Debt Validation / Resolution
Debt Validation / Resolution
Debt validation, or “debt verification”, refers to a consumer’s right to challenge a debt and/or receive written verification of a debt from a debt collector.
Under protection laws created to protect consumers from illegal practices by collectors, our process was built to assist consumers within the validation process. The most powerful tool under the federal Fair Debt Collection Practices Act is the right to demand that a collector reporting information to the credit bureaus proves the account is really your responsibility and that the balances are accurate, we assist with exercising that legal right.
Within this process, we focus on putting a halt on harassing phone calls and collection calls. Several laws are utilized throughout the process to assist in invalidating the debts legally with the collectors.
The right to dispute the debt and receive validation are part of the consumer’s rights under the United States Federal Fair Debt Collection Practices Act (FDCPA) and are set out in §809 of that act, which has been codified in Title 15, Section 1692-1692p of the United States Code. This debt validation procedure was expected to reduce the incidence of debt collectors dunning the wrong person or attempting to collect previously paid debts.
This option works best when you are, or you have been, delinquent on your obligations and the original creditor has sold your debt to a vicious debt collector. If you are getting harassment calls from collectors, this is the option you should research and consider.
Judge: 90% of Credit Card Lawsuits Can’t Prove Borrower Owes Money
Posted on August 13, 2012 by Yves Smith
Credit card debt collection may achieve the dubious distinction of making mortgage servicers look good.
The New York Times has been keeping watch on this area. It recently reported that credit card debt collectors relied heavily on robosigned affidavits. A new story recounts how credit card companies frequently file erroneous lawsuits, sometimes saying a customer owes money when they’ve paid off the balance (sound familiar?). But more often, the consumer disputes the accuracy of the balance. And unlike foreclosure-land, where even after the revelation of widespread and varied mortgage abuses, most judges side with the bank, in these credit card cases, the conduct of lenders is so bad that experienced judges are skeptical of them. From the article:
As they work through a glut of bad loans, companies like American Express, Citigroup and Discover Financial are going to court to recoup their money. But many of the lawsuits rely on erroneous documents, incomplete records and generic testimony from witnesses, according to judges who oversee the cases.
Lenders, the judges said, are churning out lawsuits without regard for accuracy, and improperly collecting debts from consumers. The concerns echo a recent abuse in the foreclosure system, a practice known as robo-signing in which banks produced similar documents for different homeowners and did not review them.
“I would say that roughly 90 percent of the credit card lawsuits are flawed and can’t prove the person owes the debt,” said Noach Dear, a state civil court judge in Brooklyn, who said he presides over as many as 100 such cases a day….”
The problem, according to judges, is that credit card companies are not always following the proper legal procedures, even when they have the right to collect money. Certain cases hinge on mass-produced documents because the lenders do not provide proof of the outstanding debts, like the original contract or payment history.
At times, lawsuits include falsified credit card statements, produced years after borrowers supposedly fell behind on their bills.
But the big reason that the credit card companies can ride roughshod over the law is that so few consumers contest these cases. The article reports that 95% of cases go uncontested, meaning the lender will win a default judgment and can then garnish wages or bank account balances.
And if you think it’s bad with the credit card companies, it’s even worse with the bottom feeders. A colleague has a sister who lives in Texas, where the statute of limitations on unpaid debts is four years. Apparently, a hedge fund is backing a company that buys bad debts from credit card companies, debt they’ve already written off, shortly before the statute of limitations is about to expire, for pennies on the dollar.
They then file suit. They don’t even plan to spend any money fighting, they just intend to win default judgments. So if you hire a lawyer and merely file an answer, you win. But a remarkably high percentage of people fail to do that.
And for the credit card companies, the critics can substantiate their doubts about the accuracy of documentation. One example entails a case out of Georgia.
In 2010, Discover sued Taryn Gregory for more than $7,000 in credit card debt. Ms. Gregory, of Commerce, Ga., had fallen behind on her bills, but said she had accumulated only $4,000 in debt.
After the suit was filed, Ms. Gregory, a 41-year-old child care assistant, asked Discover for proof of the balance. The resulting documents, which were reviewed by The New York Times, have inconsistencies. One statement, for example, says it was produced in 2004, but advertisements on the bottom of the document bear a 2010 date.
We’ve gone back over 300 years, to the ugly time before the 1677 Statute of Frauds. And the worse is too few people seem to appreciate how destructive that is not just to commerce, but to faith in the authority structure.