Thursday, July 3, 2014

Disputing 3rd Party "Debts" After The 30 Day Requirement Has Passed

Many times consumers get letters in the mail from debt collectors saying that they have some debt with this company and they need to pay the bill. Some will claim they are offering this great one time settlement offer saving you 40% or 50% off the total if paid by some date.  Really?  Should you take them up on it when I can show you how to save 100% of that ridiculous bill?

The letter, which is called a Dunning letter, is required by law to have language in it that says you have the right to dispute this debt within the next 30 days.  But what if you decided to blow them off and throw away the letter? Do you lose your right to dispute it after the 30 days has passed? Let me explain how this law actually helps you.

Here's the thing about this law. Its FDCPA §609 or 1692(g).  This law says that they must inform the consumer of their right to dispute the alleged debt and if the consumer does dispute it during the 30 day period, then the collector must stop all collection activity. Now, it doesn't say that they can't furnish information on the credit report in the first 30 days, but if they do, your best chance of making this never go on or make it come off quickly from your credit report, is to dispute in the first 30 days.  This is because furnishing information on someone's credit report is considered collection activity.

But if you don't respond in that first 30 days, the law does not say that you can't ever dispute it.  I've had collectors tell my clients that they don't have to validate because it wasn't disputed within the first 30 days.  They are absolutely correct. But, these punks are spinning the truth. You see, there is nothing in the FDCPA that REQUIRES them to validate. Nope, not at all. BUT...what it does say, is that if a consumer does dispute, they MUST cease all collection activity until they validate - if they choose to.  If they choose not to validate, then, that's fine, it means they choose to delete it. Its one or the other.

The FDCPA also says that if a consumer disputes, they have to notify the credit bureaus that the account is disputed. Here's the fun part of that. The bureau employees are so uneducated in the FDCPA they don't get that they are going to help the collection agency violate the law. They put a comment on there that the account is in dispute. I really crack up at this.

The FDCPA just told them that they have to stop collection activity if the consumer disputes. So, the collection agency notifies the bureaus that its in dispute and a dispute comment goes on the report.  What does this mean? How is that a violation of the law?  Well, when they tell the bureaus the account is in dispute, they are not supposed to be instructing them to put a dispute comment on there, they are supposed to be deleting the account from the credit report.

What they have effectively now done is continue collection activity (because its still on the report) but now they are broadcasting to anyone who sees the report that they are breaking the law. Do you understand this? Its simple. They just need to delete  it!  

So, even if you have missed that 30 day period, your right to demand validation or dispute is not revoked. You can dispute at any time. Its just that they've been better trained at removing them from credit reports when they get a dispute during the first 30 days, than they are educated about how to handle disputes they get after the first 30 days. They obviously  are not taught well that any dispute at any time, means that for a 3rd party collector, it absolutely must be removed from the credit report until they fulfill validation.

I sure hope you understand this and use it to your benefit!  Dispute away, tell them to remove it until its been validated, and if they just put a "dispute" comment on there, well, if you sue them, you just earned an easy $1000 bucks!

Feel free to comment on this or email me with questions.  I'm here to help you successfully get rid of the ugly stuff on your credit reports and get it looking pretty again!

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  1. Shannon this blog is so informative. As I comment there are dispute comments on my credit report that say, "consumer disputes", reinvestigation in progress", "the item was updated from our processing of your dispute" What can I do, if anything about this showing on my credit report? Should I call the credit bureaus and tell them to delete the accounts and how can I get them to comply?

  2. Hi Caramel, thank you for the compliments again. Regarding the dispute comments, they will usually stay on there until that account is deleted or you tell them to remove the comment because its no longer in dispute.

    There are times that they actually correct the account by changing the balance to $0 or removing an ugly history and so you can feel good about telling them that its not in dispute so please remove the comments, But sometimes you still want to dispute it but its just not getting anywhere. That's when you carefully word your request to have them remove the comments. You would say, this account is not currently being disputed. Please remove the comments as they are not correct right now.

    The reason you may want to remove those comments even though you haven't got the results you've been going for, is to give it a rest and then be able to go back in 2-3 months and dispute again while lowering the chance that they'll (CRA's) call your dispute "frivolous."

  3. Hi. Shannon where can I get a format for deleting a judgment.

  4. Here is a post I did on the subject. If you need the court clerk letter and FTC staff attorney letter, just email me and I'll send them to you.

    Post is found at October 2013 and is titled How To Remove Judgments


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