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Table of Contents Introduction ...................................................................................................................... 3

Way No.1 - There is No Need to Communicate with Debt Collectors over the Telephone. ....................................................................................................................... 3

You have the right to dispute and deny a debt. ............................................................ 4 Way No.2 - Debt Validation Letters .................................................................................. 5

To get the most out of the debt validation process; ...................................................... 6 In reality this is much more than a debt validation letter. .............................................. 7 Follow-up to Debt Validation Letter ............................................................................. 18 Letters for Different Collection Situations ................................................................... 20 The Different Sources of Debt Collection ................................................................... 20

2a. Calls and letters from the original creditor, the credit card bank. ...................... 20

2b. Collection Efforts by a Collection Agency after a Debt Charges off But before It Is Sold to a Junk Debt Buyer ................................................................................... 20

2c. Collection Efforts by a Collection Attorney after a Debt Charges Off, but before It Is Sold to a Junk Debt Buyer ................................................................................... 21 2d. An Initial Communication from a JDB (junk debt buyer) .................................... 21 2e. Collection Efforts by a Collection Attorney for a JDB ........................................ 22 2f. Collection Efforts by a Collection Agency for a JDB ........................................... 22

Way No.3 - Collection Agency Practices ....................................................................... 23 In Spears vs. Brennan the appeals court determined: ................................................ 23

Way No.4 - Best Practices for Dealing with Debt Collectors .......................................... 26 Way No.5 – Helpful Links To Other Sites ...................................................................... 29

Link to full FDCPA ...................................................................................................... 29 Debt Forum Links ....................................................................................................... 31

This content is not intended as a substitute for legal advice.

If you need an attorney in your local area, please contact a licensed consumer rights attorney in your state.


Introduction

Debt collectors are powerless. They only have the power to scare you over the telephone.

You can stop their telephone calls and get them off of your credit report with the proper letter, as I will show you in this section.

This breakdown of information is for you to understand the different ways debt collectors, junk debt buyers and collection attorneys can come at you and why the legal letter writing I show you how to do will work in each situation.

Way No.1 - There is No Need to Communicate with Debt Collectors over the Telephone.

Debt collectors rely on your guilt about your debt and your inherent honesty to do their job FOR them. On the phone they know exactly what to say to push your buttons and get you to admit you owe your debt. Their collection psychology is to play on the guilt and fears of responsible debtors. Your collection psychology should be, “Be Difficult to Deal with!”

The best thing to do is not to answer the phone when a collector calls, or hang up when they identify themselves. There is no need for telephone communications with anyone collecting a debt. There is no legal substance to these telephone communications. To pursue you legally, they must notice you in writing. You do not have to talk to debt collectors. And, you shouldn’t because they will lie and say anything to scare you. If curiosity gets the better of you, go ahead, answer the phone, then immediately get the name, location and number of the collection firm calling. Next, tell them you do not discuss your personal financial affairs over the telephone with someone you do not know and tell them to communicate with you in writing. Then, hang up the phone.


You have the right to dispute and deny a debt.

The distinction you need to make for yourself is that you are not personally denying the debt. Yes, it is yours. But, legally, you have the right to dispute it and deny it until someone can prove in a court of law with all the relevant documents that it is your debt. Frequently, this proof requires a signed contract. For credit cards, there is no signed contract. Nameless, unsigned, frequently wrongly-dated or undated contracts of adhesion are the standard consumer credit card agreement for credit card banks. They need to get you to admit to the debt, so they can “re-contract” with you and not have you denying and disputing the debt.

Collection agency collectors welcome fresh “meat,” that is new batches of debtors. The best time to catch a debtor off guard and the hardest time for him or her to deny and dispute the debt is on the first “ambush” call. This call usually happens before you receive your mini-Miranda notice from this new collection agency telling you of your right to dispute the debt. The ambush call usually starts with the big lie, “I am calling to let you know that your court summons for [this debt] is going in the mail in a few days. This is your last chance to pay the debt or set up a payment plan with us.” Now they’ve got you scared. And, NOW they get you to admit to the debt and to share personal information, your SSI number, maybe even your bank account number so they can quickly receive a partial payment from you to make the phony lawsuit go away.

This approach has frightened all of us who have experienced it. You have to remain strong. You have to deny and dispute. After all, this is just a voice on the other end of the line, who could be anyone. They have no legal standing with you. Your personal finances are none of their business. You have NOT received a mini-Miranda notice from their firm. If some new debt collector calls you, tell them they are just an unknown voice on the other end of the line and that you do not discuss your personal finances with unknown strangers. Then, hang up the phone. Do not give them any information.


Way No.2 - Debt Validation Letters

The debt validation letter is the strongest weapon you have against debt collectors, if you use it properly.

Fair Debt Collection Practices Act, Section 809(b), Validation of Debts

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor . . .

The Fair Debt Collection Practices Act’s Validation of Debts applies to communications from all entities trying to collect a debt including collection agencies, collection attorneys and junk debt buyers. Before the Consumer Finance Protection Bureau was taken over by the Trump administration it was attempting to include original creditors like credit card banks as debt collectors subject to the FDCPA. Some states like Massachusetts and California do consider credit card banks debt collectors. But regardless of their FDCPA status as debt collectors, you should send the credit card bank the letter below denying and disputing the debt and asking for a full GAAP accounting with a supporting affidavit. This creates a written record of dispute that could make it harder for a collection attorney to successfully sue you in court for the debt.

The Federal Trade Commission has interpreted the FDCPA Validation of Debts section to mean debt collectors must provide some proof from the original creditor as to the identity of the consumer and the amount allegedly owed. Here is a letter from an FTC attorney stating that. https://www.creditinfocenter.com/community/topic/210490-lefevre-wollman-opinion-letter/

Most debt collectors stop communicating with a consumer after they receive a debt validation letter (DV) from that alleged debtor. If they do not validate, then they cannot legally communicate with you. They also cannot put a negative listing on your credit report. To validate they must go to the original creditor, the credit card bank; who because of its computerized recordkeeping has trouble accounting for all


the entries that make up the current amount of a credit card debt; who, by practice, has no signed contract with the consumer’s name on it; and who does not want to be bothered fulfilling individual document requests from a debt collector.

To get the most out of the debt validation process;

1) Always send debt validation letters CMRRR. 2) Always reply to the first mini-Miranda from a new collector or junk debt

buyer within 30 days of your receipt of it. 3) Always file the mini-Miranda and the DV response to maintain good records

of your contacts with debt collectors. 4) Always check your state’s database of licensed debt collectors. If a collector is

not on it, point out their violation in your DV letter. 5) Always reply with another DV letter to any attempt to validate the debt

stating that that attempt is insufficient. (See the sample follow-up letter below.)

6) Be sure to tell the collector their claim is denied and disputed and to cease all

collection activities including putting negative listings on your credit reports.

7) Demand a lot of information in your DV letter (see letter below). Another goal of debt validation is to see what the collector has for documentation on your debt.

8) Always demand complete documentation; your contract with them and a full

accounting of all the payments, charges, interest and penalties that go into the total alleged amount owed, a sworn affidavit supporting that documentation, as well as proof of ownership of the debt if it is a junk debt buyer coming after you.

What follows is a letter I have used to great success. I have used red ink to explain why each component in the letter is important. It is important for me to note that early on I “repelled’ a collection law firm for an original creditor of a charged off credit card debt over $20,000 with only the debt validation part of this letter. This letter worked without the state collection statute


reference, or the state licensing and UDAP (unfair and deceptive acts and practices) laws. The two-page validation and disclosure statement below was part of my letter to that collection law firm.

In reality this is much more than a debt validation letter.

While intended for both debt collectors and collection attorneys, this letter is a carefully crafted message to make collection attorneys (and their paralegals/legal assistants) think twice about bothering to sue you for the credit card debt at issue. It disputes their claim on you and demands documentation for all the things credit card companies have difficulty documenting in credit card lawsuits. It says to the attorney, “if you make the mistake of suing me, you will have to go to the time and trouble of getting this original documentation.” Over 90 percent of credit card lawsuits end up with default judgments for the creditor and collection attorney. Collection attorneys only get paid if they collect money from you. Why should one go to the extra trouble of actually litigating against you, when his/her paralegals can send summons to, file for default judgments against the other 90 percent of consumers they have been assigned by a creditor, and then initiate collection with the court’s help.


August 12, 20XX

CMRR – 7005 1820 0004 1693 5177

[Substitute the red parts with your particular information]

[This is the absolute proof positive that you sent the letter certified mail return receipt requested. This 20 digit number comes off the receipt filled out and mailed by you that gets signed upon delivery. Otherwise, a collection agency or collection attorney could say that the receipt was for something else you sent them, and not the DV letter.]

Collection Agency, Junk Debt Buyer or Collection Law Firm Name Street Address City, State Zip Code

Re: Acct. # 212990

[You should include this to be sure they record your DV letter properly. This is the debt collector’s account number for your credit card debt. Usually it is not the same number as the credit card account number. To avoid subtly admitting to the debt, you do not want to use the credit card number, if they do not use it in their communication to you.]

To Whom It May Concern,

Please note my correct address at the head and foot of this letter.

[If you have changed your address and the mini-Miranda was forwarded from your old address, you want to make sure you are on record informing them of your correct address. Otherwise they COULD eventually serve you a summons at your old address, which you would not receive. Then they could pursue a default judgment against you without your knowledge.]

This letter is being sent to you in response to your letter received July 30, 20XX.

This is a notice that your claim is denied and disputed.

Under the Fair Debt Collections Practices Act (FDCPA), I have the right to request validation of the debt you say I owe.


I am requesting proof that:

1) I am indeed the party you are asking to pay this debt;

2) you possess original creditor documentation/business records with a full

accounting using Generally Accepted Accounting Principles (charges,

payments, interest, etc.) of the amount of this debt that can be presented as

evidence. Also explain and show me how you calculated what you say I owe;

3) your claim is legally supported by a sworn affidavit from someone with

personal knowledge of these business records;

4) there is some valid contractual obligation which is binding on me to pay this

debt, and

5) you, as a debt collection agency [or collection law firm or junk debt buyer],

produce documentation from the alleged [Always use the word alleged when

referring to the debtor, creditor or the debt.] creditor authorizing you to contact

me and pursue the collection of an alleged debt.

[If it is a JDB or a collector for a JDB, that you or your client has ownership of

this debt.]

Complete the attached Creditor/Collector Disclosure and Validation statement and return it to me at the address indicated.

[These five points are to illustrate you are aware of your rights and know what to demand for documentation to dissuade them from pursuing you in court or an arbitration forum.]

Your legal staff will agree that compliance with this request is required under the laws of [your state] and Federal Statutes.

Also be advised that this letter is not only a formal dispute, but a request that you stop any and all collection activities pursuant to the Fair Debt Collection Practices Act.


[This is very important to include. After CMRRR receipt of this they will be in violation of the FDCPA if they contact you again except to validate. Each contact will make them liable for a $1000 penalty award under the FDCPA. So they either pursue you in court or, more wisely, play the numbers game with other less well-prepared alleged debtors.]

[Search your state’s debt collection laws. They may have something like this.]

I also expect you to provide a complete ledger and accounting of debits and credits per GAAP principles for my inspection as required by Commonwealth of Massachusetts regulations 940 CMR 7.08--

940 CMR 7.00: Debt Collection Regulations; 7.08: Inspection

• It shall constitute an unfair or deceptive act or practice for a creditor to fail to allow a debtor or an attorney for a debtor to inspect and copy the following materials regarding a debt during normal business hours of the creditor and upon notice given to such creditor not less than five business days preceding the scheduled inspection: 1) All papers or copies of papers in the possession of the creditor which bear

the signature of the debtor and which concern the debt being collected; 2) A ledger, account card, or similar record in the possession of a creditor

which reflects the date and amount of payments, credits, and charges concerning the debt.

Consider this document notice that I am exercising my right to inspect all the papers and records itemized in (1) and (2) above.

Please write me at your earliest convenience to confirm my review of these alleged records. I want to inspect these alleged records the last week of September 200X within my respective court district in eastern Massachusetts. Consider this notice given not less than five days preceding my scheduled inspection of said records.

[You need to check your state’s debt collection laws to find out if there is a gem like this in them. If not, discard this language. Everything else here is strong enough to leave a lasting, comparative impression with the debt collector. If you are not in Massachusetts, and you use this, it makes you look foolish, and it can defeat the purpose of this letter.]


Please also be aware that if any negative mark is found on my credit reports from your company or any company that you represent, this will result in my immediate filing of a lawsuit against you and your client for:

1) Violation of the Fair Credit Reporting Act,

2) Violation of the Fair Debt Collection Practices Act,

3) Defamation of Character,

4) Negligent Enablement of Identity Fraud.

[You are noticing them that you understand under the FDCPA the collection activities you have asked them to stop include putting a negative listing for the debt in question on your credit reports.]

You are instructed to take no action that could be detrimental to any of my credit reports.

In addition, [your state’s Office of Business Regulation] has no record of your firm being licensed in [your state] as a debt collector. As you know, there are penalties for fraudulent collection activities. I am in possession of documents from you addressed to me in [your state] clearly marked “this is an attempt to collect a debt,” which are evidence of your fraudulent activities.

[In my experience 50 percent of the debt collectors who contacted me were out of state and not licensed to collect debts in my state (More than 50% were out of state, but some were licensed in my state.). My state’s Secretary of State’s government web site has a list of debt collectors licensed by the state. You should check your state’s licensing policy for debt collectors and for where to find the list of licensed debt collectors. Omit thi,s if they are in fact licensed to collect debts in your state.]

You are guilty of unfair and deceptive practices under Massachusetts law. This is notice to you to cease and desist from those practices. You are injuring me by causing me to respond to these bogus collection attempts. I have grounds for relief under Chapter 93A of the General Laws of Massachusetts.

[In my state Chapter 93A is the UDAP (unfair and deceptive acts and practices) statute.]


[To pursue a debt collector in civil court for UDAP violations, you must first notice them to cease and desist, CMRRR of course. Then if they persist, you can sue them.]

I suggest you get your records in order before I have to proceed with legal action.

Signed, your name and address

[Many warn about actually signing a written communication to a debt collector for fear they might forge your name on a document that furthers their collection goal. On my DV letters I used a few pen strokes that had no resemblance to my signature, so I could demonstrate that was not my signature.]


CREDITOR/COLLECTOR DISCLOSURE AND VALIDATION STATEMENT

(Return to your name and correct address.)

1) Original Creditor's Name:

_____________________________________________________________

2) Account Number(s):

_____________________________________________________________

3) Name and Address of Debtor:

_____________________________________________________________

4) Name and Address of Collector (assignee):

_____________________________________________________________

5) Provide a copy of the original creditor’s agreement that bears the signature of the alleged debtor wherein he agreed to pay the creditor.

6) Provide an accounting of charges to the account including late fees, others fees, etc. that substantiates how you got to the alleged debt total.

7) What are the terms of assignment for this account? What is the agreement with your client that grants you the authority to collect on this alleged debt, or provide proof of acquisition by purchase or assignment of this account. You may attach a facsimile of any records relating to such terms.

8) Have any insurance claims been made by any creditor or assignee regarding this account? Yes / No

9) Has the purported balanced of this account been used in any tax deduction claim? Yes / No


10) Balance of Account_______________________________________________________

11) Date you acquired this debt: _______________________

12)This Debt was: assigned ___purchased___

14) Provide all documents that support ownership of this alleged debt.

13) Please indicated any credit bureaus to which you have reported on this account:

Experian ______

Equifax ______

TransUnion _____

Upon failure or refusal of collector to validate this collection action, collector agrees to waive all claims against the alleged debtor named herein and pay alleged debtor for all costs and attorney fees involved in defending this collection action.

________________________________________________

Authorized Signature for Collector Date

Please return this completed form and attach all assignment or other transfer agreements that would establish your right to collect this debt. This is demand for validation made pursuant to the Fair Debt Collection Practices Act. If you do not respond as required by this law, you may be liable for damages for continued collection efforts.


[No one is actually going to fill this out. The point here is to get the debt collector seriously thinking about how they want to spend their time; chasing you, or finding easier fish to fry in their latest batch of delinquent accounts. Once I actually did get this form back. Three months after I sent a DV letter to a collection law firm collecting for a JDB, one of the partners on the letterhead replied with this form partially filled out. Then I never heard from them again.]

------ END OF LETTER ------

Here is a link to a page with links for your state’s licensing of debt collectors.

https://www.creditinfocenter.com/community/topic/222230-requirements-for-cas-by-state/

(Scroll down to the list)


Here is a version of this letter without the Massachusetts specific legal references and without the red and black notes. The remaining red lettering is for you to edit and/or delete. This will be easier for you to adapt to your situation.

Month Day, 20XX

CMRR – 7005 1820 0004 1693 5177

Collection Agency, Junk Debt Buyer or Collection Law Firm Name Street Address City, State Zip Code

Re: Acct. # 212990

To Whom It May Concern,

Please note my correct address at the head and foot of this letter.

This letter is being sent to you in response to your letter received July 30, 20XX.

This is a notice that your claim is denied and disputed.

Under the Fair Debt Collections Practices Act (FDCPA), I have the right to request validation of the debt you say I owe.

I am requesting proof that:

1) I am indeed the party you are asking to pay this debt; 2) you possess original creditor documentation/business records with a full

accounting using Generally Accepted Account Principles (charges, payments, interest, etc.) of the amount of this debt that can be presented as evidence;. Also explain and show me how you calculated what you say I owe;

3) your claim is legally supported by a sworn affidavit from someone with personal knowledge of these business records;

4) there is some valid contractual obligation which is binding on me to pay this debt, and


5) you, as a debt collection agency [or collection law firm or JDB] produce documentation from the alleged creditor authorizing you to contact me and pursue the collection of an alleged debt.

6) [If it is a JDB or a collector for a JDB] that you or your client has ownership of this debt.

Complete the attached Creditor/Collector Disclosure and Validation statement and return it to me at the address indicated.

Your legal staff will agree that compliance with this request is required under the laws of [your state] and Federal Statutes.


Please also be aware that if any negative mark is found on my credit reports from your company or any company that you represent, this will result in my filing an immediate lawsuit against you and your client for 1) Violation of the Fair Credit Reporting Act, 2) Violation of the Fair Debt Collection Practices Act, 3) Defamation of Character, 4) Negligent Enablement of Identity Fraud.

You are instructed to take no action that could be detrimental to any of my credit reports.

In addition, [your state’s Office of Business Regulation] has no record of your firm being licensed in [your state] as a debt collector. As you know, there are penalties for fraudulent collection activities. I am in possession of documents from you addressed to me in [your state] clearly marked “this is an attempt to collect a debt,” which are evidence of your fraudulent activities.

I suggest you get your records in order before I have to proceed with legal action.

Signed, your name and address


Follow-up to Debt Validation Letter

The following is an example of what you use should the debt collector reply to your DV letter with validation documents. For me those have included, copies of the credit card agreement and a few old statements, or an affidavit from a junk debt buyer’s employee attesting to the sale of the account to the JDB. Whatever they send, as far as you are concerned it is not sufficient to prove the alleged debt is yours and you state that in a letter like this.

June 13, 20XX

Jones and Smith Debt Collection Law Firm 123 Main St. Los Angeles, CA 94520

U.S. Mail Certified Return Receipt 7005 1820 0004 1693 5180

[The same issue with this number as the original DV]

RE: 4264296999942953, junk debt buyer Account Number

[Again this number from their document should be referenced by your letter.]

To Whom It May Concern: This letter is being sent to you in response to your letter to me received May 21, 200X.

Your attempt at validating this alleged debt provides no original creditor documentation or contract per the FDCPA. [Be specific about what they do not provide in their validation attempt) It does not meet the requirements of the Commonwealth of Mass. debt collection statues. Nor, does it excuse your attempt to collect a debt without being licensed in Massachusetts to do so.

[All I am doing here is repeating what was in my first letter. Given you state debt collection laws, the contents of your letter will differ.]

As I stated in my last letter to you, under the Fair Debt Collections Practices Act (FDCPA), I have the right to request validation of the alleged debt you say I owe. I am requesting proof that;


(1) I am indeed the party you are asking to pay this alleged debt;

(2) you possess documentation and a full accounting of the amount of this alleged debt that can be presented as evidence;

(3) there is some valid contractual obligation which is binding on me to pay this alleged debt;

(4) you, as a debt collector, produce documentation from the alleged creditor authorizing you to contact me and pursue the collection of an alleged debt; and

(5) you produce a license to collect debts in the Commonwealth of Massachusetts.

Complete the attached Creditor/Collector Disclosure and Validation statement and return to me at the address indicated. [Include it again.]


Your legal staff will agree that compliance with this request is required under the laws of the

I require compliance with the terms and conditions of this letter within 30 days, or a complete withdrawal, in writing, of any claim. I also hereby reserve my right to take private civil action against you to recover damages.

Your name and address.


Letters for Different Collection Situations

Try this link for a letter(s) to compare this letter to--

https://www.creditinfocenter.com/rebuild/debt-validation.shtml

The Different Sources of Debt Collection It is important to understand these differences, so you have more control of your debt situation.

2a. Calls and letters from the original creditor, the credit card bank.

Steven Katz, the founder of debtorboards.com and a former employee of a credit card company’s collection department, gives an in depth explanation of credit card banks collection departments. A link to that explanation is in the next call out. Briefly what he says is these collection efforts go from friendly to threatening as the debt ages toward a six-month charge off.

These collectors are paid salary not commission, but they are evaluated on how many debts they prevent from aging. Large balances receive more attention than smaller ones. Notes on why you cannot pay and your personal details SHOULD BE made in your computer file at each interaction with you, so ideally other collectors can have some personal knowledge of you. Court action is threatened as your debt ages to the limit and plunges you into the debtor hell they claim will confront you after it charges off. As a more desirable option, in their minds, settlement or payment plans are offered near the six-month charge off. Your options are to settle or wait for charge off. However, when you do receive a written notice from them attempting to collect the debt, you should send the above letter, appropriately edited to go on record that you are disputing the debt.

2b. Collection Efforts by a Collection Agency after a Debt Charges off But before It Is Sold to a Junk Debt Buyer

The FDCPA covers these activities and protects you. Here commissioned collection agents try to scare you into paying. They are working for the credit card bank on a


percentage (25 to 35 percent) of collections. They play the numbers game looking for the easy targets. They must send you a mini-Miranda notice within five days of their first call to you or before that.

If you respond within 30 days of its receipt with a deny/dispute debt validation request, they will move on to find an easier debtor to collect from.

Do not settle with them. They will lie over the telephone about a settlement amount. They will then demand a lump sum payment BEFORE they give you anything in writing. Once they get the payment, you will get nothing in writing. You will continue to owe the remainder of the debt plus any fees and other charges they take out of your payment.

2c. Collection Efforts by a Collection Attorney after a Debt Charges Off, but before It Is Sold to a Junk Debt Buyer

Sometimes a debt collection law firm will contact you on behalf of the original creditor. This happened to me early on in my fight for credit card debt relief. It scared me. At that point, I thought it was just a matter of time before I got a court summons. But, fortunately I responded to the first attorney’s letter properly. I denied, disputed and requested validation CMRRR within 30 days of its receipt. I never heard from those attorneys again. I can only conclude that the same numbers game applied to that law firm. Why should they spend time with me, when there was easier money to be had? Debt collection attorneys are considered debt collectors first and attorneys second by the FDCPA. And, they must behave as such. In hindsight, this was the common strategy of trying to scare a credit card debtor with some legal letterhead. Always send my validation letter in response to a collection attorney’s initial communication.

2d. An Initial Communication from a JDB (junk debt buyer)

It appears to be common practice for junk debt buyers to canvas a newly purchased block of credit card debt, with a letter requesting payment, commonly offering a reduced balance and/or one without [bogus] fees and penalties. This initial communication does not come in the form of a mini-Miranda as required by the Fair Debt Collection Practices Act. Instead the junk debt buyer tries to portray itself as an original creditor attempting to collect on the debt. JDBs are considered debt


collectors by the FDCPA and therefore quite susceptible to a DV letter. Typically though, they are not licensed to collect debts in states that license debt collectors. Some have responded to my DV letters with affidavits from one of their employees attesting to the sale of my credit card debt to them, sometimes with a copy of the cover sheet to the purchase document for a block of hundreds or thousands of credit card accounts. In other words, in lieu of supplying any real proof of the debt, that was the best they could do. A few times I got copies of old credit card statements—poor copies. After this initial foray, the JDB usually hands the block of newly purchased debt over to a collection agency. Always send a denying, disputing validation letter in response to a JDB’s initial communication.

2e. Collection Efforts by a Collection Attorney for a JDB

This is a real numbers game for these collection attorneys. They do not want to do any legal work to collect a debt, they just want to scare alleged debtors and pursue default judgments. Their mini-Mirandas typically come from the law firm, not an individual attorney. If the letter comes from an out-of-state law firm, it is one of thousands that have been sent out. If the letter comes from a relatively nearby attorney, it is one of dozens or hundreds sent out. Somewhere in the document is the statement, “this debt has not been reviewed by an attorney.” Attorneys are considered officers of the court in any court of law where they practice. If an alleged debt was found to be fraudulent, they could be held accountable for their collection letter, hence this disclaimer. In addition if they are out of state from you, they likely may not be licensed to practice law in your state. With these junk debts worth pennies on the dollar, and with numerous letters being sent out at once, a collection attorney is not going to review the file related to each letter. The way to respond to their communication is with a denying, disputing DV letter. Legal precedent (Spears vs. Brennan) establishes that they must validate before they can get any kind of legal judgment against a debtor.

2f. Collection Efforts by a Collection Agency for a JDB

These are probably the most aggressive debt collectors. They try to scare you with the-summons-is-in-the-mail lie. If they call you cold for the first time, tell them they must send you a mini-Miranda notice. If they do in fact send you one, DV it. If they offer to settle for a very reasonable payment plan, do not respond. Do not make a


small payment or a counter-offer. By that act you will be re-contracting with the JDB. You will be admitting to the debt. The statute of limitations will start over, and you will be a good candidate for a lawsuit, since with your admission, they can prove the debt is yours.

Way No.3 - Collection Agency Practices

You need to understand these and beware of them.

1) They threaten to have you arrested. Unfortunately for them, bad debts are not a criminal matter. This type of threat is, however, a violation of the FDCPA.

2) They threaten to have your wages garnished. That cannot happen without a judgment and a subsequent wage garnishing court procedure. In some states wages cannot be garnished. That is another threat and another FDCPA violation.

3) They threaten to seize your bank account. Again, that cannot happen without a judgment and a subsequent court order. All these threats are in violation of the FDCPA and subject to $1000 awards each.

4) If you have been making payments to a collection agency, your payment records may get lost or the collector you were working with has left the company. In any event, they will insist you still owe the original amount, perhaps more.

5) They add their own fees and interest to the original balance to inflate the debt to get more money out of you.

6) They call your place of employment, your neighbors, or your relatives to collect on the alleged debt, which are violations of the FDCPA.

7) They give you a court summons instead of responding to your validation letter. There is a court judgment precedent (below), which says that a collection agency or attorney cannot file suit against you if they haven't validated the debt within the initial 30- day period. If this happens to you, you may cite the case below.

In Spears vs. Brennan the appeals court determined . . .

"Brennan (plaintiff collection agency attorney) violated 15 U.S.C. § 1692g(b) [the Fair Debt Collection Practices Act] when he obtained a default judgment against


Spears (defendant) after Spears had notified Brennan [within 30 days of receiving Brennan’s debt collection notice] in writing that the debt was being disputed and before Brennan had mailed verification of the debt to Spears." The collection agency did not validate the debt in response to Spear’s DV letter, nor did the collection attorney. This means that you have an absolute defense in court to deny them judgment if they still have not validated the debt. The collector cannot get a judgment until they respond to your request for validation to comply with the FDCPA.

8) In response to your debt validation letter, they ask for more information about you on the phone or in writing. This is an attempt to re-contract with you. A good debt validation letter can work if sent CMRRR within 30 days of receipt of the debt collector’s mini-Miranda notice. Under the FDCPA you can instruct the collector to cease all collection activities and to not communicate with you until they have validated the alleged debt, and then only to communicate with you by mail, NO phone calls. If they do not do that, they are in violation of the FDCPA and liable for $1000 each time they communicate with you, as in asking for more information plus attorney fees.

9) Putting a negative listing on your credit report is considered collection activity and is a violation of the FDCPA. People have had success sending a follow-up letterhead informing the collection agency about that violation and instructing them to remove the listing.

10) Forging Your Signature – The online debt forums all advise you to not sign any written communications to collection agencies. I signed all my debt validation letters with a few pen strokes that in no way resembled my signature.

11) Stealing your bank account information and debiting money from your account, or just cleaning it out. If you send a personal check for some type of payment, the collection agency can take your bank account number and routing information off of it and access your account. Once they have your money it is up to you to get it back. Of course they will claim you owe it and you authorized the debit with your account information. The consensus is to send a bank check or money order, if you have to send anything.

12) Lying – a popular expression in the debt forums has it that “100 percent of debt collectors lie 100 percent of the time.” Individual debt collectors tell lies to scare you into paying and complying. They do that over the telephone, where there is not


record of the lie. It is difficult to lie in writing, when there is a documented record of communications.

13 Encourage small, token payments to re-age a debt and restart the applicable statute of limitations (SOL). That is what happens when you make a payment on a debt because it is a pain to deal with even though it that has been discharged and is out of SOL. This re-aging then opens you up to the possibility of a lawsuit over the newly aged debt. The rationale goes since you are making payments, you are probably worth suing. This is why “doing the right thing” is the WRONG thing to do once a credit card debt has been sold.

14) Renaming to re-age a debt – A few junk debt buyers will attempt to portray themselves as the original creditor of their junk debt purchases to the credit reporting agencies. That way they can re-age the debt to counter the SOL and get a negative listing onto your credit report.

15) You send a collector a debt validation letter denying and disputing the debt and asking for validation. They reply with forms to fill out so you can claim your identity was stolen. This is a scam to avoid validation. You identity was not stolen, and you should not claim that it was. Send another deny/dispute/validate letter CMRRR in response to those forms.

16) Claiming over the telephone that a lawsuit has been filed against you in your local court, and that the summons is on its way to you. This is a great, scary lie. This phony lawsuit threat is usually done with their first phone call to you before their mini-Miranda notice has arrived telling you of your right to dispute the debt. This ambush phone call out-of-the-blue from an unknown debt collector is a favorite, effective collection tactic. It catches you unprepared and feeling guilty about the debt you know you owe. You should get the name of the firm and get off the phone without saying anything other than “I do not discuss my personal finances over the phone with unknown strangers.” And, it is an FDCPA violation to threaten non-existent lawsuits.

17) They do not respond to debt validation letters. Or, instead of responding to your DV, they bounce the debt to another collection agency, that sends you another mini-Miranda, and around and around.

18) JDBs and collection agencies review your credit reports and put them through software that predicts the likelihood of your ability to pay the debt.


Way No.4 - Best Practices for Dealing with Debt Collectors

Here are 19 basic tenets that should be followed when dealing with credit card debt collectors.

1) Always deny and dispute and never admit that a debt is yours. This is a legal strategy. It is not a reflection on your honesty or character. Your credit card debt is unsecured. You did not sign a contract.

2) Despite the FDCPA’s reference to responding to a mini-Miranda within 30 days, it is never too late to ask for validation. Late is better than never. Validation is key to your success.

3) Always send a deny/dispute/debt validation letter in response to each new mini-Miranda notice from new collectors.

4) When you hear from a new collection agency or junk debt buyer always take a few minutes to Google them for more information and search the debt forums for comments about others’ experience with them.

5) Understand that while the debt is yours, it is your legal right to deny it, to dispute it and to insist that the collection agency or attorney document their case against you, proving - (1) that there was a contract between you and the original creditor, (2) that they can document their ownership of the debt if they are not the original creditor, and (3) how they arrived at the specific amount of the debt they say you owe.

6) Unlike settling a debt with the original creditors, the credit card banks, you should never settle with collection agencies and junk debt buyers. It will hurt your credit even more. “Doing the right thing” is NOT paying a dime to anyone who bought your debt for a few pennies on the dollar. The way the debt collection industry is set up, you will do a disproportionate amount of damage to yourself trying to repay an old debt. Making payments on older debts restarts the statute of limitations, which goes from the date of the last payment made on a debt. So, if your state’s statute of limitations is three years, and you start paying after two years, the junk debt buyer or collection agency can get a judgment against you for another three years instead of another year. That is not true for your credit report, whether you pay the junk debt buyer or not, the listing must come off your report


seven years plus 180 days from the date of first delinquency with the original creditor.

7) Stay off the phone. Do not try to handle things solely by phone. There is no record of a phone call and no reason why the collecting party should hold up their end of the deal. Do not talk to debt collectors on the phone unless you are attempting to negotiate a settlement that will be followed up in writing.

8) Do NOT take telephone calls from debt collectors or return their calls as a result of threatening telephone messages. If they have sent you a mini-Miranda and you have responded properly to it in writing, you have instructed them not to call and by doing so they are in violation of the FDCPA. If they call out of the blue, they are just a voice on the other end of the line, and you do not discuss your personal finances with strangers. Get the collection agency’s name and the junk debt buyer’s name and hang up.

9) Do not “re-contract” with anyone attempting to collect a debt from you. Remember that the collection agency, junk debt buyer, and collection attorney are each trying to re-contract with you by getting you to admit to the debt; by getting you to do their job for them. Their job is to prove you owe the debt. Innocent communications to a debt collector could be construed as re-contracting. This is another reason the stay off the phone and to limit written communications to notices pursuant to debt collection laws.

10) Always respond to written debt collection communications. Always deny the debt and dispute it with a debt validation letter. People who DV are much less likely to be sued. People who do not DV are more vulnerable and the profitable numbers principle applies to them.

11) Keep good records!!! Always, always document your communications. Keep copies of all letters to and from collection agencies, junk debt buyers and collection attorneys. Send everything certified [mail] return receipt requested (CMRRR) U.S. mail. If it is not sent CMRRR, debt collectors do not have to take it seriously because they can always claim they never received it. If you do not have credit card agreements for your current accounts, call and get them before they go into arrears.

12) Always record the date and time of debt collector phone calls. Get the name of the company and the caller’s name. Note down the substance of the conversation. For example, if the collector says there is a summons in the mail to you, and there is


not, that is a threat, which violates the FDCPA. Keeping this log is a necessary means of recording FDCPA violations. If one collector continually violates the FDCPA in contacting you, your affidavit attesting to your log may be enough for an attorney to successfully sue on contingency for damages and attorney fees.

13) Learn about your state’s debt collection statutes and consumer protection laws. Unless you already know them, check your state’s statute of limitations (SOL) for all your outstanding debts. You should also check your credit agreements for which state’s laws govern each agreement. It is good to know if that state’s SOL is shorter than you state’s SOL in case any legal action is taken against you. SOL is measured from the time of first delinquency. For example in Delaware and Virginia, which headquarter large credit card banks, the SOL is three years.

Here is one source of state statutes of limitations (SOLs) to verify your applicable SOL(s). http://www.bcsalliance.com/debt-statutes-of-limitation.html

14) Don’t confuse the statutes of limitations on legal actions with the limit on reporting debts by credit reporting agencies. That is seven years plus 180 days from the first month of delinquency.

15) Never, ever give your bank account information over the phone. Remember, 100 percent of debt collectors will lie to you 100 percent of the time. There is no real urgency that requires you to share that information, just the lies about court action that the collectors spin to get you to submit to them.

16) In addition if you are still current with your credit cards and are making payments online by debiting your checking account, stop that method of payment immediately. Those individually recorded debit-payments are an easy way to document your contract with the credit card bank. Personal checks, on the other hand, are deposited with hundreds or thousands of other checks.

17) In the unlikely event of a court action, always answer a court summons within the time required stating the appropriate legal defenses as determined by your local rules of civil procedure (See the next chapter). A few pages are sufficient to avoid an immediate default judgment against you and to get the collection attorney thinking about the additional time needed to pursue you court, as well as to give you time to prepare your case against the collection attorney.

18) If the collection agency, junk debt buyer or collection attorney respond to your DV letter with documentation (usually a few copies of past account statements and


sometimes an unsigned contract) reply CMRRR disputing the debt, stating the documentation is insufficient and asking for more.

19) Remember that debt collectors are not obligated to collect every debt assigned to them. Their only obligation is to effectively use their time to collect debts and make money. Most people do not deny, dispute and request debt validation CMRRR. They are much easier to collect from than the few that do.

Way No.5 – Helpful Links To Other Sites

Link to full FDCPA

http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre27.pdf.

You should read sections 804 to 813 to see for yourself the protection the federal Fair Debt Collection Practices Act affords you.

FDCPA interpretations based on case precedents (cited in this PDF) from Daniel Edelman a recognized consumer law expert.

http://www.edcombs.com/wp-content/uploads/2013/05/fdcpa-december-2012.pdf

Statutes of Limitations on the Collection of Debt

Statutes of limitations (SOL) are discussed in several chapters in this information. This section brings most of that information together for easy reference. When dealing with any type of debt collection effort you need to first determine if your debt is still within your state’s Statute of Limitation on the Collection of Debt.

It is important to learn your resident state’s statute of limitations for the collection of debts. In most states the period a creditor can pursue a debtor in court for an open-ended credit card account is three to six years, but a few states have longer periods. SOL is measured from the time of first delinquency. Check with a local consumer attorney to be certain about how your state statute treats the beginning of the SOL. Plus or minus 30 days could make big difference.

Your credit card account is an open-ended account or open account, an account that has a varying, revolving balance. Most states’ statutes of limitations on court action


for the collection of debts differentiate open account debt from other debt, allowing fewer years to pursue the debt for collection in court.

You should check your credit card agreements for which state’s laws govern each agreement. It is good to know if that state’s SOL is shorter than you state’s SOL in case any legal action is taken against you. For example in Delaware and Virginia, which headquarter large credit card banks, the SOL is three years. Invoking the shorter SOL if you are summoned could win the case for you depending on your state’s choice-of-law legal precedents. Regardless of the case’s potential outcome, that SOL period should be an affirmative defense in your answer to the summons. That could discourage the collection attorney from pursuing the case.

Collection agencies are known to pursue consumers for accounts well beyond their states’ statute of limitations (SOL). While they cannot legally file suit after the SOL is up, there is no law against seeking debt collection or threatening a lawsuit to most un-informed consumers. The state of Maryland filed suit against a large out-of-state junk debt buyer for bringing cases to state court on zombie debts over 10 years old.

Many people pay to avoid the hassle of an old debt.. Others have lost or thrown out their old account documentation that demonstrates the SOL has lapsed. Some debt collectors trick consumers into making a small token payment which restarts the SOL.

Making payments on older debts restarts the statute of limitations, which goes from the last payment made on a debt. So, if your state’s statute of limitations is three years, and you start paying after two years, the junk debt buyer or collection agency can get a judgment against you for another three years instead of another year.

The time period that a negative listing can be reported to the credit rating agencies and appear on your credit report is often confused with the debt collection statutes of limitations. An original creditor can keep a negative listing on your credit report for seven years plus 180 days from the date of first delinquency.

A few junk debt buyers will attempt to portray themselves as the original creditor of their junk debt purchases to the credit reporting agencies. That way they can re-age the debt to counter the 7.5 years and get a negative listing on your credit report.


Here is an excellent discussion by a National Consumer Law Center staff attorney of the challenges to applying states statutes of limitations to credit card debt -- https://library.nclc.org/shortening-limitations-period-credit-card-collection-lawsuits

Debt Forum Links

You can search these forums for more specific information on your bank or junk debt buyer and on your state.

CREDIT INFOCENTER’s debt forums

https://www.creditinfocenter.com/community/?f=174

Creditboards.com index and starting point

https://creditboards.com/forums/index.php?/topic/14797-index-and-starting-point/

(You must join creditboards.com -at no cost- and use the remember-me option for this link to work. If you still cannot access this specific page on creditboards.com, log onto to creditboards.com as a member, then copy this web address and past it into the address bar at the top of your browser.)

Debtorboards

http://www.debtorboards.com/

This content is not intended as a substitute for legal advice. If you need an attorney in your local area, please contact a licensed consumer rightsattorney in your state. Copyright 2009 - 2018 Vision Publishing Inc.

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