Debt holder won't remove invalid debt!

What is the name of your state? Michigan

I'm glad to have found this board because I could really use some good advice right now

A debt collection company has placed a collection item on my husband's Trans Union credit report. My husband had a charge-off in 1991 when he couldn't find employment after college. By the late 1990's, the item fell off his credit report (the 7 years had expired) and his credit is now spotless....except for this one item.

Apparently, a company bought this outdated debt and is now claiming there was "activity" on the account in 1998, which allows them to keep it on his credit report until 2005. THIS IS UNTRUE! There has been NO activity on this account since 1991.

This is a unscrupulous company that buys outdated debts for pennies on the dollar, throws them on credit reports, and then tries to get consumers to "settle" with them (ie, pay their extortion money!)

Here's what we've done so far:

1) Had TransUnion "verify" the debt twice. This is basically useless, because all TU does is contact the debtholder and say "Are the dates you submitted to us correct?" Of course they are going to say they're correct! Otherwise, TU would take the item off right away.

2) We have written to the debt holder demanding that they provide proof that the debt is valid (they are based in Massachusetts). We sent certified letters to two different addresses for this debt holder and both letters have been returned as "unclaimed"! One address was the PO Box which was listed on the TU credit report, the second was an address which we received from TU.

My questions are:

1) What steps should we take next?
2) Do we have a case to sue them in Michigan (perhaps in small claims court)? They claim the original debt was $3000, but now is $9000 with interest, fees, etc. (I anticipate that it might not be that easy to find them and serve them a subpoena...they seem to be a shadowy company)
3) Approximately how long would a lawsuit take?

Any and all advice is much appreciated.

Thanks,
Heather

[Ladynred]

Would these scumbags be CAMCO or RMA perhaps ?

They have illegally re-aged the debt, and you can sue them for it. If you can tell us who the CA is, someone can tell you how to find the addresses you need.

If you have proof that the last activity was 1991, then you have proof of their illegal re-aging of the debt, and yes, you have grounds to sue, however, the amount may be too much for small claims court in your area. You'll need to check that out.

You might try putting "attention payment processing dept" on the envelope when you send the Certified letter, I have seen on some other boards where that strategy has worked to get the scumbags to accept your letter.

[bigun]

I would suggest you go to [url]www.ftc.gov[/url] and read about your rights under the Fair Debt Collection Pratices Act. Reaging is a huge issue and is covered both in the FDCPA and, The Fair Credit Reporting Act.
Then , I'd suggest you see a lawyer. These peopel have broken Federal law. There is an excellent consumer law firm in Chicago. The web site is [url]www.edcombs.com.[/url] Click on "special" and they have a list of collection agencies they are investigating.

No, these scumbags are known as "Red Rock Capital" and also as "Mass Cap". The addresses I have for them are in Holden, Massachusetts. I searched the State of Massachusetts incorporation database and found a Red Rock Capital that was incorporated in July of this year. I thought, great, I can write to them at a different address. However, after doing so, I received a distressed phone call from a man that had just incorporated his financial consulting business as Red Rock Capital in the State of Massachusetts. Struck out on that one.

So, if anyone can find this company, I'd really appreciate it.

Secondly, I don't know that we have any proof that the last date of activity was in 1991!!! What kind of proof would suffice?? Isn't the burden of proof on them to prove that the last date of activity was in 1998 (as they claim)?

Thanks again,
Heather

[Ladynred]

I'll see if I can dig up anything on this CA.

As for proof, YES, the burden IS on them to prove it, but you have to get the scum to accept your validation demand letter first, which they are apparently rejecting.

Do you have any old credit reports, ones that were pulled prior to the re-aging ? If you have them, the fact that the debt had already dropped off the CR is usually proof enough that the SOL has expired in most (if not all) states.

You might also check with the state licensing board. CA's usually have to be either licensed or bonded to collect. I'd check there too.

[JETX]

"Isn't the burden of proof on them to prove that the last date of activity was in 1998 (as they claim)?"
Yes, but only if you challenge them to prove their claim.

My suggestions:
1) File a WRITTEN request with TransUnion to verify the debt. In your request, point out that the debt has long expired and that their failure to properly INVESTIGATE it (as required by the FCRA), will make them (TransUnion) liable for legal action.
For more on this, go to:
[url]http://www.creditinfocenter.com/eBooks/PoorMansClassActionLawsuit.shtml[/url]

2) Has this "RedRock" or "MassCap" contacted you in writing?? If so, keep all documents, including your letters to them. From your post, it sounds like they are in violation of the FDCPA (assuming that they are a 3rd party and NOT the creditor - by purchasing the debt). In either case (collector or creditor), you might consider filing a small claims action against them. If you are considering doing that, I would suggest you again read the information noted at the site above.

3) As for "RedRock" or "MassCap": I wasn't able to find anything specific for either of them.

[bigun]

You may wish to check with the MA. Secretary of State's office for incorporation info. Check with your AG and see if they are liscensed and bonded to conduct business in your state. You may also wish to file a general complaint against their business pratices with the AG in both your state and, MA.

[Ladynred]

In digging, I found that CA's in MA are regulated by the Division of Banks. You can request public information from the Division via e-mail here:

[url]http://www.state.ma.us/dob/pub_offr.htm[/url]

They should be able to tell you who they are, if they're licensed in the state and get you an address.

I have already checked with with my state (Michigan) and third party collection agencies NEED to be licensed with the state. Neither "Red Rock Capital" nor "Mass Cap" are licensed in Michigan.

Halket, until I read your posting, I was under the assumption that Red Rock did NOT need to be licensed because they are now the actual debt holder, rather than a third party collecting for someone else. But it sounds like this is not the case, correct? From what you're saying, Red Rock would be considered a third party collection company, correct?

Anyways, if I had the State of Michigan write a letter stating that neither Red Rock nor Mass Cap were licensed in my state, could I send this to Trans Union and ask them to remove the item on the credit report? Maybe hint at a possible lawsuit against TU for violating Michigan law?

I have already checked with the State of Massachusetts. Surprise, surprise, they're not licensed there either. However, they said that the debt holder does not need to be licensed in the state where they reside, only in the state where they are attempting to collect a debt.

With regards to an old credit report....I really don't think we have one. But maybe I could call up the morgage company who did our mortgage a few years ago and see if he has a copy (doubtful, but worth a shot)

If threatening Trans Union with a lawsuit based on the fact that Red Rock is not licensed does not work....then I guess I'm still stuck (unless I can locate them).

Thanks,
Heather

[JETX]

"Halket, until I read your posting, I was under the assumption that Red Rock did NOT need to be licensed because they are now the actual debt holder, rather than a third party collecting for someone else."
Response: No. A creditor (collecting their own debt - even a purchased one- in their own name does NOT need to be licensed). Michigan Statute, §445.251 - Definitions:
"(g) “Regulated person” means a person whose collection activities are confined and are directly related to the operation of a business other than that of a collection agency including the following:
(i) A regular employee when collecting accounts for 1 employer if the collection efforts are carried on in the name of the employer. "

Further, a 'collection license' is only required if they have an office in Michigan (see MCL §339.904). In your case, they would be exempt.

Michigan:
Collection Agency Licensing Requirements:
Licensing of collection agencies is governed under Article 9 of the Occupational Code Sections 339.901, et seq. (MSA 18.425, et seq.) The State of Michigan requires that any person who wishes to engage in collection business in the state must be licensed for each place of business. Qualified applicant for a collection agency manager's license or collection agency license must pass a written examination developed by the Department of of Consumer and Industry Services, and file a bond in an amount not less than $5,000 nor more than $50,000.

Collection agency license applications, and additional information available from

MICHIGAN DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES
Collection Practices Board
P. O. Box 30018
Lansing, MI 48909
Tel: 517-373-1654

Department of Consumer and Industry Services, Commercial Services, Michigan Collection Agencies GENERAL RULES Bureau of Commercial Services and Collection Practices Board offer extensive information.

"Debt collectors other than collection agencies are prohibited from using misleading or deceptive practices, using forms which simulate judicial process or government, failure to disclose identity of caller, using harassing or abusive methods to collect a debt, making calls before 8:00 a.m. or after 9:00 p.m., using profane or obscene language. Consumers may sue for damages and injunctive relief."

Michigan Collection Practices Act is found at MCL 445.251. Other useful information is available from the site of Michigan Attorney General Jennifer M. Granholm
Link: [url]http://www.michigan.gov/ag/[/url]

Link to applicable MCL (445.251): [url]http://www.michiganlegislature.org/mileg.asp?page=getObject&objName=mcl-Act-70-of-1981&highlight=[/url]

Do as I suggest and send your letter to TransUnion. They have recently been hit with some substantial fines for not following the rules and, hopefully, your letter will 'hit a chord' with them.