Know Your Rights

The Debt Collection Letter Cycle

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 communication itself. 

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.

The 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 debt.  

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 review.



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