Debt validation if not the most powerful weapon a consumer has against disreputable, unethical debt collection agencies and debt collection attorneys is right up there in the top 3. The Fair Debt Collection Practices Act is very specific about what the definition of "creditor" is. The creditor is the party who loaned you the money in the first instance, not the party who the debt has been assigned to or who has purchased the debt. Under the law the party who has had the debt assigned to it or who has purchased it is defined as a "debt collector". The distinction is important.
A debt collection attorney or a debt collection agency may try to convince you that they are the original creditor. Not true. Creditors are not subject to compliance with the FDCPA but debt collectors are. If the original creditor is attempting to communicate with you it is in your best interest to have the conversation and attempt to reach an accommodation if possible.
Charged off debts (debts written off as losses)by creditors are customarily sold to JDB's (junk debt buyers). This is the tawdry scummy side of the world of debt collection, the place where all the laws are violated and innocent consumers are treated like cattle headed for slaughter. This is the place where all the illegal acts and frivolous lawsuits come from.
These JDB's buy up charged off debts for pennies on the dollar. This is a huge market and very similar to other secondary markets that deal in commodities or junk paper or just plain junk. The strategy used is to try to scare the s..t out of people by using all means of intimidation possible, most of it if not all of illegal.
Understand that when you are making 100's of thousands of dollars and in many cases millions of dollars that fines of $1000 per violation become merely a cost of doing business. Beginning to get the picture? The FDCPA was enacted in 1966 so the fines have not kept up with inflation. What would $1000.00 in 1966 dollars be worth now? $6632.87 if you use the consumer price index and $5281.36 if you use the gdp deflator. Get the picture? Why should these crooks care about breaking the law?
When a debt collector calls you or writes to you they must by law inform you of your right to dispute the subject debt within 5 days of the initial communication. Some do this and some do not but you have to know that this is the law. Disputing the debt means that you never owed this money, you are disputing the amount and or the fees and interest being charged.
Here's the deal. There is a right way and a wrong way to dispute a debt and demand validation. If a debt collector furnishes you with a letter saying that this is your date with your name, an account number and a dollar amount, this does not constitute a validation of the debt. They try to pull this stuff all the time and also come with phony affidavits which are signed by their own employees with no documentation and in house manufactured account statements.
The first thing you do is to go to the post office and grab some certified mail green cards and green and white forms both of which must be filed out and adhered to the mailing envelope. The important thing is to key in the certified mail serial number at the top of the letter you are writing. We'll get the the letter in a minute. Everything you send must always go certified mail because the slime receiving the letter if it is only sent first class will deny receiving it.
In your letter you should reference the debt collector's file number, any account numbers given etc. If the debt is not yours you may start out by stating that fact. Demand from the debt collector what proof they have and can document. This would include account statements, a copy of your original application(signed by you) applying for the account, a contract of sale proving they own this account (notarized), and documents of evidencing the chain of ownership of the account. Your name, an account number, and a dollar amount will not cut it in court.
A new tactic being used by these sociopaths is to just serve you with a summons and complaint without validating the debt hoping you are stupid enough to fold, pay up and not question these blatantly illegal tactics. My attorney buddies tell me and I have also read this statistic that 90% of all the summons and complaints filed end up as default judgments in favor of the debt collectors because the alleged debts do not answer the complaints or show up for court.
If you email me at stopthecallsfast@gmail.com I will be happy to email you a free validation letter with an audio explaining exactly how to use it. You will then be on my subscriber list and be updated on late breaking developments affecting your rights as a consumer with special emphasis on dealing with debt collector abuses. If you have questions about this article please also email me at the above email address or post comments to the blog.
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