How to settle a collection accountin Hartford: Part 2 of a 3 part series

How to settle a collection account: Part 2 of a 3 part series

In Part one I went over validating the debt. Now what? Let's assume 45 days has passed since you certified mail your letter. You are going to find that 80% of your validation letters go unanswered. If the collector failed to respond to your validation request, you want to send them another certified mail letter stating that that have violated the Fair Debt Collection Practices Act by not validating your debt within the required 30 day time frame and as such they may be subject to a $1,000 fine. Also send them a copy of the original letter and your documentation that it was sent certified mail to them and received.

If the collector was one of the 20% who actually respond to a validation letter, you want to examine the documentation they sent you. Did they send everything you asked for? Did they sufficiently prove their case? Almost without exception the answer here is NO.

Let's look at a three examples of poor documentation.

In my first example: I recently received a validation response where the collector forwarded copies of the original charges on a credit card. After I added up the charges they totaled almost $1100. However, their cover letter and what they reported to the credit bureaus said they were collecting for over $1300. Now I could guess that the difference was interest they were collecting but they failed to make that claim in their validation. Since they had only validated $1100 and were demanding $1300 and reporting $1300 to the credit bureaus, they were in fact in violation of FDCPA and exposed themselves to a $1,000 fine. In this example you respond to the collector pointing out their validation only validated $1100 of debt while they were asking for $1300. Be sure to point out that this is a violation of FDCPA subject to a $1,000 fine.

In my second example: I received over 100 pages from a collector validating a cell phone bill. They sent me every page of every bill. What they failed to send me was the original contract and signature showing my client was liable for the debt. Just because they have a cell phone bill doesn't mean that my client was the one who opened the account. In addition, they failed to provide their license as a collector and authorization from the original creditor (in this case T-Mobil) to collect the debt. In this case you want to respond to the creditor that they failed to validate the debt and as such demand that it be immediately removed from the credit reports.

In my last example: I often receive a response from the collection company that our client owes the debt because they said so! I use this example here because it happens so frequently (no I'm not kidding) even though it is ridiculous. Often the collection company will take a piece of their letterhead and state on it that the client owes them money for XYZ. The answer here is obvious. They have not validated that our client owes them money. I like to point out to them if a piece of company letterhead and a statement that someone owes you money was "proper validation" then I have a stack of letterhead here and I'm going to be rich! I've even gone so far as to include in my response to them a piece of my own letterhead with a statement that their company owes me $240 ($120 an hour times 2 hours) for my time in validating this account. I do this just to demonstrate my point that their letterhead and statement does not prove a debt is valid.

In that last installment of this series (come back in 2 days), I will tell you what to do after you fire off these 2nd letters by certified mail!

:)
Matt

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