to customeradvocacy@lendingclub.com at any time, or by calling (888) 596-3157 from Mon-Fri 6:00 AM to 5:00 PM PT and Sat 8:00 AM to 5:00 PM PT.

The party initiating arbitration shall do so with the American Arbitration Association (the "AAA") or Judicial Alternatives and Mediation Services ("JAMS"). The arbitration shall be conducted according to, and the location of the arbitration shall be determined in accordance with, the rules and policies of the administrator selected, except to the extent the rules conflict with this Arbitration Provision or any countervailing law. If you have any questions concerning the AAA or would like to obtain a copy of the AAA arbitration rules, you may call 1(800) 778-7879 or visit the AAA’s web site at: www.adr.org. If you have any questions concerning JAMS or would like to obtain a copy of the JAMS arbitration rules, you may call 1(800) 352-5267 or visit their web site at: www.jamsadr.com. In the case of a conflict between the rules and policies of the administrator and this Arbitration Provision, this Arbitration Provision shall control, subject to countervailing law, unless all parties to the arbitration consent to have the rules and policies of the administrator apply.

d. If we (or the subsequent holder) elect arbitration, we (or the subsequent holder, as the case may be) shall pay all the administrator’s filing costs and administrative fees (other than hearing fees). If you elect arbitration, filing costs and administrative fees (other than hearing fees) shall be paid in accordance with the rules of the administrator selected, or in accordance with countervailing law if contrary to the administrator’s rules. We (or the subsequent holder, as the case may be) shall pay the administrator’s hearing fees for one full day of arbitration hearings. Fees for hearings that exceed one day will be paid by the party requesting the hearing, unless the administrator’s rules or applicable law require otherwise, or you request that we (or the subsequent holder) pay them and we agree (or the subsequent holder agrees) to do so. Each party shall bear the expense of its own attorneys’ fees, except as otherwise provided by law. If a statute gives you the right to recover any of these fees, these statutory rights shall apply in the arbitration notwithstanding anything to the contrary herein.

e. Within 30 days of a final award by the arbitrator, any party may appeal the award for reconsideration by a three-arbitrator panel selected according to the rules of the arbitrator administrator. In the event of such an appeal, any opposing party may cross-appeal within 30 days after notice of the appeal. The panel will reconsider de novo all aspects of the initial award that are appealed. Costs and conduct of any appeal shall be governed by this Arbitration Provision and the administrator’s rules, in the same way as the initial arbitration proceeding. Any award by the individual arbitrator that is not subject to appeal, and any panel award on appeal, shall be final and binding, except for any appeal right under the Federal Arbitration Act ("FAA"), and may be entered as a judgment in any court of competent jurisdiction.

f. We agree not to invoke our right to arbitrate an individual Claim you may bring in Small Claims Court or an equivalent court, if any, so long as the Claim is pending only in that court. NO ARBITRATION SHALL PROCEED ON A CLASS, REPRESENTATIVE, OR COLLECTIVE BASIS (INCLUDING AS PRIVATE ATTORNEY GENERAL ON BEHALF OF OTHERS), EVEN IF THE CLAIM OR CLAIMS THAT ARE THE SUBJECT OF THE ARBITRATION HAD PREVIOUSLY BEEN ASSERTED (OR COULD HAVE BEEN ASSERTED) IN A COURT AS CLASS REPRESENTATIVE, OR COLLECTIVE ACTIONS IN A COURT. Unless consented to in writing by all parties to the arbitration, no party to the arbitration may join, consolidate, or otherwise bring claims for or on behalf of two or more individuals or unrelated corporate entities in the same arbitration unless those persons are parties to a single transaction. Unless consented to in writing by all parties to the arbitration, an award in arbitration shall determine the rights and obligations of the named parties only, and only with respect to the claims in arbitration, and shall not (a) determine the rights, obligations, or interests of anyone other than a named party, or resolve any Claim of anyone other than a named party; nor (b) make an award for the benefit of, or against, anyone other than a named party. No administrator or arbitrator shall have the power or authority to waive, modify, or fail to enforce this section 21(f), and any attempt to do so, whether by rule, policy, arbitration decision or otherwise, shall be invalid and unenforceable. Any challenge to the validity of this section 21(f) shall be determined exclusively by a court and not by the administrator or any arbitrator.

g. This Arbitration Provision is made pursuant to a transaction involving interstate commerce and shall be governed by and enforceable under the FAA. The arbitrator will apply substantive law consistent with the FAA and applicable statutes of limitations. The arbitrator may award damages or other types of relief permitted by applicable substantive law, subject to the limitations set forth in this Arbitration Provision. The arbitrator will not be bound by judicial rules of procedure and evidence that would apply in a court. The arbitrator shall take steps to reasonably protect confidential information.

h. This Arbitration Provision shall survive (i) suspension, termination, revocation, closure, or amendments to this Agreement and the relationship of the parties and/or LendingClub; (ii) the bankruptcy or insolvency of any party or other person; and (iii) any transfer of any loan or Loan Agreement or Promissory Note(s) or any other promissory note(s) which you owe, or any amounts owed on such loans or notes, to any other person or entity. If any portion of this Arbitration Provision other than section 21(f) is deemed invalid or unenforceable, the remaining portions of this Arbitration Provision shall nevertheless remain valid and in force. If an arbitration is brought on a class, representative, or collective basis, and the limitations on such proceedings in section 21(f) are finally adjudicated pursuant to the last sentence of section 21(f) to be unenforceable, then no arbitration shall be had. In no event shall any invalidation be deemed to authorize an arbitrator to determine Claims or make awards beyond those authorized in this Arbitration Provision.

THE PARTIES ACKNOWLEDGE THAT THEY HAVE A RIGHT TO LITIGATE CLAIMS THROUGH A COURT BEFORE A JUDGE OR JURY, BUT WILL NOT HAVE THAT RIGHT IF ANY PARTY ELECTS ARBITRATION PURSUANT TO THIS ARBITRATION PROVISION. THE PARTIES HEREBY KNOWINGLY AND VOLUNTARILY WAIVE THEIR RIGHTS TO LITIGATE SUCH CLAIMS IN A COURT BEFORE A JUDGE OR JURY UPON ELECTION OF ARBITRATION BY ANY PARTY.

I read this entire article. I didn’t see anything about a 3rd party potentially taking legal action against me due to a debt owed to lending club. It’s kinda stressful because I’ve never had a debt collector contact me through a lawyer before. I’m not familiar with how this goes. 

 

Thats why I was wondering if I should proceed with debt validation to the law firm issuing the 30 day notice or wait to see what they do. Thank you guys tremendously for the help. 

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27 minutes ago, Couchboss said:

I read this entire article. I didn’t see anything about a 3rd party potentially taking legal action against me due to a debt owed to lending club.

It is the same answer as the one @BV80 gave you.  It is basic contract law.  Lending Club has the legal right to sell their interest in your loan.  The third party (in this instance Velocity) buys all the rights and responsibilities that Lending Club had as the original creditor. The agreement does not have to spell out that a third party can potentially take legal action.  They have all the rights Lending Club had as the current owner of the debt.  Those rights include using a lawsuit to collect.

29 minutes ago, Couchboss said:

Thats why I was wondering if I should proceed with debt validation to the law firm issuing the 30 day notice or wait to see what they do.

You have nothing to lose by sending the law firm a DV letter.

1 hour ago, BV80 said:

What do you know about Lending Club?

Lending Club does not pursue its own defaulted accounts in court.  They sell to Velocity right after charge off.  There is a well worded arbitration clause in their loans and to date I think there are 2 threads on here from people who were sued by Velocity and they folded with an approved MTC arbitration.

1 hour ago, BV80 said:

We don’t know for a fact that Velocity will sue.

They will sue.  

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50 minutes ago, Couchboss said:

I read this entire article. I didn’t see anything about a 3rd party potentially taking legal action against me due to a debt owed to lending club. It’s kinda stressful because I’ve never had a debt collector contact me through a lawyer before. I’m not familiar with how this goes

You read the arbitration provision.   Read the rest of the agreement and look for the term “assign” and/or “assignment”.  

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Here's what's in my agreement:

13. Assignment; Registration of Note Owners, Termination. We may assign this Agreement and the Loan Agreement and Promissory Note, or any of our rights under this Agreement or the Loan Agreement and Promissory Note, in whole or in part at any time. You further understand, acknowledge and agree that LendingClub or another third party may further sell, assign or transfer your Loan Agreement and Promissory Note and all associated documents and information related to the and the Loan Agreement and Promissory Note without your consent or notice to you (subject to the registration requirement below). You may not assign, transfer, sublicense or otherwise delegate your rights or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this section 13 shall be null and void.

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34 minutes ago, LaneBlane said:

Here's what's in my agreement:

13. Assignment; Registration of Note Owners, Termination. We may assign this Agreement and the Loan Agreement and Promissory Note, or any of our rights under this Agreement or the Loan Agreement and Promissory Note, in whole or in part at any time. You further understand, acknowledge and agree that LendingClub or another third party may further sell, assign or transfer your Loan Agreement and Promissory Note and all associated documents and information related to the and the Loan Agreement and Promissory Note without your consent or notice to you (subject to the registration requirement below). You may not assign, transfer, sublicense or otherwise delegate your rights or obligations under this Agreement to another person without our prior written consent. Any such assignment, transfer, sublicense or delegation in violation of this section 13 shall be null and void.

Thank you!

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8 hours ago, Couchboss said:

I read this entire article. I didn’t see anything about a 3rd party potentially taking legal action against me due to a debt owed to lending club. It’s kinda stressful because I’ve never had a debt collector contact me through a lawyer before. I’m not familiar with how this goes. 

This is a very common action.  Banks and Lenders can and will sell accounts all the time.  Once your account went into default, Lending Club did not want it on their books any more, so they sold it to Velocity.  Velocity is now the owner of your account and NOT Lending Bank.  The Lending Bank contract and paperwork all have now transferred over to Velocity, and Velocity will probably sue in the next few months to collect what they claim you owe on the account.   The best way to beat them if they sue is by using the arbitration clause in the Lending Club contract, which was posted for you above.

The link in my signature below explain how and why using arbitration when you are sued is the best way to beat them and get them to drop the lawsuit and agree to walk away for $0.

What is the aprox amount Velocity claim you owe?

Sending a simple, short letter stating that you dispute the alleged debt and ask for validation is not a bad idea.  All it really does is stall for a bit, and gives them one small hoop they have to jump through before they can sue you, but it won't stop them.

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20 minutes ago, fisthardcheese said:

This is a very common action.  Banks and Lenders can and will sell accounts all the time.  Once your account went into default, Lending Club did not want it on their books any more, so they sold it to Velocity.  Velocity is now the owner of your account and NOT Lending Bank.  The Lending Bank contract and paperwork all have now transferred over to Velocity, and Velocity will probably sue in the next few months to collect what they claim you owe on the account.   The best way to beat them if they sue is by using the arbitration clause in the Lending Club contract, which was posted for you above.

The link in my signature below explain how and why using arbitration when you are sued is the best way to beat them and get them to drop the lawsuit and agree to walk away for $0.

What is the aprox amount Velocity claim you owe?

Sending a simple, short letter stating that you dispute the alleged debt and ask for validation is not a bad idea.  All it really does is stall for a bit, and gives them one small hoop they have to jump through before they can sue you, but it won't stop them.

I owe $4,857.06. So do I need to hire a lawyer for arbitration or is that something I can do alone when we proceed to court? You guys are amazing btw. Thank you so much

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One more thing, once I either get an answer or not regarding the debt validation, should I try to settle? Also, do they usually want all the money up front or is a payment plan possible?

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15 hours ago, fisthardcheese said:

The best way to beat them if they sue is by using the arbitration clause in the Lending Club contract, which was posted for you above.

This arbitration clause was taken from a loan I had with Lending Club. Couchboss needs to obtain a copy of the agreement for their own account to verify the terms of the arbitration agreement.

I looked through the list of JAMS consumer arbitration cases and found two for Velocity Investments LLC.  Both were settled in 2017.  The consumer in both cases was represented by an attorney.  One claim was for $4,400 and the other didn't specify.  There were no consumer arbitration cases involving Velocity Investments with AAA.

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7 minutes ago, usctrojanalum said:

The fact that velocity may go into arbitration is a little concerning.  

I don't know if the settlements were reached before the arbitrator's retainer fee was paid, or if they simply occurred after JAMS' filing fee was paid.

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11 hours ago, Couchboss said:
 

Well I sent the verification letter today from a pallet I found on this website. Thanks for all you guys help. 

I hope it wasn't any longer than a sentence or two. There are terrible ones on this site that should never be followed.

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59 minutes ago, usctrojanalum said:

What proof?

The lack of any Velocity awards or cases in the JAMS consumer case database

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