Wednesday, June 12, 2013

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!


  1. I have been going over your posts for the past 2 days!!!!! I had dispute letters already set to go to the Credit Bureaus on Monday, but after reading over your blog SEVERAL times I have switched up my entire game plan.

    There are so many errors on my report including MISSPELLINGS of my name :-) Not 100% accurate right?

    I will keep you posted on my progress and will let you know how I do. Oh BTW I love your secret weapon, incorporating UCC codes is a power punch

    1. Thanks Meeks! I'm glad its helpful to you. I look forward to hearing how it goes for you.

  2. I, too, have been reading your posts for a couple of days. Great information. I'm sure this is a dumb question, but are the state codes based on the state the alleged debt was opened, or the state the collection agency is located?

    1. I'm not sure I understand your question. What do you mean by "state codes"?

  3. Thanks for sharing this :) its really helpful

  4. Thank you so much for updating this great information and its really so informative.But i want to know what is Debt collection of Massachusetts

    1. I'm not exactly sure what you are asking but I'm going to assume its based on the info for the state of Massachusetts. They have their own state version of the FDCPA called The Consumer Debt Collection Practices Regulation. The beautiful thing about this state law is that while most states don't give you the right to demand validation from original creditors, in Massachusetts, they do allow you to demand validation from not just 3rd party collectors, but also original creditors.

    2. Does South Carolina allow you demand validation from third parties and original creditors?

    3. You can demand validation from 3rd parties in EVERY state. You can demand proof of claim from original creditors in every state.

      Validation and Proof of Claim are basically the same thing but Original Creditors don't have to "validate" so you change the terminology to make them prove their accusations against you.


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