Validation as we know it, is wrong?

[Jazkal]

I've brought this topic up in a number of places, and can't get a good answer. I have learned by reading a lot in different forums, and one of the given "facts" that I learned was that a CA whom you've sent a "validation" request must provide a copy of the signed contract, and an itemized listing of the entire account history.

 

Well, while I was preparing for my future court battles, I was looking for the case law to back up that common "fact". Well I can't seem to find any in support of that "fact", just the opposite, the only recent Federal case law I can find states just the opposite.

 

Let me start off by listing the case law that supports CA's:

 

CHAUDHRY, v. GALLERIZZO, states that all is required is a note from the CA stating, yes the consumer owes this debt. And this is not the case law we as consumers want to be quoting from when we ask for validation.

 

I have had others bring up some other cases in support of our side:

 

SPEARS, v. BRENNAN, Is a good case in the consumers favor, the only problem with it is that it is a State of Indiana case, and as such, doesn't apply to most of us, or at least those that live in the other 49 states.

 

The only one I've seen that even comes close is Coppola v. Arrow Financial Services. But this is mainly limited to what is allowed in the Discovery process. Still this is good, because you can use it as a guide for Discovery if you follow through with a lawsuit. And the CA probably won’t be able to provide proof of the debt.

 

And we also have the FTC opinion letter to Wollman, which is 11 years old, and discusses what isn't considered "verification". So by itself doesn't really explain what is considered "verification", just what isn't.

 

If I have missed some major or minor case, please let me know. From what I've seen, the only Federal case that specifically addresses what is or isn't "validation" is the one that favors the CA. I really hope I've missed something. Any comments or discussions are welcome.

[keepmine]

Welll, to muddy the water some more. What if you're an Il resident and need to know if the amount of interest being charged complies with Il. usury law per, this recent federal court decision? You need more than a printout to make a determination.

 

One of our complaints alleging that a bad debt buyer is not entitled to charge more than 9% interest (with an agreement so providing) or 5% (without an agreement) in Illinois was upheld on February 26, 2004 by Judge Darrah in federal district court in Chicago. Shanahan v. Porick, 03 C 7211 (N.D.Ill.). This involved an Asset Acceptance debt. Bad debt buyers routinely attempt to charge the same amount as the original creditor, even though the original creditor had a charter or license entitling it to charge "supervised" rates and the bad debt buyer does not. The effect is that a lot of what is claimed is not owed, and Interest Act or FDCPA penalties may offset some or all of the alleged debt.

 

The theory is also good in Indiana but there the rate is 21%.

 

EDELMAN, COMBS & LATTURNER, LLC

120 S. LaSalle Street, 18th floor

Chicago, Illinois 60603-3403

(312) 739-4200

(800) 644-4673

(312) 419-0379 (FAX)

Email: edcombs@aol.com

[SassyinAz]

I've brought this topic up in a number of places, and can't get a good answer. I have learned by reading a lot in different forums, and one of the given "facts" that I learned was that a CA whom you've sent a "validation" request must provide a copy of the signed contract, and an itemized listing of the entire account history.

 

Well, while I was preparing for my future court battles, I was looking for the case law to back up that common "fact". Well I can't seem to find any in support of that "fact", just the opposite, the only recent Federal case law I can find states just the opposite.

 

Let me start off by listing the case law that supports CA's:

 

CHAUDHRY, v. GALLERIZZO, states that all is required is a note from the CA stating, yes the consumer owes this debt. And this is not the case law we as consumers want to be quoting from when we ask for validation.

 

I have had others bring up some other cases in support of our side:

 

SPEARS, v. BRENNAN, Is a good case in the consumers favor, the only problem with it is that it is a State of Indiana case, and as such, doesn't apply to most of us, or at least those that live in the other 49 states.

 

The only one I've seen that even comes close is Coppola v. Arrow Financial Services. But this is mainly limited to what is allowed in the Discovery process. Still this is good, because you can use it as a guide for Discovery if you follow through with a lawsuit. And the CA probably won’t be able to provide proof of the debt.

 

And we also have the FTC opinion letter to Wollman, which is 11 years old, and discusses what isn't considered "verification". So by itself doesn't really explain what is considered "verification", just what isn't.

 

If I have missed some major or minor case, please let me know. From what I've seen, the only Federal case that specifically addresses what is or isn't "validation" is the one that favors the CA. I really hope I've missed something. Any comments or discussions are welcome.

Validation isn't black and white, nor can it be, Jazkal.

 

You wouldn't need a contract, if you didn't dispute the amount of the debt, terms of the agreement (interest and the like), or whether you in fact had an agreement at all.

 

You wouldn't need anything to identify you, if you didn't dispute it was your debt.

 

You wouldn't need a contract, if it was a charge account and there were signed charge slips saying you agreed with each purchase.

 

The combinations are endless, and all depend on the position you are maintaining. You will never find a case that says what validation is or isn't, nor will there ever be one, it is contract law in essence and where there is an issue of material fact (that you create by your focus or lack thereof) a court decides.

 

Pretty much, it isn't about validation at all, it's contract law -- and, what it takes to prove there was a contract; that you agreed to pay; the terms of the contract so you can determine the total amount due; an itemization following the terms with a total amount due; and, authority of the CA to collect.

 

Here's this recent thread on the same: http://www.creditboards.com/phpBB2/viewtop...der=asc&start=0

 

Chaudhry is a CA's fave case to quote and you really have to read the entire case and not take it out of context -- importantly, the Plaintiff and Attorney were both sanctioned by the court for bringing forward a case without merit. The court said: "...Given the substantial justification for its finding, the district court did not abuse its discretion by imposing what we believe to be appropriate and reasonable sanctions against Appellants and their attorney. By so ruling, we in no way intend to discourage the legitimate pursuit of FDCPA litigation but, rather, hope to deter groundless claims like the one advanced here. " Yeah, I know the CA's never mention that part of the case, don't have to wonder why for too long ;-)

 

Further, it is about verification of legal fees, which fell under portions of state law -- it wasn't the debt itself, but the amount of legal fees and whether legal fees could be collected.

 

The CA's only quote this portion of the case:

 

"...Contrary to Appellants' contention, verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. See Azar v. Hayter , 874 F.Supp. 1314, 1317 (N.D. Fla.), aff'd , 66 F.3d 342 (11th Cir. 1995), cert. denied , 516 U.S. 1048 (1996)."

 

The entire paragraph which includes what is relevant to validation is missing:

 

Contrary to Appellants' contention, verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt. See Azar v. Hayter , 874 F.Supp. 1314, 1317 (N.D. Fla.), aff'd , 66 F.3d 342 (11th Cir. 1995), cert. denied , 516 U.S. 1048 (1996). Consistent with the legislative history, verification is only intended to "eliminate the ... problem of debt collectors dunning the wrong person or attempting to collect debts which the consumer has already paid." S. Rep. No. 95-382, at 4 (1977), reprinted in 1977 U.S.C.C.A.N. 1695, 1699. There is no concomitant obligation to forward copies of bills or other detailed evidence of the debt.

 

The bolded part, is validation, and what the point and purpose of the section is, and, it all depends on what you are claiming. Of course, the CA isn't required to keep the records, that is why they must get them from the OC and forward them to the consumer. Importantly, this is left out as well, note what had already been provided as verification:

 

"...In the present case, Gallerizzo, after receiving assurances from NationsBank that the sums were owed, verified the debt amounts in his January 18th letter to Plaintiffs' counsel and forwarded a copy of the bank's computerized summary of the Chaudhrys' loan transactions. The summary included a running account of the debt amount, a description of every transaction, and the date on which the transac- tion occurred. See Graziano v. Harrison , 950 F.2d 107, 113 (3d Cir. 1991) (holding that computer printouts which confirmed amounts of debts, the services provided, and the dates on which the debts were incurred constituted sufficient verification). Thereafter, in a January 19th letter to counsel, Gallerizzo restated the amount of the inspection fees and indicated that the amounts were correct. Nothing more is required. "

 

The Chaudhry court bases that determination on Graziano v. Harrison , 950 F.2d 107, 113 (3d Cir. 1991) (holding that computer printouts which confirmed amounts of debts, the services provided, and the dates on which the debts were incurred constituted sufficient verification). Important as well, both of these cases are too old and were before the amendments to the FCRA imposing requirements on furnishers of information and providing a cause of action for consumers to enforce them.

 

The FTC referred to the case prior to the amendments, what is notable about the case (beyond what the CA's insist they are about) is that the court held that the initial 30-day period was a grace period -- we know that is no longer true.

 

The FTC in it's 1997 and 1998 reports to the House of Representatives say this about that case:

 

Two federal courts of appeals decisions have strongly implied that the thirty-day period is a firm grace period, making a demand for payment within the first thirty days impermissible. Graziano v. Harrison, 950 F.2d 107, 111-13 (3d Cir. 1991); Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1226 (9th Cir. 1988).(27) The Commission considers this interpretation erroneous.

 

Graziano isn't even available online, due to its age, the court's opinions begin in 1994.

 

The Wollman letter does state what the purpose of validation is and importantly explains why what was provided wasn't verification -- Ditto for the Spears v Brennan case, it says a contract alone isn't verification and goes on to explain why.

 

It is the whys in the explanations that are important, as is, what you are claiming and where your focus has to stay.

 

Is it not yours and/or is the amount being dunned incorrect -- what is required to prove either, depends fundamentally on that question.

 

See this thread too:

http://www.creditboards.com/phpBB2/viewtop...der=asc&start=0

 

What is important about these cases is to show you where your focus needs to be and where it has to stay. If you raise an issue and they have no proof, you'll never get a ruling against you. If you raise an issue and help them along by admitting or giving them your proof, then you'll be helping the court decide without them having to produce a thing.

 

Sassy

[thestudentisready]

Sassy, if you don't mind, could you please elaborate on the following statement? I believe this lies at the heart of some very conflicting posts I've been reading. thanks.

 

"The FTC referred to the case prior to the amendments, what is notable about the case (beyond what the CA's insist they are about) is that the court held that the initial 30-day period was a grace period -- we know that is no longer true. "

[LKH]

Sassy, if you don't mind, could you please elaborate on the following statement? I believe this lies at the heart of some very conflicting posts I've been reading. thanks.

 

"The FTC referred to the case prior to the amendments, what is notable about the case (beyond what the CA's insist they are about) is that the court held that the initial 30-day period was a grace period -- we know that is no longer true. "

 

That means that a ca can attempt to collect during the initial 30 day period, UNLESS, a debtor/consumer has notified the ca of a dispute.

[SassyinAz]

Yep, what LKH said, nodding!!!!!!!!

 

Sassy

[Jazkal]

Thanks everyone, that info helps a lot. I feel better now. :8)

[Dariana]

Interesting. So what happens then when a CA doesn't validate, is not licensed, bonded, registered etc in your state; pulls their listing from your credit file, then sends the case to a collection attorney, who starts the whole process over again with letters, phone calls, etc. Is the attorney bound by the first non-validation? Would you suggest notifying the attorney that they are attempting to collect on a non-validated debt or do you? Does that 30 day window apply to the "second" or "third" collector when it hasn't been validated by the first?

[Jazkal]

From my limited understanding, it starts the whole process over again when the CA sends it back to the OC. The CA (who doesn't own the debt) won't send it to a CA Lawyer, they will send it back to the OC, who will re-asign it to another CA for collection.

[Dariana]

Jaz-

 

That's interesting and I guess we'll see how it plays out. In my case, CA sent me info that they were the owner of the debt. Asked for validation. They sent copy of contract, title, repo assignment. Found out the CA was not licensed, etc, so called them on that, filed a complaint with the BBB where they were. They responded to that complaint with a 'we will be forwarding this to our attorney in AZ" in March and Dariana can discuss anything further with them. They removed the listing from my credit report. Got a letter from the attorney in March stating that they were representing the OC (which isn't even in business anymore; the DOLA is 10/98 so it is out of SOL for suit); they demanded payment and have been leaving voice messages on my cell phone (how they got that # is beyone me). Requested validation; they sent the same documents. Was wondering if it is just as well to send them a final letter stating that the SOl has expired and I don't expect to hear from them again. I have violations against CA, but really all I wanted was to have the collection off my file. If it shows up again from this attorney, or they sue, then I will have an affirmative defense and counterclaims, but how likely are they to do that with a time-barred debt. Sorry to ramble and hijack your thread, but it is kind of a weird situation.

[benjakes]

subscribing, don't mind me...

[Jennifer]

Sassy, if you don't mind, could you please elaborate on the following statement?  I believe this lies at the heart of some very conflicting posts I've been reading.  thanks.

 

"The FTC referred to the case prior to the amendments, what is notable about the case (beyond what the CA's insist they are about) is that the court held that the initial 30-day period was a grace period -- we know that is no longer true. "

 

That means that a ca can attempt to collect during the initial 30 day period, UNLESS, a debtor/consumer has notified the ca of a dispute.

 

Which I did with Arrow Financial who was only listing many inquiries, and then I DV'd them and they added 4 collections to 2 bureaus and to this ay they have never called me sent me mail, no contact what so ever. They dont have to validate, yet Arrow continued DAMAGE AFTER I DV'd them! :evil:

[Jennifer]

Jaz-

 

That's interesting and I guess we'll see how it plays out.  In my case, CA sent me info that they were the owner of the debt.  Asked for validation.  They sent copy of contract, title, repo assignment.  Found out the CA was not licensed, etc, so called them on that, filed a complaint with the BBB where they were.  They responded to that complaint with a 'we will be forwarding this to our attorney in AZ" in March and Dariana can discuss anything further with them.  They removed the listing from my credit report.  Got a letter from the attorney in March stating that they were representing the OC (which isn't even in business anymore; the DOLA is 10/98 so it is out of SOL for suit); they demanded payment and have been leaving voice messages on my cell phone (how they got that # is beyone me).  Requested validation; they sent the same documents.  Was wondering if it is just as well to send them a final letter stating that the SOl has expired and I don't expect to hear from them again.  I have violations against CA, but really all I wanted was to have the collection off my file.  If it shows up again from this attorney, or they sue, then I will have an affirmative defense and counterclaims, but how likely are they to do that with a time-barred debt.  Sorry to ramble and hijack your thread, but it is kind of a weird situation.

 

Bradlees sent a collection to Sherman, who sent it to Alegis, who sent it to Forster & Garbus (collection lawyers) all have been DV'd at the same time and noone responded to this date! havent removed their listing from my credit nor marked anything in dispute either though. I can not get into small claims court here where I am! LONG story grrr......

[Why Chat]

Jaz-

 

That's interesting and I guess we'll see how it plays out.  In my case, CA sent me info that they were the owner of the debt.  Asked for validation.  They sent copy of contract, title, repo assignment.  Found out the CA was not licensed, etc, so called them on that, filed a complaint with the BBB where they were.  They responded to that complaint with a 'we will be forwarding this to our attorney in AZ" in March and Dariana can discuss anything further with them.  They removed the listing from my credit report.  Got a letter from the attorney in March stating that they were representing the OC (which isn't even in business anymore; the DOLA is 10/98 so it is out of SOL for suit); they demanded payment and have been leaving voice messages on my cell phone (how they got that # is beyone me).  Requested validation; they sent the same documents.  Was wondering if it is just as well to send them a final letter stating that the SOl has expired and I don't expect to hear from them again.  I have violations against CA, but really all I wanted was to have the collection off my file.  If it shows up again from this attorney, or they sue, then I will have an affirmative defense and counterclaims, but how likely are they to do that with a time-barred debt.  Sorry to ramble and hijack your thread, but it is kind of a weird situation.

 

If this is from a repo- you might wish to try this:

 

http://whychat.5u.com/repoltr.html

[radi8]

Don't forget that certain states have laws specifically addressing validation- for example:

Here in MI, validation MUST include an accounting of all payments made, including date of payment and amount.

 

Check your state's laws, references and links are in the consumer protection forum.

[debtfreegoal]

subscribing to and bumping this thread.

[DeltaBlues]

subscribing

[jm10101]

excellent thread