Validation Vs. Verification ~ Defeating the Chaudhry Claim of Debt Collectors

I have not written anything lately because for one, I have been very busy but the second reason is because sometimes I just don't know what would be a good topic to cover.  However, I'm working on a couple lawsuits for clients right now and today, my client sent me the plaintiff's response to her Motion to Dismiss.  The whole entire thing looks like it was put together by an intern with no experience writing briefs or no consistency of thought. Its like they decided to whine that nothing was relevant so boohoo, the court should not grant her motion.  They threw all kinds of stuff into their response, and as I have been researching, I came across a website that had one whole section that was word for word verbatim of one of the points in their response.  Can you say "copy/paste"?  So lame!

Anyhow, the one thing that jumped out at me is the forever favorite fall back case law that they quote, Chaudhry v. Gallerizzo.  Now, I have written about this case law and how to throw other case law back in the collection agency's face.  But here's the problem.  Our court system has what are called "Circuit courts" and they represent sections of the country.  I'm in the 9th Circuit designation.  Unfortunately, many of these circuit courts have upheld the Chaudhry decision for collection lawsuits so you need to know how to fight back.

The Chaudhry case upheld a very minimum standard for Verification.  But, you shouldn't be sending a "Verification" letter to collectors.  Verification is what credit bureaus do.  You send collectors "Validation" letters.  Though it may seem that verification and validation are the same thing, they are NOT!  Collectors love to use the word interchangeably but we need to stand firm on this.  Validation is the Proof. Verification according to the Chaudhry decision, is making sure they have the right person.  They only have to provide you with the Original creditor name, account number, dates, amount owed to supposedly prove that they are attempting to collect from the correct person.   They claim that they don't have to provide detailed records.  They may get away with that explanation during the dispute process, and they might get away with it in court, but not if you know more about Verification and Validation.

The best way I think to explain this so you can beat these lying vultures, is to bring legal resources into the argument.  You start with defining the two words.  Now, I look through many different legal dictionaries that would have some standing in court. You want to build a case against the collector through the dispute process so that you have this folder full of a documented paper trail where you have taken it to them and they continue to violate the law.  That way, when you've had enough, you have the ammunition to sue them, or you have the case built to defend yourself if they take you to court first. Hopefully, there won't have to be any litigation and you can get rid of them by showing them how they will fail if it goes to court.

Validation according to Black's Law Dictionary is "Assessing an action to determine it is complete, correct, implemented and delivering the correct outcome." I actually like the definition given by the Oxford Dictionaries better.  To "Validate" means "to check or prove the validity or accuracy of something" and "Validation" is a derivative of the word "Validate."  Now, did you notice that it means to "PROVE" the accuracy?  This is important.  My favorite definition that is very clear comes from Merriam-Webster, which says "to show the existence or truth of, by evidence." Remember this while I give you the definition of "Verify."

Verification according to Black's Law Dictionary is "... averment that the party pleading is ready to establish the truth of what he has set forth." Also, it goes on to say, "The examination of a writing for the purpose of ascertaining its truth; or a certificate or affidavit that it is true." Now, it also gives some case law and you will see how these collectors fall short.  The court said "Confirmation of the correctness, truth, or authenticity of a pleading, account, or other paper, by an affidavit, oath, or deposition." McDonald v. Rosengarten, 134 111. 126, 25 N. E. ; and Summerfield v. Phoenix Assur. Co. (C. C-) 65 Fed. 296; and Patterson v. Brooklyn, 6 App. Div. 127, 40 N.Y. Supp. 581.

Did you catch what these definitions are saying?  Its saying that "Validation" is the documented proof. Its not just "yeah, we have the right person and here's what you owe and who the original creditor is that you incurred the debt with." Oh, no.  Not even close!  Validation is the PROOF!!!  Don't forget that.  You demand validation, you demand proof.  You are not demanding hearsay, which is what they give you. Hang on to this stuff. Its powerful and important.  I'm so not done destroying their claim of "verification" yet.

Okay, let's tear apart their claim of "Verification."  Did you notice that not just in the definition, but in the supporting case law, that "verification" is them attesting to or certifying or confirming that their claims are true and they can prove it in court?  That's what verification is.  It is swearing under oath that you can prove your claims.  I'm going to break this down for you even more.  When in court, who can testify as a witness?  The answer is, a person with FIRST HAND KNOWLEDGE!  They saw something for themselves, they had the conversation, they were a party to whatever situation, etc.  If they do not have first hand knowledge and try to testify that they heard that the defendant told the other person something or the company claimed that the defendant ran up the debt---STOP RIGHT THERE!  That's HEARSAY and not allowed in court.  Its not evidence of squat!

Oh but there's so much more regarding verification.  A 3rd party collector CANNOT themselves verify any alleged debt.  Why? Look at the last couple paragraphs above.  They were not on the original contract. They were not a party to the original transaction.  They were not personally involved from the get go nor were they employees of the original creditor nor did they ever personally handle the alleged account when it was with the original creditor.  All they can provide is "Hearsay."   Now let's look at what the FDCPA says about verification.  I'm tying this all together and you will see very soon how you can whip their butts with this stuff.

The FDCPA regarding "Verification" and "Validation" of debts is found in 1692g. I'm going to show you how they do not verify nor validate when you demand validation. It is found in (b) of 1692g.  Here's a portion of that which is very important. It says, "...the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a 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."  I capitalized the "AND" for emphasis.  They have to send you a copy of the verification.  What is verification again?  It is swearing under oath that they can provide the proof.  How many times have you received a response from a 3rd party collector that has the name of the original creditor, amount of debt, relevant dates, etc. accompanied by a notarized statement from the original creditor "verifying" that they have the proof and are willing and able to testify with first hand knowledge that the 3rd party's claim are valid?  I'm willing to bet that 99.99% of you will say "NEVER!!"

They don't send a statement from the original creditor, sworn under oath, by someone authorized, willing and able to testify in court. That means, they never truly verify the alleged debt. When they send copies of statements, computer printouts, letters claiming they consulted with the original creditor or checked their records, they send you the name, address, amount, etc., but no notarized statement from the original creditor, remember this:  They have not validated, they have not verified, they have failed.  

So they can throw the Chaudhry v. Gallerizzo case at you all they want. They can throw other case law at you like Graziano v. Harrison claiming that computer printouts are sufficient. But, if they lack true verification, a notarized statement by a qualified representative of the original creditor that they attest to the validity of the alleged debt and will testify as much with the documentation, in court, they have failed at validation. They have failed at verification. They have not qualified their claim to allow them to resume or continue collection activity in accordance with the FDCPA.  

That's how you shoot down their bs. That's how you take it to them in your disputes and in your lawsuits, whether initiated by them or you. That's how you should win!

I'd love to hear from you.  If you have questions, email me or call me. If you don't want to repair your credit by yourself, I'd love to help you. Again email me or call me.  My information is up at the top on the right hand side. If you loved this information and it helps you, please leave a comment below.  I don't allow spam with links to porn sites or substandard credit repair sites to post.  But, I love legitimate comments and recommendations for more credit repair topics you'd like me to cover.  Those will be approved right away.

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How To Remove Judgments and Bankruptcy / BK From Your Credit Report

Have  you searched everywhere online to find out how to remove judgments or a bankruptcy and asked all kinds of people, self proclaimed credit repair specialists or mortgage brokers, real estate agents, YouTube videos, DIY articles, answer websites, and other places?  If you've run into anything that is slightly related to the credit bureaus or strongly related to them, such as the bureau sites themselves, or credit report sites, or the FTC website, you will get the same regurgitated answers.  They will always tell you they have to stay on for 10 years. Hogwash, I declare!  I dare one of them to show me the law that says it has to stay on there that long.  In fact, that's almost the opposite of what the law says.

If you read articles and ads from credit repair sites, they will stop short of telling you how they do it because they want your business.  Oh, and the FTC doesn't want your business, but it sure seems like they want to help the bureaus make money off of you.  They prefer to deter you from getting help from someone who knows how by saying you should never pay someone because you can do it yourself.  Of course there's always the sites that are promoting the annoying Lexington "Law" type credit repair sites.  Click on that link, which is pretty much always an affiliate link, and someone's gonna make money off of you.  "Law firm" credit sites will tell you they take them off all the time but they are not interested in helping you learn how to do it because they want to make a couple thousand bucks off of you, or maybe just a grand before you get fed up and cancel months down the line.

I'm gonna tell you how to do it.  But first, one more thing.  The law about how long it has to stay on there. The FCRA says that negative accurate information CAN stay on NO LONGER than 7 years plus 180 days from the date of first delinquency and 10 years for things like judgments and bankruptcies.  See how they spin it to make you feel defeated?  I really get irritated with the misinformation and spin they all put out there.  And if you really want to help people get rid of negative items off their credit, why don't you give them the information if you're such an expert?  Are you really that worried that you will lose customers if you help people who want or need to do it themselves?  What? Are there really so few people out there with bad credit that you have to grab everyone you can?  Puhleeease!  Seems to me there are millions of people out there that need help with their credit.  There's enough work to go around while still helping those who want to do it on their own.

Okay, removing these items is for the most part, a 3 step process.  I'm not saying it works all the time, but if the bureaus would obey the law, it would work 100% of the time.  However, you will have a much higher chance of success if you do it this way.

Step 1:  Send a letter to the credit bureaus that are reporting the judgments and/or bankruptcy and tell them that you do not have a judgment or BK for $XXX dollars. Don't lie about the amount.  Now, if the amount is 100% correct, to the penny, remember, they don't report the change (35 cents, etc.) so if there's any change noted in the judgment at the courthouse, what is reported on your credit report is an error.  Same thing for BK. Usually I see bankruptcy reporting with $0.  Really?  $0 liability? Why on earth would someone file if they owed nothing?  If the public record is actually reporting a correct amount, then use a different mistake.  If you can't find one, make up something by claiming you "don't recall" having a bk or judgment on 01/01/2008 or whatever date. Not recalling the exact date that the county recorder entered into the record is not a lie, its a spin.  They have the burden of proof.  Also, many times they list the wrong court house.  Make sure you look at that also.  Okay, so that's the first step.  Dispute the negative judgment or bk (or both) with the credit bureaus.

Step 2:  Take a look at the address for the court for who is supposedly furnishing the information.  Judgments are usually county or local courts, bankruptcies are in federal court.  You need to write a letter to each of the clerks of the courts that are supposedly furnishing the information to the credit bureaus.  I keep saying "supposedly" because really they are not furnishing the information 99.99% of the time.  This letter you send the clerk is very basic.  You say, Dear Clerk of the Court,  I recently disputed information that was on my credit report that is not reporting accurately.  They verified the information and have told me I need to contact the furnisher of the information.  I am requesting that you send me your procedure for verifying information with the credit bureaus.  Thank you for your assistance.   Sincerely, pissed off consumer.  Okay, maybe you're not pissed off but in my opinion, you have every right to be!  Do not wait until you get the response from the bureaus to send this out.  Send it out at the same time as your bureau dispute to shorten the time for getting it off your credit report.

Step 3.  You now received the letter back from the clerk of the court.  Holy cow! It says that they do not verify with the credit bureaus. What a shock!  This means that those blood suckers are going to be sending you a credit report with a big fat lie on it!  Be prepared.  Now, you also get back the response from the credit bureaus, and you're gonna get it and say, "Shannon was absolutely right!  Now there's a real expert" - haha, just kidding!  But, 99.99% of the time, I will be right.  You may be a lucky one who got a data entry peon who felt like deleting just because, and that is great!  But for the rest of you victims, the report will claim it is verified and contact the furnisher of the information.  Its time for the 3rd action.  You send back a letter to the bureaus.  You say, "I sent you a dispute because this information is not accurate.  You verified it.  Please see the enclosed letter from the clerk of the court. You lied about verifying it with them. Further, please see the letter from the legal counsel for the FTC that I have enclosed.  I've highlighted where they have stated that public records often have mistakes on them.  YOU LIED about verifying a mistake.  PLEASE DELETE THIS IMMEDIATELY!"  I would say, 75% of the time, your response from the credit bureaus will show the item deleted.

And that's how its done!  Now, I mentioned an opinion letter from legal counsel for the FTC.  You can go on their website and read through all of the boring opinion letters till you find it, or you can email me and I'll email it to you, for only $499, but today only I'm reducing it to ONLY $47.  JUST KIDDING AGAIN!  I'll send it to you for free! You like free? I sure do. (Yes, I'm making fun of marketers, in case you didn't catch it).

Do you want to know some background on how the bureaus break the law, or at the very least, don't comply with the law, when it comes to removing public records?  If you do, keep reading, if not, then just email me if you need the letter.  Okay, here goes.

Except for the very minuscule number of courts that do furnish information or verify information to the credit bureaus, courts, their clerks, their secretaries, the judges, the trustees, etc., do not furnish information to credit bureaus.  They receive information from subcontracted scavengers that scour the public records and LexisNexis to find the judgment and bankruptcy dirt on consumers. So the furnishers of the information have no actual knowledge of anything, have no first hand information, are not a party to any of it.  They dig it up, read it and furnish it, then get paid. 

When you dispute, the bureaus have a responsibility to "investigate" but they do not contact the court or any other entity that could possibly have actual first hand knowledge. They put the courts' addresses on there to make you think that the courts furnish and verify, but that's a BIG FAT LIE!  What they really should have on there is the name and contact information for their little gophers who go dig up this stuff.  But, by law, or by legal definition, they have no right to "VERIFY" anything.  

Black's Law Dictionary 2nd Ed. - Verification:  Confirmation of the correctness, truth, or authenticity of a pleading, account, or other paper, by an affidavit, oath, or deposition. See McDonald v. Rosengarten, 134 111. 126, 25 N. E. 429; Summerfield v. Phoenix Assur. Co. (C. C-) 65 Fed. 296; Patterson v. Brooklyn, 6 App. Div. 127, 40 N. Y. Supp. 581. 

What this definition is saying is that the person "verifying" must be able to testify to its accuracy under oath, either by affidavit or in court or court proceedings such as a deposition. Now, in order to testify to such accuracy, the "person" would have to have 1st hand knowledge otherwise it is considered "hearsay" because the furnisher of the information is relying solely on public information that has been known to have mistakes. Here's what the courts say about "hearsay": 

“Testimony, whether live or in the form of an affidavit, to the effect that the witness has reviewed a file and that the file shows that the debtor is in default is hearsay and incompetent; rather, the records must be introduced after a proper foundation is provided.” New England Savings Bank v. Bedford Realty Corp., 238 Conn. 745, 680 A.2d 301, 308-09 (1996), later opinion, 246 Conn. 594, 717 A.2d 713 (1998); Cole Taylor Bank v. 
Corrigan, supra, 230 Ill.App.3d 122, 595 N.E.2d 177, 181 (2d Dist. 1992). 

“It is the business records that constitute the evidence, not the testimony of the witness referring to them.” (In re A.B., 308 Ill.App. 3d 227, 719 N.E.2d 348 (2d Dist. 1999) 

These are both Federal court cases on hearsay.

Now, do you see that not only are the bureaus liars, they are committing fraud, both mail and wire fraud, when they send you the report through the mail or make it available for you to check it online, and see "Verified"?  The person who furnished the information cannot possibly have 1st hand knowledge.  They shouldn't even be allowed to submit information to the bureaus because the FCRA commands ACCURACY and there's no way these scum can know if the information they found in the public records or elsewhere was input accurately.  They are not a party to the action, they are NOBODIES! 

Well, that was fun right?  It was for me.  I have fun teaching you this information and love that I am one of the few that tell you the actual truth.  Hopefully I have helped some of you fight this corrupt system that is supposed to be consumer friendly, but has so many loop holes for creditors and collectors, and sabotages aimed at consumers.  Here's to your success removing those judgments and bankruptcy entries from your credit reports!  

Please remember, if you just don't want to do it by yourself, I would love to assist you.  Give me a call or shoot me an email.  My contact info is right up  at the top of this page on the right.

If you have found this blog helpful to you, please consider donating as a sign of your appreciation for information I have freely given to you.  The "Donate" button is on the right side bar.  Thank you for your generosity.

How To Deal With Collection Agencies ~ Part 4 (States With License and/or Bonding Requirements)

This is my final post in this series and I'm sorry that I'm so late in getting it out, especially for those of you who have been checking and waiting for it.  This post is about a very important tool to use against the collection agencies who are harassing you, badgering you, or simply just trying to take your money from you.  I cannot stress enough how important it is that you don't just go and pay these 3rd party collectors.  It will add years of negative credit to your credit reports and can be so much harder to get them to come off when they've been paid.

Now, we've covered a couple tools already. States that have their own version of the FDCPA, and my little bonus of UCC codes on that one. Then, the Statute of Limitations (SOL) for each state.  Here's a little bonus on the SOL that I recently discovered, and those of you in states that have ridiculously long SOL's are going to love this.  UCC 3-118(g) and UCC 4-111 state that the SOL is 3 years!

Yep, 3 years. UCC 3-118(g) is important for credit because this has to do with negotiable instruments and conversion of an instrument.  That's what they do with credit accounts, be it credit cards, credit lines, mortgages, "money lent" by financial institutions. They don't lend money, they lend credit, which is illegal, and they convert the loan docs, application, eg. promissory note or negotiable instrument, whatever you want to call it, into "money. 3 years, folks, 3 years!

Okay, lets get into this last tool.  Many of you are going to love it. This tool is a list of the states that require debt collectors to be licensed and/or bonded to conduct collection activity within their borders.  This usually goes for debt collection law firms as well.  They used to love that they could get away with their sleazy tactics because they were a law firm. But now, if debt collection is the main function of their law firm, they are lumped in the pile of cow poo that is the 3rd party collectors and junk debt buyers that try to collect from consumers.

Most states publish a list of all the licensed debt collection companies.  Some states allow collection acts if they are licensed in other states with similar licensing requirements.  Also, some states have cities that have license requirements as well, to protect the residents of their cities from these scum.  It is wonderful!  I've included the web addresses to look up the collection company or information how to get a list of the 3rd party collectors to see if the ones bugging you are licensed. Most of these state sites have links or instructions how to file complaints against them too.

I want to apologize to those of you who live in states that don't seem to care enough to enact legislation that requires these bullies to get licensed or bonded.  I know, its not me that should apologize, it's them, but you know they will never issue a sincere apology to you. I'm in that same boat as many of you. I'm in California and they don't require licensing or bonding for debt collectors here either.  Its sad. Personally, I think its because its such a money making business for the state to get the court fees from all of them and all the consumers who get sued and lose or have to pay a court filing fee to fight the collectors.  They probably make much more by allowing all that fraudulent nonsense than they would through licensing fees.

Well, read on!  Here's the list!

STATE and TERMS	WHERE TO FIND LIST
Alaska - Only requires license for companies located in Alaska or out of state collecting for original creditors located in Alaska.	http://commerce.alaska.gov/CBP/Main/SearchInfo.aspx
Arizona - Allows collection agencies that have a valid license in another state that has similar licensing requirements and has a reciprocity clause to collect without obtaining an AZ license	http://azdfi.gov/lists/CA_List.HTML
Arkansas - Requires a license whether they are located in the state or not, if attempting collection on a resident of Arkansas	http://www.asbca.org/collect_search/
Colorado - Requires all debt collectors to be licensed and to maintain an office in the state, open to the public, if they want to try and collect from residents.	http://www.coloradoattorneygeneral.gov/sites/default/files/uploads/cab/CabReport.pdf They update the list every month I think, but I believe the link stays the same.
Connecticut - Have to have a license to collect, regardless of whether they are located in state or not.	http://www.ct.gov/dob/cwp/view.asp?a=2233&q=297872  There's a link at the bottom that is updated to view current licensees and also a tab on the left to verify a license.
Delaware - Must be licensed to collect in the state. They pay $75 to be licensed as Mercantile/collection agency but sometimes they license under personal or professional services as well.	https://dorweb.revenue.delaware.gov/bussrch/ This page has a search feature and the ability to download the list of licensed businesses.
Florida - Must be licensed if located in state. Must be licensed if out of state and collecting for creditor in state or soliciting accounts from creditors in state. Are not allowed to collect on medical bills for services covered under HMO's.	https://real.flofr.com/ConsumerServices/SearchLicensingRecords/Search.aspx
Hawaii - Must be licensed and bonded. However, for out of state collection companies, if they are licensed and bonded in another state, they can apply for an exemption. But, the exemption is not automatic. It must be approved and granted by the state.	http://pvl.ehawaii.gov/pvlsearch/app This link is to search for licenses. http://hawaii.gov/dcca/pvl/programs/collection/ This page has a link to file complaints against the collectors and look up their complaint history as well!
Idaho - Must be licensed whether in state or not to try to collect alleged debts from residents	http://finance.idaho.gov/CollectionAgency/CollectionAgencyLicense.aspx
Illinois - Must be licensed unless they are out of state and are licensed with equivalent requirements from that state	https://www.idfpr.com/licenselookup/licenselookup.asp
Illinois - City of Chicago Only - Must have a license in both Chicago and the state license. However, if they have an exemption with the state of Illinois, they can get one in Chicago too.	https://data.cityofchicago.org/Community-Economic-Development/Business-Licenses-Current-Active/uupf-x98q
Indiana - Must be licensed and bonded.	http://www.in.gov/apps/sos/securities/sos_securities
Iowa - Not required to be licensed but must register if they collect $25,000 or more in a calendar year. Applies to creditors and collectors	http://www.state.ia.us/government/ag/images/pdfs/Contacts_ICCC_Notification_Fe.pdf
Louisiana - Must be licensed and bonded	http://www.sos.la.gov/BusinessServices/SearchForLouisianaBusinessFilings/Pages/default.aspx
Maine - Must be licensed and bonded	http://pfr.informe.org/ALMSOnline/ALMSQuery/Welcome.aspx
Maryland - Must be licensed and bonded	http://www.dllr.state.md.us/finance/industry/licsearch.shtml  You can search by name or location.
Massachusetts - Must be licensed and they use a service called Nationwide Multistate Licensing System (NMLS)	http://www.nmlsconsumeraccess.org/  Looks like its for mortgage brokers but its actually for debt collectors too
Michigan - Must be licensed whether in state or not to try to collect alleged debts from residents	http://www.dleg.state.mi.us/verify.htm
Minnesota - Individual debt collector (human being) and the collection company they work for must be licensed.	http://mn.gov/commerce/banking-and-finance/consumers/license-lookup/license-lookup.jsp
Nebraska - Must be licensed and bonded	http://www.sos.ne.gov/licensing/collection/pdf/licensed-collection-agencies.pdf
Nevada - Must be licensed and bonded	https://fid.online.nv.gov/datamart/selSearchType.do?from=loginPage
New Jersey - Must be bonded whether in state or not to try to collect alleged debts from residents	http://www.nj.gov/treasury/revenue/collagency.shtml  You have to request a verification of the bond by mail.
New Mexico - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents	http://rldverification.rld.state.nm.us/Verification/Search.aspx?facility=Y  In the "License Type" drop down list, select collection agency
New York - City of Buffalo Only - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents	http://www.city-buffalo.com/Home/City_Departments/EDPIS/Licenses/LicensedContractors
New York - New York City Only - Must be licensed whether in state or not to try to collect alleged debts from residents and must include license number on all correspondence	http://www.nyc.gov/html/dca/html/licenses/license_check.shtml
North Carolina - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents.	https://sbs-nc.naic.org/Lion-Web/jsp/sbsreports/CompanySearchLookup.jsp Use "company type" for drop down to collection agency http://www.ncdoi.com/ASD/ASD_Consumer.aspx  Use this link to file a complaint!
North Dakota - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents. This includes every branch office they may use for collection activity	http://www.nd.gov/dfi/regulate/reg/regulated.asp
Oregon - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents.	http://www4.cbs.state.or.us/ex/all/mylicsearch/index.cfm?fuseaction=main.show_main&group_id=20&profession_id=22&profession_sub_id=22000&profession_name=Collection%20Agencies
Rhode Island - Must be licensed whether in state or not to try to collect alleged debts from residents.  May also have to have a bond.	http://www.dbr.state.ri.us/documents/divisions/banking/program_operations/List_of_Debt_Collectors.pdf
Tennessee - Must be licensed and bonded. However, for out of state collection companies, if they are licensed and bonded in another state, they can apply for an exemption. But, the exemption is not automatic. It must be approved and granted by the state.	http://verify.tn.gov/
Texas - Must be bonded whether in state or not to try to collect alleged debts from residents	https://direct.sos.state.tx.us/debtcollectors/dcsearch.asp
Utah - Must be registered with the Div. of Corporations and Commercial code and bonded whether in state or not to try to collect alleged debts from residents	https://secure.utah.gov/bes/
Washington - Must be licensed and bonded whether in state or not to try to collect alleged debts from residents. Also includes debt buyers.	https://fortress.wa.gov/dol/dolprod/bpdLicenseQuery/
West Virginia - Must be licensed and bonded and have an office in state to perform collection activities	http://apps.sos.wv.gov/business/corporations/
Wisconsin - Must be licensed and bonded to collect in state. Out of state exemption if only performing collection activity via "interstate telecommunications and interstate mail."  ~ To me, this sounds like they can't sue you if they are out of the state and don't have a license or bond and they have an exemption.	http://www.wdfi.org/fi/lfs/licensee_lists/
Wyoming - Must be licensed and bonded and have an actual office with resident manager in the state. Every office or branch must be licensed and bonded. Exemptions for collecting business and or commercial debt or law firm collecting for the TRUE name of the original creditor.  Also, do not have to be licensed if the alleged debt they are attempting to collect originated out of state on the internet or by mail.	http://audit.state.wy.us/banking/cab/cablicensees.htm

Now, I hope you noticed that Illinois has a state licensing requirement but so does the city of Chicago. This means that if you live in Chicago, Illinois, the debt collector has to have a license for both the state and the city of Chicago.  I can honestly say, this is one thing that it appears Chicago is doing right!  If you get a bill from a debt collector, and you demand validation and they respond, you've got them.  Heck, you've got them if they aren't licensed. REPORT THEM IMMEDIATELY, at the same time you send them a "Ha, Ha, you're gonna get it" letter!

The state of New York DOES NOT have any licensing requirements. But the city of Buffalo does and New York City has licensing laws too!  Its not as good as Chicago, but heck, if you live in one of those two cities, you're faring better than the rest of the folks in the state of New York that live in other cities!

Make sure if you're in one of these states or cities that require licensing, registration or bonding, you look up that 3rd party collector. You never know, they may not be licensed, and that will make your credit repair efforts that much easier! Some states may have quirky little exemptions,  but for the most part, all of these states require some sort of licensing and/or bonding.

You should use this tool.  Also, I urge you to file complaints on these 3rd party collectors for every little violation that they do. You may have to do a little bit of searching on your state's correct government website to find how to file a complaint, but do it.  If they get repeated complaints from consumers, they will get fined and can get their licenses revoked. Getting these companies banned from collecting in your state helps all consumers. Then it may be a little easier to get bad debt removed from your credit reports because they will NOT be allowed to report on your credit reports in any way, shape or form because it is considered "collection activity" and without a license, it is blatantly illegal!

I like giving you assistance in your fight to rid your credit reports of these blood suckers and I hope that this information helps your pursuit of pretty credit a bit easier.  If cleaning up your credit is a bigger job than you want to handle on your own, please give me a call or email me.  I'd love to be the one you choose to help you.

How To Deal With Collection Agencies ~ Part 3 (State Statute Of Limitations For Credit Cards)

A lot of the bad credit that is on credit reports is from collection agencies.  But, there are original creditors too that report, so you may have 2 or more negative entries on your report for the same alleged debt.  This tool, the State Statute of Limitations (SOL) is great for both.  Now, most states have reasonable SOL's but there are a few that are absolutely insane!  When an alleged debt is outside of the SOL it is considered Time-Barred and non-collectible.  But, that doesn't stop many of these collection agencies, and some creditors, from still going after you.  What is completely ridiculous, is that they legally can!  Well, that is, unless you put a stop to them.

How do you put a stop to them, through a demand for validation and then a follow up with a Cease & Desist (C&D) letter.  Some are arrogant and greedy enough though to file a civil claim against you.  That can easily be defeated by taking their lame attempt at validation (usually some printout or a copy of the last bill from the original creditor) that clearly shows a date from years ago.   I have actually seen them dummy up a new statement with a current date on it, supposedly from the original creditor, to try to re-age and trick the alleged debtor into giving up and just paying them.

I'm going to shout now, and bang my head against a wall - DON'T DO IT!!! DON'T PAY THEM!!!

Dig around for a true old bill or contact the original creditor for a copy of the statement.  Ask them to send you back a copy of the last bill that you paid or better yet, check your credit report. Usually, the original creditor will put a somewhat accurate date on the credit report, and Equifax has a little chart that shows when you did and didn't make payments.  That is proof of the Date of Last Activity (DLA), which is when the SOL starts tolling.  If you're sued, then that will be one of your exhibits in your answer to the complaint, proving that it is time barred and they have no recourse.  Don't forget, you want to keep copies of your letters demanding validation and their responses.  It is just more proof that they didn't validate, so they are in violation of the FDCPA (continuing collection activity without validating or verifying the alleged debt).

So, let's get to it. Here are the Statute of Limitations for Open Accounts, which represent credit card accounts, which are the main type of negative credit that annoys most of us, for every US state and several territories. 

STATE	NUMBER OF YEARS	ANY COMMENTS
Alabama	3 Yrs	Actions based on fraud - 2 yrs
Alaska	3 Yrs	Used to be 6 yrs
Arizona	6 Yrs  or  4 years On July 20, 2011 AZ changed its statutes to include credit cards as written contracts. If the default/DLA is prior to 7/20/11 then the prior 3 year statute of limitations (SOL) applies. If the DLA is after 7/20/11 then the new SOL applies.  Now, the new 4 year SOL is for credit card accounts obtained outside the state of AZ and the 6 year SOL applies to credit cards obtained in the state of AZ.  So check the billing address of your credit card account to see whether your credit card is inside or outside of AZ.	Judgments have to be renewed w/in 5 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Arkansas	3 Yrs	Medical 2yrs from service or last payment, whichever is latest
California	4 Yrs	SOL stopped if pymt made after SOL expires - In other words, Do Not Make Pymt after it expires! But, pymt w/o acknowledgment does not restart the SOL
Colorado	3 Yrs	Jdgmt can renew every 6 yrs
Connecticut	6 Yrs	Open is considered written
Delaware	3 Yrs	Considered a general contract
District of Columbia	3 Yrs	Oral promise restarts SOL!!
Florida	4-5 Yrs	Contract or Written instrument is 5 yrs but all other is 4 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Georgia	4 Yrs	From date of default, not last pymt. Making a pymt without acknowledging the alleged debt does not restart the SOL.
Guam	6 Yrs	For contracts such as medical bills, the SOL is 4 yrs from date of service
Hawaii	6 Yrs	Jdgmt can renew 10 yrs
Idaho	4 Yrs	Jdgmt can renew 5 yrs
Illinois	5 Yrs	Pymt or promise to pay extends it to 10 yrs from that date
Indiana	6 Yrs	Pymt, acknowledgment or a promise to pay restarts the SOL
Iowa	5 Yrs	Pymt, acknowledgment or promise to pay restarts SOL
Kansas	3 Yrs	Written contracts SOL is 5 years. Many sources claim SOL for credit cards is 5 yrs but that is not so according to Article 5, 60-512 of Kansas statutes.  Pymt w/o acknowledgment doesn't restart the SOL
Kentucky	5 Yrs	Judgment 15 yrs
Louisiana	3 Yrs	Jdgmt can renew 10 yrs
Maine	6 Yrs	Jdgmt is 20 yrs (don't let that happen to you! Pymt w/o acknowledgment doesn't restart the SOL
Maryland	3 Yrs	Reaffirming through written, orally or a pymt restarts SOL
Massachusetts	6 Yrs	Judgment 20 years, probate claims 1 yr from date of death. Pymt w/o acknowledgment doesn't restart the SOL
Michigan	6 Yrs	Jdgmt can renew 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Minnesota	6 Yrs	Pymt or written acknowledgement restarts the SOL
Mississippi	3 Yrs	Jdgmt can renew 7 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Missouri	5 Yrs	Jdgmt can renew 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Montana	8 Yrs	Written acknowledgment or pymt restarts SOL
Nebraska	4 Yrs	Pymt, partial pymt, or written acknowledgment restarts SOL
Nevada	4 Yrs	Pymt w/o acknowledgment of alleged debt doesn't restart SOL
New Hampshire	3 Yrs	Pymt restarts the SOL
New Jersey	6 Yrs	Jdgmt can renew at 20 yrs - that's insane!
New Mexico	4 Yrs	Written acknowledgment or pymt restarts the SOL
New York	6 Yrs	Pymt w/o acknowledgment doesn't restart the SOL
North Carolina	3 Yrs	SOL runs from date of each individual charge
North Dakota	6 Yrs	Written acknowledgment, promise to pay, or payment restarts the SOL
Ohio	6 Yrs	Jdgmt can renew at 5 yrs
Oklahoma	5 Yrs	Jdgmt 5 yrs
Oregon	6 Yrs	Jdgmt 10 yrs
Pennsylvania	4 Yrs	Written acknowledgment, promise to pay or pymt restarts the SOL
Puerto Rico	3 Yrs	Jdgmt 15 yrs
Rhode Island	10 Yrs	Jdgmt 20 yrs.  Just slap me silly if I ever go nuts and move there!
South Carolina	3 Yrs	Written acknowledgment or partial pymt restarts the SOL
South Dakota	6 Yrs	Jdgmt 20 yrs.
Tennessee	6 Yrs	Jdgmt 10 yrs
Texas	4 Yrs	Pymt w/o acknowledgment doesn't restart the SOL
Utah	4 Yrs	Jdgmt 8 yrs. Written acknowledgment restarts SOL
Vermont	6 Yrs	Jdgmt 8 yrs
Virgin Islands	3 Yrs	Jdgmt 20 yrs
Virginia	3 Yrs	Jdgmt can renew at 10 yrs. Pymt w/o acknowledgment doesn't restart the SOL
Washington	6 Yrs	Jdgmt can renew at 10 yrs
West Virginia	5 Yrs	Acknowledging debt, promise to pay, any pymt restarts SOL. Be careful, it may apply to verbal/oral acknowledgment.
Wisconsin	6 Yrs	Pymt restarts the SOL
Wyoming	10 Yrs	Jdgmt 21 yrs. Again, just slap me silly if I ever go nuts and move there!

This information is believed to be correct as of the date of this post, but state laws and statutes can change.  You should also check your state statutes to verify that this information is correct, just to be on the safe side. Even though some states show that making a payment without an acknowledgement does not restart the SOL, to be on the safe side, Don't Make A Payment! Don't verbally or in writing admit that its your debt. Don't reaffirm, especially if you are near, at, or past the SOL. Doing any of these things will make the negative information stay on your credit longer. You're trying to improve your credit, not make it worse, right?

Again, just because you have hit the SOL for an alleged debt, it doesn't mean the lowlife, scumbag, junk debt buyers can't keep hounding you and keep trying to collect. If you are outside of the SOL, you will need to send them that C&D letter to make them go away.  I have a sample of one of the C&D letters I use on the post from April 30th, 2013 titled How To Stop Collectors and Creditors From Calling You. (It will open in a new window if you click this link).  

If you don't mind them calling you multiple times a day or using auto dialers, or any other violation of the FDCPA, FCRA, or TCPA (Telephone Consumer Protection Act), you can keep a notebook or log book and start documenting, then hit them with a "Notice of Demand" for their violations, notifying them if they don't remove the negative entries from your credit reports, you will be taking them to court.  There is a procedure for this, but I do have some friends that successfully have made some of them pay them as well as deleting the alleged accounts.

Well, hopefully this information will help you in your fight for better credit reports and good riddance of those pesky collectors.  If you need help with your credit repair, feel free to call or email me. I do respond and answer my phone.  If its a job you don't want to take on by yourself, again, just email or call me. My contact info is Waaaay up there at the top on the right (I know, this is a looooong post!). I would love to help you get the credit report that rightfully belongs to you!

How To Deal With Debt Collection Agencies ~ Part 2 (States With State Version Of The FDCPA)

The Fair Debt Collection Act (FDCPA) is a great weapon to use when repairing your credit.  However, it only applies to 3rd party collectors.  Most states have statutes or codes that deal with collections though they deal more with 3rd party conduct or contract terms.  But, there are a number of states that have their own version that mirrors the FDCPA except that it also includes original creditors.  So, when you are demanding validation, you will want to tell the 3rd party collectors that the demand for validation is pursuant to both the FDCPA and the state version. Unfortunately, some state Fair Credit laws or Fair Debt Collection laws or statutes  still do not include original creditors.  Some do include original creditors with the exception of demanding validation from them.  I will give you a not so well knowm tool to use also, that I recently found through research, that you can use for every single state, at the end of this post.  For now, here are the states with their own Fair Debt Collection Act that applies to original creditors:

State                Name of Law                                 Includes OC     
Arkansas -  AR Code Annotated  § 17-24-102         Yes                 
Mainly for conduct

California - Rosenthal Act                                     Yes                  
  Validation for Original Creditors (OC) is excluded

Connecticut - Connecticut FDCPA                          Yes                
Has a really interesting provision that sounds like they really
are not allowed to collect debts! It says:

1. § 36a-805   (3) purchase or receive assignments of claims for the purpose of collection or institute suit thereon in any court;

2. and § 36a-806 (b) No creditor shall retain, hire, or engage the services or continue to retain or engage the services of any other person who engages in the business of  a consumer collection agency and who is not licensed to act as such by the commissioner, if such creditor has actual knowledge that such person is not licensed by the commissioner to act as a consumer collection agency.

Florida - FL FDCPA & also                                  Yes
FL Consumer Collection Practices Act    ~ Not all rules apply to OC's or Lawyers

Iowa - Iowa FDCPA                                            Yes

Kansas - KS FDCPA                                            Yes
It really seems to only deal with banning illegal contracts and usury interest rates

Louisiana - LA FDCPA                                        Yes

Maine - Maine FDCPA                                        Yes but only if they use a different name for their collection division.   It mirrors the Federal FDCPA

Maryland - MD Consumer Debt Collection Act      Yes
This is a good one! Mirrors the FDCPA and includes OC's

Massachusetts - Consumer Debt Collection         Yes
Practices Regulations.  This is the first state to require OC's to VALIDATE!!

Michigan - Collection Practices Act                     Yes

New Hampshire - NH Debt Law                           Yes
Does not require an OC to validate

New York - NY Debt Collection Law                      Yes
Don't believe it includes validation for OC

North Carolina - NC Debt Collection Law              Yes
But it is for prohibiting unfair and deceptive practices

Oregon - OR Debt Collection Law                        Yes
Don't believe it includes validation for OC

Pennsylvania - Fair Credit Extension                    Yes
                         Uniformity Act
Concentrates on unfair and deceptive practices

South Carolina - SC Debt Collection Law              Yes

Texas - TX Debt Collection Act                             Yes

Vermont - VT FDCPA                                            Yes
OC's have to comply w/everything except validation

West Virginia - WV FDCPA                                  Yes
It appears that OC must validate

Wisconsin - Wisconsin Consumer Act                  Yes
Does not look like OC must validate

So, these are the states that definitely have some sort of debt collection law in place.  Now, most of them apply to unfair or deceptive business practices and not validation for original creditors.  You can dispute the alleged debt using the FCBA (Fair Credit Billing Act), which applies to all original creditors.  You can also use the FCRA (Fair Credit Reporting Act) if they are reporting on your credit.  You will want them to send you the hard copy documentation, which is their responsibility and also, its right there in the FCRA.  When you dispute with the bureaus, they are supposed to furnish your entire complaint/dispute to the creditor or furnisher of the information.  The bureaus have to also send you back the documented proof of the verification if you so request.

Now, here's my new secret weapon! It is the Uniform Commercial Code (UCC) and it is "universal" but every state has statutes, so they will have a matching state commercial code.  Here is the code and then I'll explain it to you if you still don't get it.

UCC 3-501(b)(2)-(3)

• (2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.
• (3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary endorsement, or (ii) refuse payment or acceptance, for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.

What this is saying is that whoever (creditor or collector) presents you with a bill, you can require them to "show you the note" or negotiable instrument, which would be a promissory note or the signed agreement.  The note they show you must be the original.  This code does not say a copy of the instrument, it says "the instrument."  They need to show you the original or a certified copy of the original, front and back sides.  They also have to prove that they own the "note" or that they have the authority to collect on it.  If they can't produce, they are in dishonor and you can refuse to pay, without penalty and still be "in-honor."

UCC 3-502 also talks about making late payments.  It states that if one fails to make a timely payment, but then pay it late and they do cash it, then you are considered in honor. My opinion of this is that if its paid, even though late, and they cash it, they should not be able to report late payments, because they agreed to take the payment on a different date and cashed it, it is paid on time.  I may be wishful thinking, but I read it so many times and that's how it looks to me.  Here's what it says:

• (f) If a draft is dishonored because timely acceptance of the draft was not made and the person entitled to demand acceptance consents to a late acceptance, from the time of acceptance the draft is treated as never having been dishonored.

See the word "never" in there?  It will be treated as never having been late, because it was considered dishonored originally because it was not paid on time.  But, when they accept the payment and cash it, it should wipe out the late!  Anyhow, that is my interpretation of it.

I would say, use the FDCPA and the state laws for 3rd party collectors and use the state version alone with original creditors, and hope it is received by an ignorant employee who doesn't realize that the state version still doesn't require validation, and you can get away with it.  Also, don't forget to use the FCBA, these UCC codes, and find your corresponding state commercial code to use against them as well.

I hope this post helps you.  Check back in about a week for my next post which will let you know the Statute of Limitations for each state.  Its important to know these as you can use them to make 3rd party debt collectors and original creditors, go away!

As always, if your credit report is looking pretty bad with a bunch of negative trade lines and you don't want to tackle it all by yourself, contact me by email or phone.  My contact info is up at the top, on the right hand side.  I would love to be the one you choose to help you with a fresh start!