Credit Reporting not initial communication under the FDCPA

[ICANHASMUNY?]

And yet another reason why Pro Se litigators need to do thier homework or hire it out...

 

 

NEVRIK BERBERYAN v. ASSET ACCEPTANCE, LLC Case No. CV 12-4417-CAS (PLAx).

United States District Court, C.D. California.

March 18, 2013.

Ashley Fickel, Attorneys Present for Defendants.

 

My highlights:

____

 

In opposition, plaintiff argues that defendant "communicated" with her through its alleged reporting of a debt that appeared on her credit report, but plaintiff offers no authority that supports such an expansive reading of the term "communicated." Opp'n at 6. Defendant must do something more than allegedly place notice of a disputed debt on plaintiff's credit report to trigger its disclosure duties. And even if such disclosure duties were triggered by plaintiff's letter that disputed defendant's right to collect on any debt, see 15 U.S.C. § 1692g(, plaintiff has not alleged that defendant was engaged in any "collection activities" at the time of her letter. Furthermore, plaintiff fails to allege that defendants employed any cognizable "deceptive means" in connection with the collection of any debt; there are no allegations that defendant committed any deceptive actions, other than reporting a debt to a CRA. Id. Because plaintiff alleges facts that demonstrate that defendant did not violate the Act, bare recitals of the elements of a claim under the FDCPA are not sufficient to survive defendant's motion to dismiss.

 

In support of her claims, plaintiff alleges that defendant violated section 1681s-2( (1) by "failing to conduct a proper investigation," after receiving notice from a CRA that plaintiff disputed the information in her report. FAC ¶ 31. Had defendants conducted such an investigation, plaintiff alleges that defendant would have realized they "could not collect upon [her] account." Id. Indeed, without offering "proof of the right to collect upon [a] debt" before allegedly verifying that debt for a CRA, plaintiff contends that defendant violated the FCRA. Id. ¶ 30.

The Court concludes that plaintiff fails to state a claim under the FCRA. Plaintiff fails to offer any factual allegations supporting her contention that defendant's investigation of her disputed account was unreasonable. First, there is no duty on the part of the furnisher to provide proof of its right to collect upon a debt under the plain language section 1681s-2( . As plaintiff herself alleges, she received confirmation from the CRAs that Asset had verified the account appearing on her credit report as valid. FAC ¶ 16. Plaintiff cannot attempt to impose a further requirement of "validation" in section 1681s-2( , above and beyond that of "reasonable investigation," where none exists

 

 

 

[PotO]

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

 

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

[ICANHASMUNY?]

I think it is, but the court said it wasn't.

 

credit reporting is a communication regarding a debt, and it's considered a " indirect communication" and there is federal case law to back it up.

 

but she didn't plead the case correctly or cite previous federal court rulings

 

another Pro Se who messes things up.

 

I've read so many of these on Google Scholar, Pro Se Litigants who lose because they either don't know how to correctly plead a case, and / or don't have the correct case law cites.

 

you have to have your case law in place and briefs prepared BEFORE you go to court.

 

and have your pleadings correct in light of current case law.

 

http://apps.americanbar.org/buslaw/committees/CL230000pub/materials/2011/winter/2011_confin_winter_inside_perspectives_on_debt_collection.pdf

 

you have to dispute thru the CRA's first to have a right to private action under the FCRA. for inaccurate information - there is no right for " validation" perse, just inaccuracies.

 

under the FDCPA it has to be false or misleading information reported to the CRA's .

 

 

Blanks v. Ford Motor Credit

In Blanks, the plaintiff alleged that the defendant falsely reported that he was delinquent
in paying his car payment and argued that the defendant’s reports to CRAs constituted violations
of the FDCPA. As support for its motion to dismiss, the defendant argued that the reports to
CRAs were not made "in connection with the collection of any debt" and that "simply reporting
the timeliness of payments made by plaintiff" was not a violation of the FDCPA.

the court determined that “reporting a debt to a [CRA] can be seen as a communication in connection with the collection of a debt” and that “the reporting of such a debt can subject a debt collector to liability under the FDCPA." . Sullivan v. Equifax, Inc. The court also determined that the plaintiff had alleged that the defendant’s reports to CRAs were false, and thus, had adequately pled a claim under § 1692e(8).

In Sullivan , the defendants reported to several CRAs that the plaintiff had an overdue
utility bill. The plaintiff disputed the debt both orally and in writing, but the defendants did not
alter the listing. The plaintiff asserted an FDCPA claim with all the hallmarks of a claim under §
1681s-2( of the FCRA, alleging that the defendant had furnished inaccurate information to a
CRA and failed to adequately investigate a dispute of the information sent from the CRAs. As
grounds for dismissal, the defendant argued it was not engaged in debt collection activities when
it reported the debt to the CRAs. The court disagreed with the defendant, stating that
"communication" is given a broad meaning under the FDCPA and, importantly, that "reporting a
debt to a credit reporting agency is a powerful tool designed, in part, to wrench compliance with
payment terms."29 As such, the court held that debt collectors should be subject to liability for
reporting inaccurate information, under § 1692e(8).

Finnegan v. Univ. of Rochester Med. Ctr.
In Finnegan,33 the plaintiff incurred substantial medical debts and entered into a
forbearance agreement which the hospital, which was subsequently breached when the hospital
assigned the plaintiff's account for collection. The defendants were debt collectors that reported
the alleged debt to several CRAs. The plaintiff asserted an FDCPA claim, arguing that the
defendants acted in bad faith by giving negative reports to the CRAs. In considering defendants'
motion to dismiss, the court determined that the plaintiff's complaint stated a claim because the
plaintiff had alleged that the defendants "caused derogatory information to be placed on his
credit report" in violation of § 1692e(8), "which provides that communicating or threatening to
communicate to any person credit information which is known or which should be known to be
false violates the FDCPA."34

[ICANHASMUNY?]

It's my view ( and I'm not a lawyer ) that if the JDB can't prove they own a debt, and can't or won't supply the full chain of assignments that would be required in a court of law,

 

then they can't report the debt to the CRA's . - it's false and misleading to state that someone's owes a debt to you that cannot be legally proven.

 

it should be a violation of the FCRA and the FDCPA for JDB's to report unless they have admissable legal proof.

 

most JDB's don't have this proof and when legally and concisely challenged on an ITS letter , they generally delete the reporting.

 

she didn't dispute it correctly in the first place and then jumped the gun and filed suit before researching thoroughly.

 

the cases I cited above are well known.

[cashnocredit]

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

 

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

Most people don't look at their credit reports every year, let alone every day. Most people do read their mail. Also, the purpose of placing a CA account, or any other for that matter, in a credit file is to inform other creditors and potential creditors rather than notify the consumer.

[cashnocredit]

I think it is, but the court said it wasn't.

 

credit reporting is a communication regarding a debt, and it's considered a " indirect communication" and there is federal case law to back it up.

 

but she didn't plead the case correctly or cite previous federal court rulings

 

another Pro Se who messes things up.

 

I've read so many of these on Google Scholar, Pro Se Litigants who lose because they either don't know how to correctly plead a case, and / or don't have the correct case law cites.

 

you have to have your case law in place and briefs prepared BEFORE you go to court.

 

and have your pleadings correct in light of current case law.

 

http://apps.americanbar.org/buslaw/committees/CL230000pub/materials/2011/winter/2011_confin_winter_inside_perspectives_on_debt_collection.pdf

 

you have to dispute thru the CRA's first to have a right to private action under the FCRA. for inaccurate information - there is no right for " validation" perse, just inaccuracies.

 

under the FDCPA it has to be false or misleading information reported to the CRA's .

 

 

Blanks v. Ford Motor Credit

In Blanks, the plaintiff alleged that the defendant falsely reported that he was delinquent

in paying his car payment and argued that the defendant’s reports to CRAs constituted violations

of the FDCPA. As support for its motion to dismiss, the defendant argued that the reports to

CRAs were not made "in connection with the collection of any debt" and that "simply reporting

the timeliness of payments made by plaintiff" was not a violation of the FDCPA.

the court determined that “reporting a debt to a [CRA] can be seen as a communication in connection with the collection of a debt” and that “the reporting of such a debt can subject a debt collector to liability under the FDCPA." . Sullivan v. Equifax, Inc. The court also determined that the plaintiff had alleged that the defendant’s reports to CRAs were false, and thus, had adequately pled a claim under § 1692e(8).

 

In Sullivan , the defendants reported to several CRAs that the plaintiff had an overdue

utility bill. The plaintiff disputed the debt both orally and in writing, but the defendants did not

alter the listing. The plaintiff asserted an FDCPA claim with all the hallmarks of a claim under §

1681s-2( of the FCRA, alleging that the defendant had furnished inaccurate information to a

CRA and failed to adequately investigate a dispute of the information sent from the CRAs. As

grounds for dismissal, the defendant argued it was not engaged in debt collection activities when

it reported the debt to the CRAs. The court disagreed with the defendant, stating that

"communication" is given a broad meaning under the FDCPA and, importantly, that "reporting a

debt to a credit reporting agency is a powerful tool designed, in part, to wrench compliance with

payment terms."29 As such, the court held that debt collectors should be subject to liability for

reporting inaccurate information, under § 1692e(8).

Finnegan v. Univ. of Rochester Med. Ctr.

In Finnegan,33 the plaintiff incurred substantial medical debts and entered into a

forbearance agreement which the hospital, which was subsequently breached when the hospital

assigned the plaintiff's account for collection. The defendants were debt collectors that reported

the alleged debt to several CRAs. The plaintiff asserted an FDCPA claim, arguing that the

defendants acted in bad faith by giving negative reports to the CRAs. In considering defendants'

motion to dismiss, the court determined that the plaintiff's complaint stated a claim because the

plaintiff had alleged that the defendants "caused derogatory information to be placed on his

credit report" in violation of § 1692e(8), "which provides that communicating or threatening to

communicate to any person credit information which is known or which should be known to be

false violates the FDCPA."34

The key here seems to be that the CA falsely claimed not to have triggered a collection activity when, because the consumer disputed the CA, the consumer was obviously aware of the CA's CRA entry and thus communication was occurring. The court did not rule that merely reporting a CA is always a communication but that it can be and in this case was as the information was disputed.

[cashnocredit]

 

you have to dispute thru the CRA's first to have a right to private action under the FCRA. for inaccurate information - there is no right for " validation" perse, just inaccuracies

This is really important and can't be said too often.

[PotO]

 

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

Most people don't look at their credit reports every year, let alone every day. Most people do read their mail. Also, the purpose of placing a CA account, or any other for that matter, in a credit file is to inform other creditors and potential creditors rather than notify the consumer.

Ok, I see. There have been previous posters claiming they have never received initial communication from a CA much less the dunning notice after initial communication. Without the dunning notice, the least sophisticated consumer is not aware of their rights to DV within a certain timeframe.

 

I think I also read an FTC advisory that credit reporting by a CA was a collection activity -- one that should cease if a CA cannot properly respond to a timely DV. So, if the CA never contacts you, then how can you enforce your rights to DV?

 

At least that's why I thought a tradeline by a CA could be considered an initial communication absent getting something in the mail or a phone call.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

Most people don't look at their credit reports every year, let alone every day. Most people do read their mail. Also, the purpose of placing a CA account, or any other for that matter, in a credit file is to inform other creditors and potential creditors rather than notify the consumer.

[ICANHASMUNY?]

 

 

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

Most people don't look at their credit reports every year, let alone every day. Most people do read their mail. Also, the purpose of placing a CA account, or any other for that matter, in a credit file is to inform other creditors and potential creditors rather than notify the consumer.

Ok, I see. There have been previous posters claiming they have never received initial communication from a CA much less the dunning notice after initial communication. Without the dunning notice, the least sophisticated consumer is not aware of their rights to DV within a certain timeframe.

 

I think I also read an FTC advisory that credit reporting by a CA was a collection activity -- one that should cease if a CA cannot properly respond to a timely DV. So, if the CA never contacts you, then how can you enforce your rights to DV?

 

At least that's why I thought a tradeline by a CA could be considered an initial communication absent getting something in the mail or a phone call.

 

the fact is, they report it before they attempt to contact you just to get around this

 

We'd like to see some hard case law on this, but the Prose in this case blew it.

 

http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

 

http://www.ftc.gov/os/2011/07/110720fcrareport.pdf

 

 

if they can't prove the debt in a court of law, how is it they have a persmissable purpose to even access your reports ?

[PotO]

 

 

 

 

 

 

Regarding initial communication, I believe I once saw an FTC advisory that reporting the debt to the debtor's credit report was an initial communication. Of course, an FTC advisory letter is not binding on a court.

Can you please give a little insight why you think placing a CA tradeline is or is not an initial communication?

 

Most people don't look at their credit reports every year, let alone every day. Most people do read their mail. Also, the purpose of placing a CA account, or any other for that matter, in a credit file is to inform other creditors and potential creditors rather than notify the consumer.

Ok, I see. There have been previous posters claiming they have never received initial communication from a CA much less the dunning notice after initial communication. Without the dunning notice, the least sophisticated consumer is not aware of their rights to DV within a certain timeframe.

I think I also read an FTC advisory that credit reporting by a CA was a collection activity -- one that should cease if a CA cannot properly respond to a timely DV. So, if the CA never contacts you, then how can you enforce your rights to DV?

At least that's why I thought a tradeline by a CA could be considered an initial communication absent getting something in the mail or a phone call.

the fact is, they report it before they attempt to contact you just to get around this

 

We'd like to see some hard case law on this, but the Prose in this case blew it.

 

http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

 

http://www.ftc.gov/os/2011/07/110720fcrareport.pdf

 

 

if they can't prove the debt in a court of law, how is it they have a persmissable purpose to even access your reports ?

Agree. Why should they have PP when they have nothing? In my uninformed opinion, it's just like saying someone at random owes me money when in fact I'm just using their credit report as hostage to commit extortion.

[ICANHASMUNY?]

exactly my point - she needed to plead this differently.

[BDK]

if they can't prove the debt in a court of law, how is it they have a permissible purpose to even access your reports ?

This.

[ultra2207]

ICAN- I read through the link you posted. I want your thoughts/clarification on marking accounts as disputed on a CR after a DV. They state that JDB's/CA's do NOT have to mark accounts as disputed on the CR after receiving a DV if the account was already reported. They only have to mark it as disputed if their initial reporting of the account on the CR occurs after the dispute was received and not closed yet; or any subsequent reports of the account are made while in dispute. So my understanding from reading this is if they update the account on a CR (for the next month or for whatever other reason) then they would have to note the account as disputed if it is still in the dispute process. So basically they never have to go back and update an account as disputed; they only have to mark it as disputed if they update the account on the CR after the dispute was received. Correct? I just see so many people here with complaints that the JDB/CA didn't update the account as disputed after they received their dispute letter. From what I'm reading in your link they don't have to unless they report again during the dispute process. Thanks for any help, I've been reading here 3-4 hours every day and am trying to sort out what is right and wrong before I send out any letters.

 

 

sent via tapatalk

[ICANHASMUNY?]

no, you're misreading

 

if they haven't responded to the dispute letter with validation, they are not supposed to report it, or continue reporting it.

 

Is it permissible under the FDCPA for a debt collector to report, or continue to report, a consumer's charged-off debt to a consumer reporting agency after the
debt collector has received, but not responded to, a consumer's written dispute during the 30-day validation period detailed in § 1692g?"

 

As you know, Section 1692g( requires the debt collector to cease collection of the debt at issue if a written dispute is received within the 30-day validation period until verification is obtained. Because we believe that reporting a charged-off debt to a consumer reporting agency, particularly at this stage of the collection process, constitutes "collection activity" on the part of the collector, our answer to your question is No ( it's not permissable )

[cashnocredit]

The problem Berberyan had was making the wrong claim. Indirect communication was established when the CA places an account in the CRA file AND the consumer discovers this and initiates a dispute with the CRA. At that point communication of the debt, even though indirect, has occurred. The CA is trying to act like they have no obligation to validate a debt as if the consumer hadn't been initially notified which is pretty disingenuous.

[ICANHASMUNY?]

YES - and the fact is , most times the JDB/CA is aware of the consumer's current address because it's on file with the CRA's .

 

and they monitor consumers reports for activity, so a new address would be noticed, if the one shown on the report was old.

 

 

So, they purposefully fail to contact, park the debt on the consumers' reports.

 

send letters to old addresses, send court notices to old addresses and are awarded default judgments.

 

only after they have the judgment in hand do they make any attempt to contact the consumer ....

 

it's more than disingenuous.

 

 

 

and then it's a little late for validation -

 

and if they have to hire a lawyer, most times it would cost the consumer more to fight it than to simply pay it.

[ICANHASMUNY?]

She had the common misconception that a FCRA dispute proccess and verification thru E Oscar is one and the same as requesting validation under the FDCPA.

 

and didn't seen to clearly invoke the FDCPA in letters to the JDB's

 

She needed to go a few steps further using the " DV letter to JDB's on your reports" in the sample letter forum. ( a variation of the unknnown debt letter. )

 

and if they didin't respond, then they would have had to stop reporting pursuant to the Cass letter above.

 

if they did respond with FDCPA validiation, then she could have continued the dispute, using the strategies listed in the pinned topics and/ or on legal grounds regarding ownership and the assignment of the account.

 

the JDB's treated her letter as a 623b dispute, and responded with thier std form letters.

 

 

Plaintiff believes, however, that her accounts are still owned and controlled by HSBC and AMEX, respectively, and therefore alleges that these accounts are being falsely reported on her credit reports. Id.

 

¶¶ 12-13. Therefore, on December 1, 2011, plaintiff submitted written disputes to the CRAs disputing the existence, ownership, and accuracy of the above referenced accounts. Id. ¶ 14.

 

She further requested that the CRAs provide verification and reinvestigate these purportedly disputed accounts. Id.

 

On December 13, after the CRAs reported back to plaintiff that the debt accounts were valid, plaintiff sent letters of dispute with a verification request to each defendant directly. Id. ¶ 16.

 

On or about February 24 and March 15, 2012, plaintiff sent second and third dispute letters to Asset and the original owner of the account, HSBC, requesting that each prove their ownership over a valid debt, as well as evidence of their legal right to collect the disputed debt. Id. ¶ 18.

On March 21, 2012, defendant Asset responded to plaintiff, indicating that Asset was "presently unable to determine the nature of your dispute. We will update our trade line regarding the account is `disputed' with the consumer reporting agencies." FAC Ex. C; id. ¶ 23.

 

This response led plaintiff to believe that Asset lacked documentation demonstrating that it had a right to collect upon the HSBC account, and that it had "validated" this account with the CRAs without a legal justification for doing so. Id. ¶ 24.

 

As of a December 18, 2012, credit report from Experian, Asset continues to report the HSBC account on plaintiff's credit report. FAC Ex. D. This report also states that the "Account information [is] disputed by consumer." Id.

 

 

 

this is where she made her mistake -

In opposition, plaintiff argues that defendant "communicated" with her through its alleged reporting of a debt that appeared on her credit report, but plaintiff offers no authority that supports such an expansive reading of the term "communicated."

 

she didn't cite Sullivan V. Equifax and additonaly claim that the information reported by asset was somehow incorrect or misleading under the FDCPA.

 

The court disagreed with the defendant, stating that "communication" is given a broad meaning under the FDCPA and, importantly, that "reporting a debt to a credit reporting agency is a powerful tool designed, in part, to wrench compliance with payment terms."29 As such, the court held that debt collectors should be subject to liability for reporting inaccurate information, under § 1692e(8).