The Debt Collection Letter Cycle
Posted: Wednesday, May 9, 2012
You receive a collection letter, and like all first collection
letters, it advises you that "unless you
dispute the validity of this debt or any portion thereof within
30 days of the receipt of this letter, we will assume the debt is
valid" The letter goes on to say that "if you dispute the
debt in writing within the 30 day period, we will provide you
validation of the debt." These are important disclosures that
a collector must provide within 5 days of their initial
communication with you if those disclosures were not in the initial
As a wise consumer that seeks to register a dispute over the
debt, you write in your demand for validation. Time goes on
and you never hear back from that collector. You even start
to think that they just gave up and won't collect any
further. However, weeks or months later, you receive another
collection letter regarding the same account, but its from a
different collection agency. This new collection agency
sends a letter with that same language on it: advising that
you can dispute within 30 days of receiving the letter and giving
you the opportunity to seek validation. Perhaps
you try again, and send a dispute letter to this collector.
And again, after hearing no response from that collector, another
collector comes along and writes another letter containing the same
language. When does it end? When will someone actually
respond to you? Is this legal?
This is a pattern we see quite often. Consumers send in a
demand for validation and instead of getting their validation, the
debt is recycled to another collector who does the same
thing. You should not have to keep on issuing a dispute over
and over. The message should get passed on.
Fair Debt Collection Practices Act provides that a collector
cannot make any misrepresentation regarding the character, amount,
or status of a debt.
15 U.S.C. §1692e(2)(A). This section does not state that
the misrepresentation has to be made to the consumer. The
statute is silent on that point, and as such, we can assume that a
misrepresentation made to anyone about the character, amount, or
status of a debt would be a violation of this section of the
FDCPA. When a consumer notifies a collector that
they dispute the debt, then the status of the debt is that it is
one that is disputed and in need of validation (because under
15 U.S.C. §1692g(b), the collector cannot continue collection
attempts until the debt is validated). If the collector
to whom you sent the validation request does not pass on the
important information that the debt is disputed and in need
of validation, then that collector has misrepresented the status of
the debt to another collector or the owner of the
There can be help found in another section of the
FDCPA. 15 U.S.C. §1692e(8) provides that a collector
cannot communicate credit information it knows to be untrue, which
includes the failure to communicate that a debt is disputed.
If a collector gets a dispute and validation demand from a
consumer, then turns the debt over to another collector or the
owner, and essentially advises that the debt is unpaid but that the
consumer disputed the debt, didn't they just communicate credit
information and fail to communicate that it is disputed?
Nowhere in this section does the statute state that the
communication must be to a credit reporting agency. Rather,
it states that that the communication must be to a "person."
Therefore, a communication to someone that a debt is not paid is a
communication about credit information. The failure to pass
on that dispute by the consumer would violate this section of the
FDCPA as well.
The FDCPA is designed to protect consumers from these types of
practices. Properly reading and understanding these sections
of the Act can help stop problems like the constant recycling of
the debt and the failure to get the validation requested.
When you're being pursued by debt collectors, you have
rights, and we're here to help. SmithMarco, P.C., has
over 30 years of combined experience practicing law protecting the
rights of consumers around the country. If you feel that you're
rights have been violated, please contact us for a free case