How to request validation of a debt
March 11, 2010 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) gives consumers the right to request validation of a debt. Under the FDCPA, a debt collector must send you a written notice within 5 days of their first communication with you. The notice must tell you, among other things, about your right to request validation of the debt.
In my experience, consumers should almost always request validation of the debt, particularly if a debt buyer is involved, because the more information you have, the better. But here are a couple things to keep in mind about the validation process:
- You must request validation in writing and you must request it within 30 days of your receipt of the required notice. Under the FDCPA, a debt collector doesn’t have to honor a request for validation unless it’s in writing and unless they receive it within 30 days of your receipt of the notice. As a practical matter, many debt collectors will honor a verbal request for validation and some will even honor a request made after the 30 days. But if you want to protect your right to have your debt validated, you must do it in writing and within 30 days. I recommend sending the letter via certified mail so that you can prove that they received it and when they received it.
- Once you’ve properly requested validation, the debt collector must cease all collection attempts until they provide it to you. There are some websites that claim that a debt collector must validate a debt within 30 days and if they don’t the debt is forgiven. This is simply not true. There is no time limit to how long the debt collector has to validate your debt. They just can’t call you, write you, sue you, or take any other action until they validate. If they do, they’ve violated the FDCPA.
- A debt collector can’t use your failure to request validation of a debt against you. The FDCPA prevents collectors from using your failure to request validation as evidence that you owe the debt.
- There aren’t any clear requirements about what type of documents are sufficient validation. The FDCPA doesn’t define validation, and the FTC has said that validation only needs to confirm that the debt collector is pursuing the right person and the right amount.
- Collection activity during the 30 day validation period can’t “overshadow” your right to request validation. This can be a little tricky, but here’s an example: let’s say you receive the validation notice on March 1 and then they serve you with a lawsuit on March 5. Under the FDCPA, you have 30 days–or until March 31–to request validation. And in Minnesota you have 20 days–or until March 26–to respond to a lawsuit. So because you have to answer the lawsuit before your time to request validation is up, the lawsuit “overshadows” your right to request validation. This is a violation of the FDCPA.
If you live in Minnesota and believe that a debt collector has violated your rights under the FDCPA, feel free to contact me for a free case evaluation.
Texas man fights back against debt collectors
February 2, 2010 by Todd Murray · Leave a Comment
Craig Cunningham grew tired of repeated debt collection calls. So he decided to fight back by suing the debt collectors for violating the FDCPA and Texas state laws. In fact, Cunningham has filed 18 lawsuits and won over $20,000 from debt collectors. The story details a number of the tactics Cunningham has developed to bait collectors into violating the law. According to the story, he’s created quite a stir among the collection industry. In response to Cunningham and others like him, a new business opportunity has sprung up–one dedicated to helping collection agencies identify and avoid repeat FDCPA litigants.
I have mixed feelings about this story. On the one hand, I have a hard time mustering any sympathy for the debt collection industry–an industry that receives more consumer complaints than any other. But the FDCPA, and state laws like it, are designed to protect people against debt collection harassment and abuse. They’re not designed to be used to game the system to avoid paying debts. I’m also concerned that the debt collection industry will point to Cunningham and other aggressive debtors in their fight against stronger consumer regulations.
Dallas Observer | Better Off Deadbeat: Craig Cunningham Has a Simple Solution for Getting Bill Collectors Off His Back. He Sues Them | January 20, 2010 (via Consumerist)
What is debt collection harassment?
December 3, 2009 by Todd Murray · Leave a Comment
Sounds like an easy question, right? But there has been a lot of litigation over what exactly is considered “harassment” or “abuse” under the Fair Debt Collection Practices Act (FDCPA). Here are some debt collection tactics that are definitely considered harassment and abuse under the FDCPA:
- Debt collectors cannot use violence to collect a debt. They can’t even threaten it. This prohibition also covers threats against your children, friends, and other third parties.
- Bill collectors can’t use profane or abusive language. Obviously different people have different definitions of “profane or abusive”. But at least one court has ruled that name calling and racial or ethnic slurs are profane and abusive.
- Collectors can’t call you repeatedly. This not only applies to actual telephone conversations, but also to causing the phone to ring. For example, redialing your number after you’ve hung up the phone.
- Debt collectors must tell you who is calling. Fairly self-explanatory. But there is some debate about whether collectors can use a consistent alias. Not surprisingly, many collectors would rather not use their real name when on the job. So some courts have allowed the use of aliases.
- Any other debt collection conduct where the “natural consequence” is to harass, oppress, or abuse. This is the catch-all provision. Again, it can be tough to define what conduct has the natural consequence to harass, oppress, or abuse, but courts have found the following conduct to be violations of this section: (1) threats to contact third parties; (2) telephone messages left with neighbors when the collector could have reached the consumer directly; (3) use of words like “liar”, “deadbeat”, and “crook”.
If you live in Minnesota and have been subjected to these, or similar, abusive debt collection tactics, feel free to contact me for a free case evaluation.
Debt collectors can’t threaten to sue you unless they really mean it
November 16, 2009 by Todd Murray · Leave a Comment
The Fair Debt Collection Practices Act (FDCPA) prohibits a debt collector from threatening to do something that they don’t really intend to do. The most common violation of this part of the FDCPA is when a debt collector threatens you with a lawsuit if you don’t agree to pay the debt. This FDCPA violation requires two things: (1) that the debt collector threatened to sue you; and (2) that they didn’t really mean it. So how do you know whether the debt collector is lying when they threaten legal action? Here are a couple of indications:
the amount of the debt is small;- the debt collector does not have an office in your state;
- the debt collector does not have a licensed attorney in your state;
- the collector threatened a lawsuit and months or even years went by before they sued you.
There are other indications as well, but its tough to know whether they apply before bringing a FDCPA lawsuit. For example, the debt collector may not have the creditor’s authorization to sue you, but there’s really no way to know that until you get into litigation and can use discovery to figure it out.
This part of the FDCPA probably also applies to many veiled or implied threats of a lawsuit. For example, courts have found FDCPA violations from the following statements:
- The collector “can” or “may” sue;
- The debt would be referred to a lawyer “for collection action”;
- The collector is authorized to proceed with legal action;
If you live in Minnesota, and a debt collector has falsely threatened you with a lawsuit, feel free to contact me for a free case evaluation.
(photo: chefranden)
Does the FDCPA apply to my situation?
November 4, 2009 by Todd Murray · Leave a Comment
It is an unfortunate and little-known fact that the Fair Debt Collection Practices Act (FDCPA) does not apply to every debt collection situation. Two requirements must be met before the FDCPA comes into play.
First, the debt that is involved must be a “consumer debt”. The FDCPA defines “consumer debt” as any debt where the money was used to buy goods or services that were “primarily for personal, family, or household purposes.” What does this mean in English? It means that business debts are not covered by the FDCPA. Only debts incurred to buy goods or services for use by you, your family, or in your house.
Second, there must be a “debt collector” involved. Under the FDCPA, “debt collector” is a term of art that means a business that collects the debts of another. This means that the original lender or creditor is not covered by the FDCPA. So if you had a Capital One credit card and the Capital One collection department is calling you, they are not required to follow the FDCPA. But if ABC collection agency is collecting on behalf of Capital One, the FDCPA applies to them. Law firms are also covered by the FDCPA if they regularly collect consumer debts. So the FDCPA definitely applies to a collection law firm, but probably doesn’t apply to a law firm that only occasionally handles consumer collection cases.
Of course, even if your situation involves a consumer debt and a debt collector, there must still be a violation of the FDCPA. This article details many of the common FDCPA violations.
If you live in Minnesota and have been harassed or abused by debt collector, feel free to contact me for a free case evaluation.
