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Can a debt buyer be sued if they don't respond to your debt validation letter?

Stanford, CA |

I mailed a debt validation letter to a debt buyer about a notice they sent me. I don't recall having that account and needed proof. My DV letter was mailed to the exact address on their notice the day after I got it. Certified mail with a return receipt. They did receive it because I got the green postcard back in the mail with a signature. They have not responded. It has been well over 30 days. What is my recourse? Should I send another letter? Is this breaking any laws?

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Attorney answers 5

Posted

It is irrelevant who claims that you owe them money. They have to provide evidence of the debt. You are well within your rights to demand an accounting. I recommend that you give the creditor-assignee a call. If that fails, then there is nothing you can do but wait. Also, do check your credit report. If this debt shows up, dispute it with the major credit reporting agencies.

Asker

Posted

Paul, I called the original creditor that is written on the notice. The creditor told me the account was sold to a different company name than what is on the notice. But the company on the notice says they have been requested to assist them in the collection of the original debt. By the company who purchased it. Which is the same company the creditor told me has the account. I never received a notice from this company. Only the one who says they are assisting in the collection of the original debt. Can another company assist a different company who bought the account to collect it? Also I checked my credit reports. Another completely different company name all together is listed on them for the same amount. I looked online too and this third name on my credit reports is not associated with any of the two companies from what I can find. Could three separate collection companies collect on the same debt? When the creditor told me it was sold to just 1 company. Can you recommend a good strategy for dealing with this?

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Yes. A debt buyer can hire a collection agency, a debt buyer can hire a law firm to sue. Unlike what you implied in your comment under my post, sounds like you do know what this debt is for. So again, the underlying problem is the debt, not the collection agency/debt buyer. This exercise is a side show because the odds of you suing for a violation are slim (and they know that) and you are not really addressing the main issue, you are hoping there is some technicality, when in reality, there isn't.

Asker

Posted

Matthew, all I did was call the creditor written on the notice. To which they told me the account was listed under a different company name than what is on the notice. My doing this doesn't imply that I know what this debt is for. So then why isn't the company on the notice, sending me the notice? Why did I receive a notice for an account I have no recollection of, in my name, from a different company than what the creditor told me owns the account. I never received a notice from the company who purchased the debt. But instead, from another company all together. To you, this is a side show. I should just pay and not question anything. And you are assuming the odds are slim for a violation and suing them. Are you so quick to assume such things about your clients? The main issue is the collector who claims to be assisting another company to collect a debt for a card in my name I can't recall applying for. That another company has purchased who never sent me a notice they have the account. No validation was provided to me. They refused to respond to my request. This is how an honest company reacts? Maybe in your world but not in reality.

Posted

They only break the law, (if you can call it that) if they continue to try to collect. If a debtor sends a validation request, and the collection agency never responds, but at the same time stops trying to collect, then there has been no violation.

Note, to extent they broke the law is measured by YOUR willingness to actually sue. We can talk all day about FDCPA violations, whether a violation occured, etc., but unless a debtor is willing to pull the trigger and file the lawsuit, the discussion is merely academic.

Asker

Posted

Matthew, would filing a lawsuit trigger a chain of events with them suing me back? Do they have any solid legal ground in that instance when they never validated or responded to my DV letter?

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Keep in mind, an FDCPA claim (or suing the collection agency for collection violations) and your obligation on the debt are separate issues. So, it is certainly possible that they could initiate a lawsuit. If they did, and assuming they never validated, then you probably have another violation to add to your list, but the lawsuit against you would proceed. As Robert points out, a collection violation case is usually brought as a cross claim once you have been sued by the collection agency. We are getting very hypothetical at this point. Ultimately, the problem is the debt, not the collection agency. You haven't mentioned that you believe the debt being collected is a fraud or false, and odds are it is not the only debt out there you owe. Focus on the problem, you owe people money and are not paying. Until you finally "solve" that problem, you are never really going to rebuild financially.

Anthony J. Pietrafesa

Anthony J. Pietrafesa

Posted

Generally speaking, ther eis no violation for not answering your validation letter. But remember that California has its own debt collection statute, the so-called Rosenthal Act. You will want to talk to a CA consumer lawyer to get a good idea of your rights under that law as well as the FDCPA and FCRA

Asker

Posted

Matthew, I did mention I don't recall having that account and needed proof. If someone you don't know sends you a bill in the mail, do you just pay it?

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Asker: I am just playing the odds. Although there are scams, in over 2000 consultations in the last 4 years, not one has received a collection notice for a debt that they couldn't figure out was theirs. No different than a doctor, if you come into a doctor's office complaining of a runny nose and headache, the doctor is likely to say you have a cold and advise accordingly, the doctor is not going to initially think the patient has brain cancer.

Asker

Posted

Matthew, a doctor will give a patient an examination first. Before deciding on a diagnosis. They question symptoms, procure data and proceed accordingly. The same thing people must do with collection agency's. Regardless if they can figure out a debt is theirs or not. The industry is rife with scams. People should be concerned. And I don't know of any doctor who would so hastily make a snap judgement about anything. Especially a persons health. Without first asking a patient questions to help determine the legitimacy and severity of the issues.

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Come on now, under Paul's post you said you "called the original creditor", the odds were in my favor.

Asker

Posted

Come on now? Once again, I called the original creditor on the notice. The account is in my name and ss#. I don't recall ever applying for that account. I received no statements from the creditor. So the account is in my name. And a different company mailed me a notice than the company the creditor told me bought the debt. I never received any notice from the company who purchased the debt. Instead, the notice I received was from another company who claims they are assisting said debt buyer with collection of the debt. Which sounds highly questionable. Why does this debt buyer need assistance? Why didn't they initially send me a notice with their company name? I mailed this company "assisting with collection of the debt" a validation letter well over 30 days ago. To no response. Given the facts, would you be so quick to pay a company behaving like this? demanding money from you with no validation. Who refuses to reply a most basic request any legit organization would be happy to provide. If the debt is valid, why the outright refusal to respond to my simple inquiry to prove so? Instead they ignore it. They did receive my DV notice Certified Mail. I am trying to fulfill my obligation to find out what this debt is for. To understand why it is in my name. To see what documents they have in which they determined it's my account. They offered nothing whatsoever to prove it. Odds are, deceptive business practices are at work. More than anything.

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Please don't get defensive, I am not arguing with you and nowhere did I say "pay the debt", I am merely providing some perspective that you "apparently" have an unpaid debt floating around, that it would be very odd that it is the only unpaid debt, and therefore, perhaps your time and energy should be focused on the larger, real problem. If I am wrong about that, I am wrong. Like you said, I don't know your details. All we try to do on this forum is help. As for the original question, the comment is still that failure to validate is not a violation, only failure to validate and continuing to collect.

Asker

Posted

Matthew, I was trying to explain the facts of my situation. Because you seem to be making many assumptions in this case. About me. As well as the issue I'm facing. At this point, the larger, real problem is this company that claims to be "assisting with collection of the debt" who refuses to validate. I am focusing on that. Because they have refused to respond to my simple request for validation of a debt they demand immediate payment on. For an account in my name I have no recollection of. That's all. To verify your advice above relating to my original question, if this company sends me another notice or calls at this point without ever having validated the debt, it would be considered a violation?

Matthew Scott Berkus

Matthew Scott Berkus

Posted

Yes. If you sent a validation request and the company did not respond, at all, and then sent you another collection letter or called requesting payment, that would be a violation.

Posted

Yes. Lack of validation and other potential violations of the Fair Debt Collection Practices Act (FDCPA) (assuming that this was a consumer debt) will not prevent a debt collection lawsuit from being filed. However, any violations of the FDCPA can be brought either in a separate action or in a cross complaint against the debt collectors who violated it. If you have had your consumer rights violated, I'd recommend that you consult and consider retaining a consumer attorney with experience in FDCPA cases, as you can recover your actual damages, court costs, and attorney's fees. If you are sued on a debt, I'd suggest you review my "next steps count" blog, linked below, and consult with an experienced debt collection DEFENSE attorney, such as me.

I doubt sending another letter will change anything. What is it that you seek to accomplish? If you are the victim of identity theft, then be sure to read my legal guide on identity theft, which is the second link, below. If that is your situation, then clearly suing you on this false debt will violate that act, so be sure to assert that this is a case of identity theft, if you did not authorize this debt and obtain a police report and follow the other steps in my legal guide.

Robert Stempler (please see DISCLAIMER below)
www.StopCollectionLawsuits.com
www.facebook.com/SoCalConsumerLawyer
Twitter: @RStempler

NOTICE: The above statements are provided for general information purposes only and are not intended as legal advice or advice of any sort for a specific case or legal matter. If you do not have a signed attorney-client fee agreement with the Consumer Law Office of Robert Stempler, APC ("the Firm"), then until such written fee agreement is provided and signed by both a prospective client and attorney for a particular case, neither Mr. Stempler nor the Firm will represent you nor will they be your attorney in any matter and you remain responsible for retaining your own attorney and for compliance with any and all deadlines and for any statutes of limitations that may pertain to potential claims. Comments made on a public forum, such as Avvo.com, to not have any confidentiality because others may read them. If you desire a private consultation with Mr. Stempler that is confidential, please go to www.StopCollectionLawsuits.com and submit a free eCase Review. The result portrayed for a client was dependent on the facts of that case. Results will differ if based on different facts. The Firm and Mr. Stempler are a debt relief agency. The Firm and Mr. Stempler help people file for bankruptcy relief under the Bankruptcy Code.

Asker

Posted

Robert, do you know why they wouldn't validate? If the debt is mine, what is needed by law from them to prove it? Is there anything else I should ask from them? I am concerned about it being a scam. Or they don't have rights to collect it.

Robert Harlan Stempler

Robert Harlan Stempler

Posted

Unfortunately, that section of the FDCPA will not get you proof of the debt. All that is required is a letter from the debt collector that they have validated it and to show the original creditor's name and the current amount. A court case is the only way you will get proof of anything. (Please see DISCLAIMER above).

Posted

I agree with Matthew. Under the FDCPA, a debt collector has 2 options when they receive a dispute letter: either send validation or stop collections. They're only liable if they resume collections without sending validation.

Asker

Posted

Keren, if they stop collections is the account transferred somewhere else? Will the collection activity resume later? If it does, do you recommend sending another validation letter at that point?

Anthony J. Pietrafesa

Anthony J. Pietrafesa

Posted

Karen answred it succinctly. But if they do se di tto another collection agency, or a collection law firm, DO send another dispute letter. You have to be diligent with each collector.

Posted

You should certainly confer with a consumer attorney in your area. The failure to respond could be a violation of the FDCPA, and as my colleague says, it largely depends of if you are willing to file suit.