Debt validation vs. proof

[Skapare]

I am in West Virginia.

What I would like to know is what constitutes a validation of a debt. Is it merely identification of a debt, or is more information required in the case of a debt buyer proving they now own the debt? How does one protect against a case of a bad collection agency that happens to have access to the debt information (maybe because they once had the debt placed with them in a CA role, or maybe because that information can be obtained in other ways)? In what form would proof of being the new owner of a debt be?

 

[TigerD]

I am in West Virginia.

What I would like to know is what constitutes a validation of a debt. Is it merely identification of a debt, or is more information required in the case of a debt buyer proving they now own the debt? How does one protect against a case of a bad collection agency that happens to have access to the debt information (maybe because they once had the debt placed with them in a CA role, or maybe because that information can be obtained in other ways)? In what form would proof of being the new owner of a debt be?

While most CAs provide more, legal validation consists only of the name ans address of the original creditor. You will never get proof of who owns the debt short of discovery.

DC

 

[Skapare]

While most CAs provide more, legal validation consists only of the name ans address of the original creditor. You will never get proof of who owns the debt short of discovery.

DC

So you are saying, as a practice, a debt buyer would not provide any proof that they bought the debt until it goes to court (and the discovery is made)? What would be the reason for this? The cost of doing it?

 

[wnbama]

FDCPA Section 809. Validation of debts [15 USC 1692g]
(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.

 

[Debt Guy]

What would be the reason for this? The cost of doing it?

Yes, mostly. Also, most CA/DB consider validation disputes as nothing more than delay tactics and are not going to put any more effort into the response that the absolute minimum.

 

[Skapare]

What would be the reason for this? The cost of doing it?

Yes, mostly. Also, most CA/DB consider validation disputes as nothing more than delay tactics and are not going to put any more effort into the response that the absolute minimum.

So how hard is it for a DB (assuming in the simple case they are the CA, too, which I guess is the usual case) to provide this proof that they own the debt? Can they not just send a photocopy of the bill of assignment?

I had a case of this once. An apparent DB, that appeared to be a CA, out of the blue sued me for a debt the original creditor was not communicating about. The DB/CA never communicated with me, either. I replied to the summons challenging the debt and demanded discovery of the proof of ownership. I didn't want the OC coming back to me later, when they decide to start dealing with the debts they have, and claiming I owe them and not some shyster CA that claims they owned that debt.

And its not the first OC that has refused to accept payment simply because they have placed an account with a CA or in one case, lost their records.

I know someone who had 3 CAs trying to collect the very same debt at the same time. Which one should she have paid? I told her to just send the C&D and only deal with whoever owns the debt. If it turns out someone had bought the debt, she would need to know the absolute truth of that. That was on my mind in this case, and is now always on my mind for any CA activity. There are too many shysters CAs out there.

 

[Skapare]

FDCPA Section 809. Validation of debts [15 USC 1692g]
(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.

If the law describes "name and address of the original creditor" seperate from "verification", then I guess we need a clearer definition of what verification is.

And does this part of the law apply to debt buyers who are then the debt owner? Maybe another part applies to debt buyers and requires more of them?

Any entity that knows stuff like the original creditor (name, address, and maybe other info), the original account number, the amount of the account, the debtor name, address, and SSN ... is only proving they know this. Knowing it does not prove they have a right to collect the debt. Knowing it does not prove they have bought the debt (if that's what they are claiming). A non-CA may have acquired the information improperly/illegally and are running illegal operations to skim some money off naive people then disappear before they get caught. Or it might be a one-time CA that isn't a CA anymore, but still has copies of the data. Or it might be a CA that isn't managing their information well and no longer has the account, but didn't clean expired accounts from their database and are still trying to collect on them. Or maybe they intermingled between their collection accounts and purchased accounts.

 

[Debt Guy]

So how hard is it for a DB (assuming in the simple case they are the CA, too, which I guess is the usual case) to provide this proof that they own the debt? Can they not just send a photocopy of the bill of assignment?

You are missing the point. In truth, most of these games are delay tactics. And, yes, it costs money to provide "proof". Collecting is a business. They are not going to spend money for "proof" until and unless they need it for court -- by which time it is too late.

If the law describes "name and address of the original creditor" seperate from "verification", then I guess we need a clearer definition of what verification is.

The FTC tried its best to avoid definitions. The courts have on several occasions piddled with validation and succeeded in making things more confusing as there are court decisions all over the board and they even conflict with each other. The FTC Wollman Opinion Letter is the closest you can get to defining verification.

And does this part of the law apply to debt buyers who are then the debt owner? Maybe another part applies to debt buyers and requires more of them?

There is only one FDCPA. It applies to contingency collection agencies and to debt buyers.

Any entity that knows stuff like the original creditor (name, address, and maybe other info), the original account number, the amount of the account, the debtor name, address, and SSN ... is only proving they know this.

Back in days of yore, when the FDCPA was written and gasoline cost 50 cents a gallon, that is exactly what Congress intended the validation provision to be. It was the stated intent of Congress to create this procedure to allow a consumer to address this a very elementary precursor to identity theft. Over the years, the debt dodgers of the world have morphed validation to be a stall tactic.

Knowing it does not prove they have a right to collect the debt.

The CA or DB has no obligation to prove such until and unless you are in the discovery stage of litigation.

Knowing it does not prove they have bought the debt (if that's what they are claiming). A non-CA may have acquired the information improperly/illegally and are running illegal operations to skim some money off naive people then disappear before they get caught. Or it might be a one-time CA that isn't a CA anymore, but still has copies of the data. Or it might be a CA that isn't managing their information well and no longer has the account, but didn't clean expired accounts from their database and are still trying to collect on them. Or maybe they intermingled between their collection accounts and purchased accounts.

None of that means anything in the context of a consumer exercising their rights under the FDCPA. Such issues as you raise are not governed by the FDCPA and were never intended to be governed by the FDCPA.

I am not suggesting that one act foolishly. There are other ways to determine the status of the debt. Refusing to pay one's debt until the CA proves they have the right to collect the debt is a good way to run headlong into a summons. I encourage consumers to stay out of the courtroom if at all possible as anything good is a rare event.

 

[Skapare]

So how hard is it for a DB (assuming in the simple case they are the CA, too, which I guess is the usual case) to provide this proof that they own the debt? Can they not just send a photocopy of the bill of assignment?

You are missing the point. In truth, most of these games are delay tactics. And, yes, it costs money to provide "proof". Collecting is a business. They are not going to spend money for "proof" until and unless they need it for court -- by which time it is too late.

It is not too late. The lawsuit in court can simply be challenged on the basis that the defendant has no known relationship with the plaintiff, and that if the plaintiff has this proof, they could have produced this proof before wasting the court's time. The defendant would be in a better position for this argument if they communicated in writing a need for this proof in response to any communication from the supposed-DB that is attempting to collect. Of course this presumes the supposed-DB communicates directly before going to court. Apparently not all DBs do this. Apparently some try to get default judgements up front.

If the law describes "name and address of the original creditor" seperate from "verification", then I guess we need a clearer definition of what verification is.

The FTC tried its best to avoid definitions. The courts have on several occasions piddled with validation and succeeded in making things more confusing as there are court decisions all over the board and they even conflict with each other. The FTC Wollman Opinion Letter is the closest you can get to defining verification.

Then the "no known business relation" argument (not part of FDCPA) would be used.

And does this part of the law apply to debt buyers who are then the debt owner? Maybe another part applies to debt buyers and requires more of them?

There is only one FDCPA. It applies to contingency collection agencies and to debt buyers.

But the FDCPA is not the only law around.

Any entity that knows stuff like the original creditor (name, address, and maybe other info), the original account number, the amount of the account, the debtor name, address, and SSN ... is only proving they know this.

Back in days of yore, when the FDCPA was written and gasoline cost 50 cents a gallon, that is exactly what Congress intended the validation provision to be. It was the stated intent of Congress to create this procedure to allow a consumer to address this a very elementary precursor to identity theft. Over the years, the debt dodgers of the world have morphed validation to be a stall tactic.

It may very well be that the practice of debt collectors/buyers was to not even identify debts, back then. And so the FDCPA could have been written in just that light. Maybe we need an upgrade to the FDCPA now. Or maybe other existing laws are sufficient.

Knowing it does not prove they have a right to collect the debt.

The CA or DB has no obligation to prove such until and unless you are in the discovery stage of litigation.

And that creates the interesting dilemma. Without such proof, the diligent consumer would not know that any negotiation or payment to this entity making such a claim would really be applicable to any debt. The OC is not obligated to consider any payment to any entity they did not authorize as credited toward the debt they own.

Knowing it does not prove they have bought the debt (if that's what they are claiming). A non-CA may have acquired the information improperly/illegally and are running illegal operations to skim some money off naive people then disappear before they get caught. Or it might be a one-time CA that isn't a CA anymore, but still has copies of the data. Or it might be a CA that isn't managing their information well and no longer has the account, but didn't clean expired accounts from their database and are still trying to collect on them. Or maybe they intermingled between their collection accounts and purchased accounts.

None of that means anything in the context of a consumer exercising their rights under the FDCPA. Such issues as you raise are not governed by the FDCPA and were never intended to be governed by the FDCPA.

I am not suggesting that one act foolishly. There are other ways to determine the status of the debt. Refusing to pay one's debt until the CA proves they have the right to collect the debt is a good way to run headlong into a summons. I encourage consumers to stay out of the courtroom if at all possible as anything good is a rare event.

I'm not claiming that this applies under the FDCPA.

I always recommend that people pay debts ONLY to the known OC, or to a CA that they can verify that the known OC actually authorized. I always recommend that no such payments ever be made to any other party. The question I'm trying to get answered right now is how to determine if someone claiming to be so is the actual authorized CA or the actual owner DB. The FDCPA does not appear to have any provision for this. Maybe that needs to be added in an upgrade to that law. Or maybe some existing law is sufficient.

If the 1st OC sells a debt to the 2nd OC, and the 1st OC sends a letter to the debtor indicating this sale has taken place, with identification of the 2nd OC, and the debtor contacts the 1st OC (the only one they know to be an OC) to verify that the letter was not a forgery sent by a SA, then that probably would be sufficient to establish the business relationship between the debtor and the 2nd OC. Likewise if that letter comes from the 2nd OC, and the debtor gets verification of this sale from the 1st OC, it can be the same. The key here is that the debtor contact the 1st OC directly (to bypass any SA) because the 1st OC is the only authority known to the debtor at this point in time.

One problem with this is that many OCs do not communicate this way, or do not provide a means for this kind of verification of the 2nd OC. So what I am looking for are other means to verify that the 2nd OC is now a true OC (their say-so being insufficient).

 

[Debt Guy]

I cannot tell if you just don't get it -- or, if this is an interesting rhetorical discussion -- or, if you are one of those who wants to stubbornly refuse to say that you were wrong in your original premise.

The question I'm trying to get answered right now is how to determine if someone claiming to be so is the actual authorized CA or the actual owner DB.

There is a way. It requires effort and persistence on the part of the consumer. You contact the OC and ask to whom the debt was sold. You contact that DB and ask if they still have it. If yes, fine. If not, who did they sell it to.

If you really really want to know, there is a way.

If you wish to pay or settle the debt, it is common to have a written agreement wherein the creditor party affirms they own the debt or otherwise has the consent of the owner to act on their behalf. It it turns out they lie, then you have a serious tort action and the attention of the FTC, AG, Inspector General of the USPS for mail fraud, etc.

The FDCPA does not appear to have any provision for this.

Indeed, it does not. The language of the FDCPA is plain and clear -- name and address of the OC. Period.

Maybe that needs to be added in an upgrade to that law.

Take it up with your congressweasel. I have given the FTC my list of 10 suggested changes to the FDCPA. Have you?

Or maybe some existing law is sufficient.

And that would be?

The lawsuit in court can simply be challenged on the basis that the defendant has no known relationship with the plaintiff, and that if the plaintiff has this proof, they could have produced this proof before wasting the court's time. The defendant would be in a better position for this argument if they communicated in writing a need for this proof in response to any communication from the supposed-DB that is attempting to collect.

Challenge is easy. I don't agree as to the value of "better position for the argument". Exactly what do you think the judge is going to do?

Consumer: Your Honor, I asked them to prove to me they owned the debt and they refused to do so.

Judge: OK. You've conducted discovery and the proof is now evident.

Consumer: Yes, but they deserve to be punished for not telling me what I asked.

Judge: Where in the statutes does it say that?

Consumer: Ummmm. I think somewhere in the Old Testament. Besides, they wasted the court's time.

Judge: Seems to me that both parties have wasted the court's time. The Plaintiff has submitted clear evidence of the Defendant's liability for the debt and the proper ownership rights for the debt. Judgment in favor of the Plaintiff. See the Clerk on the way out. Plaintiff's Attorney to submit the appropriate paperwork for signature.

Plaintiff Attorney: Your Honor, can we proceed today to asset discovery?

Judge: Sure, go out in the hallway and conduct your business.

Consumer: Judge, that ain't fair.

Judge: Sir/Ma'am, fair is a place you take a pig to win a ribbon. This is a court of law and I am bound to follow the letter of the law regardless of my personal feelings about the facts. Do I think the Plaintiff should have volunteered the information you asked for? Yes. Does it make a difference in my ruling? No. Why not? Because the law does not require or allow me to take that fact into consideration.

You cynicism is respected. Your approach can be dangerous. If a consumer follows your path, they can easily find themselves on the wrong end of a summons. If that is your goal, fine. Personally, my bias is to stay out of the courtroom as very little good ever happens in that forum.

In the business world we use the term "acid test". An acid test is a quick and simple way to determine the viability of a premise with a high degree of confidence in the result. There is an "acid test" for almost any legal question:

If I take my story to a consumer rights attorney and the attorney takes the case on a contingency basis -- it is a winner. If the attorney agrees to take the case and wants an upfront fee from the consumer, then the premise has enough flaws to cause the attorney to have serious reservations as to the outcome. If the attorney refuses to get involved .... well, it is a dead loser.​

Try that sometime and see how it works.

 

[Skapare]

I cannot tell if you just don't get it -- or, if this is an interesting rhetorical discussion -- or, if you are one of those who wants to stubbornly refuse to say that you were wrong in your original premise.

What do you think the original premise is? I asked questions because I am trying to find out possible variations on how one can come to know whether or not the party claiming to be the DB or the CA is in fact real.

I do know that merely claiming to be one provides no such knowledge of such. Anyone can make such a claim.

The question I'm trying to get answered right now is how to determine if someone claiming to be so is the actual authorized CA or the actual owner DB.


There is a way. It requires effort and persistence on the part of the consumer. You contact the OC and ask to whom the debt was sold. You contact that DB and ask if they still have it. If yes, fine. If not, who did they sell it to.

If the OC is not communicating (because any of a number of reasons, including gone out of business) then that is one option not readily available. The remaining party to contact is the one claiming to be the DB. And it seems from posts here that DBs are not willing to prove they are debt buyers. One of the things I want to know is to what degree this unwillingness is because of some cost in providing this proof, or is because of the preference of the DB to push the matter into court instead of dealing with it before court.

Even when it is possible to discover the legitimacy of the DB outside of what the DB says, this can often take a lot of time to do. It could take a lot more time than a legitimate DB would be willing to wait. This would be seen as a "delay tactic" even more so than the debtor asking the DB to simply show proof (which a legitimate DB can do as quickly as this so call "verification" which is nothing more than mere identification).


If you really really want to know, there is a way.

If the new owner really really wants to collect on it, then prove they are the true owner and proceed to demand payment.


If you wish to pay or settle the debt, it is common to have a written agreement wherein the creditor party affirms they own the debt or otherwise has the consent of the owner to act on their behalf. It it turns out they lie, then you have a serious tort action and the attention of the FTC, AG, Inspector General of the USPS for mail fraud, etc.

This is not adequate protection. If this is a scam, it means the money involved is lost. It means the debtor has to now sue to recover. And this suit is pointless if the debtor was a scam artist who has now disappeared.


The FDCPA does not appear to have any provision for this.

Indeed, it does not. The language of the FDCPA is plain and clear -- name and address of the OC. Period.

Actually, it says BOTH. Name and address of the OC is required, and verification is required. I don't see a definition of what verification is. But if is was understood to mean that it is the same as name and address, then why would the writer of the law specify both?

But this also goes beyond the FDCPA. Other laws apply, too. Figuring out how to apply what laws is part of my inquiry. But I'm obviously not going to get useful information from someone that things all people should just pay everything anyone asks them to pay.


Maybe that needs to be added in an upgrade to that law.

Take it up with your congressweasel. I have given the FTC my list of 10 suggested changes to the FDCPA. Have you?

I'm working on it. This is one of the reasons I posted the question. I want to find out any possible way a DB could prove this. If they can do it in court, they can do it before court. So why would a DB want to wait for court for this?

My suggestions, whether to Congress or FTC, will include something in this area if I do not find there to be any existing means (and it does not have to be within FDCPA) a DB can do this.


Or maybe some existing law is sufficient.

And that would be?

That would be something I am trying to find out.


The lawsuit in court can simply be challenged on the basis that the defendant has no known relationship with the plaintiff, and that if the plaintiff has this proof, they could have produced this proof before wasting the court's time. The defendant would be in a better position for this argument if they communicated in writing a need for this proof in response to any communication from the supposed-DB that is attempting to collect.

Challenge is easy. I don't agree as to the value of "better position for the argument". Exactly what do you think the judge is going to do?

I don't know what the judge will do, yet. But I have talked with a lawyer that said that typical judges frown on cases brought before the court that really didn't need to be brought before the court.


Consumer: Your Honor, I asked them to prove to me they owned the debt and they refused to do so.

Judge: OK. You've conducted discovery and the proof is now evident.

Consumer: Yes, but they deserve to be punished for not telling me what I asked.

Judge: Where in the statutes does it say that?

Consumer: Ummmm. I think somewhere in the Old Testament. Besides, they wasted the court's time.

Judge: Seems to me that both parties have wasted the court's time. The Plaintiff has submitted clear evidence of the Defendant's liability for the debt and the proper ownership rights for the debt. Judgment in favor of the Plaintiff. See the Clerk on the way out. Plaintiff's Attorney to submit the appropriate paperwork for signature.

Plaintiff Attorney: Your Honor, can we proceed today to asset discovery?

Judge: Sure, go out in the hallway and conduct your business.

Consumer: Judge, that ain't fair.

Judge: Sir/Ma'am, fair is a place you take a pig to win a ribbon. This is a court of law and I am bound to follow the letter of the law regardless of my personal feelings about the facts. Do I think the Plaintiff should have volunteered the information you asked for? Yes. Does it make a difference in my ruling? No. Why not? Because the law does not require or allow me to take that fact into consideration.

You just wasted some time presenting an unreal scenario. Maybe it's because you don't yet understand the issue.


You cynicism is respected. Your approach can be dangerous. If a consumer follows your path, they can easily find themselves on the wrong end of a summons. If that is your goal, fine. Personally, my bias is to stay out of the courtroom as very little good ever happens in that forum.

I'd like to keep things out of the courtroom as well. And I think a requirement added to the FDCPA that mandates a DB to show this proof when requested by the debtor would help do just that. It would be better if it were a common DB practice do this anyway. That would help distinguish a real DB from a SA. It would ensure that consumers can practice due diligence in a world of many SAs and still pay their real debts. I don't want them to be throwing money away to SAs.


In the business world we use the term "acid test". An acid test is a quick and simple way to determine the viability of a premise with a high degree of confidence in the result. There is an "acid test" for almost any legal question:

If I take my story to a consumer rights attorney and the attorney takes the case on a contingency basis -- it is a winner. If the attorney agrees to take the case and wants an upfront fee from the consumer, then the premise has enough flaws to cause the attorney to have serious reservations as to the outcome. If the attorney refuses to get involved .... well, it is a dead loser.​

That is entirely bogus. An attorney is interested in the case on a contingency basis ONLY if there is a sufficient reward. That is a combination of the merits of the case AND the merits of obtaining a judgement collection from the other party. In cases where the goal is to simply quash a case brought falsely, there may or may not also be cause to obtain a counter judgement. If the goal is to do no more than have the case quashed or dismissed, then an attorney is only going to take such a case if their client is willing to pay for it.

 

[Debt Guy]

I give up. You don't want answers. You want to argue.

So, I'll just say one last time as clearly as I can.

There is no federal law that requires a creditor to surrender their internal documents to you outside of discovery. Maybe there oughta be -- but there ain't. We have 500 years of legal precedent that says to me there is not going to be a change.

If you want to go to court, help yourself. Keep in mind that the courtroom is not a place to seek justice. Our legal structure is based on an adversarial system. That means the other side exists solely to stick a knife in your throat. The judge is not there to make sure you receive justice or fairness -- the judge is a referee and a decider of facts placed before him/her and then only within the parameters of state and federal law.

Good luck to you.

 

[Skapare]

I give up. You don't want answers. You want to argue.

So, I'll just say one last time as clearly as I can.

There is no federal law that requires a creditor to surrender their internal documents to you outside of discovery. Maybe there oughta be -- but there ain't. We have 500 years of legal precedent that says to me there is not going to be a change.

If you want to go to court, help yourself. Keep in mind that the courtroom is not a place to seek justice. Our legal structure is based on an adversarial system. That means the other side exists solely to stick a knife in your throat. The judge is not there to make sure you receive justice or fairness -- the judge is a referee and a decider of facts placed before him/her and then only within the parameters of state and federal law.

Good luck to you.

You seem to have a pretty distorted view of the legal system.

I've seen quite a number of court cases. Most of them were under one judge who was an uncle of mine. All of them I have seen don't resemble those TV judges at all. While there is an adversarial nature about cases, the judge doesn't always treat it that way. Many judges (my uncle being one of them) tried to figure out how to get the parties to come to agreement. If he was alive today I'd already have asked him about the things I'm asking here.

One more hint you need to get: just because something is not required does not mean it cannot be made available. And just because it isn't in the FDCPA doesn't mean it is nowhere else.

I want to solve a problem, not argue. You didn't seem to care to help solve it. OTOH, that does seem to be a common attitude among debt collector types.

 

[itsjustme1]

If I were the OP, I would take what some of these people say with a grain of salt. i always debt validate and if they send me some crap response I demand more or a deletion from ym credit report. It works if you follow through.

Also I won $1,000 form a collector because I debt validated with return receipt and the collector still reported it to my credit report which is a no no..