Contesting a debt after finding the "debt confirmation" faulty

[Vilsenhet]

Jurisdiction: California

I got a debt collection notice from a rental company that had no right to charge me. I contested the debt and they responded with the "debt confirmation". Neither of the documents they provided proved that I owe the money. What steps can I take to contest the debt after this so-called debt confirmation? Do I have to go to court?

One or two years ago I was looking at moving into an apartment. I was getting ready to sign a lease after putting in my application. I had discussed a refundable holding fee for the apartment with the agent, but never legally agreed to anything. Before a lease was even presented to me I found a better apartment. I clearly communicated this to the agent and I thought that was the end of it. Now they're telling me I still owe that holding fee. What's the procedure for contesting a debt like this? If I have to go to court, who do I take to court? Would I have to appear in person? Can these charlatans hurt my near-perfect credit if I don't hire a lawyer?

 

[adjusterjack]

What's the procedure for contesting a debt like this?

You wait until somebody sues you and then you defend.

Or, you can sue for what is called a "declaratory judgment." You would sue the owner of the building. You'd prove that you don't owe the money and the court would issue a judgment that you don't. This, unfortunately, is not something you can do in small claims court in CA. It would have to be done in regular court and you would likely spend more on an attorney than the amount of the fee.

Would I have to appear in person?

Yes.

Can these charlatans hurt my near-perfect credit if I don't hire a lawyer?

With or without a lawyer, the debt can go on your credit reports. Check all three at www.annualcreditreport.com to see if maybe it's already on them.

putting in my application.

Could there have been something on the application that obliged you to the holding fee? Don't say "no" if you don't have a copy sitting on the table in front of you. That could be their smoking gun. "Communicating" and "discussing" don't mean anything if you signed something that obligated you to the fee. Check that out.

 

[LdiJ]

Jurisdiction: California

The problem is, that even if you hire a lawyer, these "charlatans" are likely to send this debt to collections and it is likely to haunt you forever. They likely won't even take it to court, they will just pass it on from one collection agency to another lower level one and so on. If it does happen that one of them finally take you to court, you can prove that it isn't valid, but that is unlikely to happen because they know it isn't valid.

Now, that doesn't mean that you should pay it, and it doesn't mean that you should be worried about one ding on an otherwise nearly perfect credit report. It just means that you need to realistically understand that the companies who do that in the first place are scum, and have no conscience.

 

[quincy]

Did you pay an application fee? Those are typically not refundable nor are holding fees.

 

[Zigner]

A debt validation letter doesn't have to "prove" that you owe the money. It simply has to prove that they have a valid reasonable belief that you owe the money. There is very little that is actually required to be contained in a debt validation.

 

[doucar]

Also, you need to understand that under the fair debt collection practices act a debt confirmation need only state that the debt is valid. They do not have to provide proof at this point.

 

[adjusterjack]

Vilsenhet, see Section 809 of the FDCPA - Validation of debts.

Fair Debt Collection Practices Act | Federal Trade Commission (ftc.gov)

 

[LdiJ]

Did you pay an application fee? Those are typically not refundable nor are holding fees.

I think that is the problem. They wanted the OP to pay a holding fee and the OP did not do so because the OP decided against living there. So, they sent it to collections. It actually doesn't make sense to me since if the holding fee isn't paid, the unit isn't held, but hey, some landlords are wierd like that.

 

[adjusterjack]

OP wrote:

I was getting ready to sign a lease after putting in my application.

The application might have obligated him to pay the fee.

 

[quincy]

Vilsenhet said: “Neither of the documents they provided proved I owe the money.”

I am curious whether Vilsenhet signed two different documents and paid a separate application fee and a separate holding deposit fee (common) and then he canceled a check or stopped payment on a credit card charge when he decided he didn’t want to live there, or whether he signed a single document for the application and holding fee together (which would be unusual), or whether he signed nothing at all and paid nothing at all up front (which would be even more unusual, especially since to run a credit check a landlord needs signed written permission from the prospective tenant).

Charging both an application fee and a holding deposit fee would be legal but the fees cannot exceed the costs. What the necessary costs are to a landlord in processing an application and in keeping a rental off the market for a prospective tenant would not be refundable. Amounts in excess of the costs should either be refunded or deducted from the first month’s rent.

Although holding fees are typically applied to the first month’s rent when a lease is signed, a refundable portion of the fee when no lease is signed would be the amount paid by the prospective tenant minus the prorated daily rate for rent while the rental was being held off the market in anticipation of a lease being signed, plus a little additional amount allowed for the landlord’s inconvenience when the prospective tenant doesn’t rent.

Here is a link to a California law on screening (or application) fees:
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1950.6&lawCode=CIV

Vilsenhet, did you ever pay anything to the rental company? Did you ever stop payment on a charge? How much is the rental company/debt collector saying you owe?