Friday, November 7, 2014

The Importance of Debt Validation

It has been quite a week, with the mid-term elections finally concluded (we can all go back to regular commercials, at least for a week or two) and the news yesterday that the Sixth Circuit Court of Appealsupheld gay marriage bans in four states (Michigan, Ohio, Tennessee and Kentucky), which likely sets the issue up for another trip to the United States Supreme Court.

In more local news, a friend of mine engaged in a trial strategy (called “bold” by the New York Post) in his defense of a man accused of driving around Manhattan in under 30 minutes. Unfortunately for Mr. Tang, the jury found him guilty on all counts.

While the world enjoys some excitement, the majority of my week has been spent on debt validation cases and exploring the vast paperwork that comes when a consumer contests the debt claims of a collection agent. On paper, it can be a pretty boring way to spend your day, but when you find that discrepancy, it can make your day (and your client’s week).

Under the Fair Debt Collection Practices Act, the validation of debts is an important process to protect yourself.

§ 809.  Validation of debts   [15 USC 1692g]
(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing --(1) the amount of the debt;(2) the name of the creditor to whom the debt is owed;(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and(5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.(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, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.
This week’s major discrepancy seems to be a loan taken out in my client’s name, in a state where he has never lived, and under a mis-spelling of his name. The documents don’t seem to indicate how the person who took the loan out got my client’s information with enough specificity to get the loan, but at least it is a start to get the case and investigation going.


The litigation to clear my client’s name will like take at least a year, but the upside is that we finally have something to go on and the process should work itself out to the right resolution in the end.

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