Sunday, September 13, 2015

How To Make Original Creditors Validate An Alleged Debt

Anyone who has studied the art of credit repair for any length of time knows that when you get attacked by a collection company, you fight back by hitting them with a demand for validation.  But that's for 3rd party collectors, not original creditors. In fact, if you send a letter to an original creditor demanding validation, sometimes you'll get a response from them proclaiming they don't have to validate but as a courtesy, they investigated and they are accurately furnishing information.  They do this to make you give up and go away.

However, there is a way to get them to "validate" without calling it validation and they are required to produce it for you.  Remember a while back, for those of you who have read through my blog posts at least a bit, I explained and defined validation and verification. Validation is the PROOF, the documentation that goes hand in hand with verification.  

So, to be able to have the right to demand the proof that they are accurately reporting, first you must dispute the alleged debt or the account with the credit reporting agencies (CRA's).  This is also compliant with FCRA section 623.  Once you have disputed with the CRA's, they have 30 days to investigate and send you the results of their investigation.  They will send you the results of their investigation and usually at least a partially updated credit report showing that the items disputed have been updated, remains, deleted or verified.

If the results are anything other than deleted, (including "updated" but the problem is still there) this is your open door to make them validate the alleged debt.  Now you can write a letter directly to the creditor saying something similar to the following:

Dear whoever,

I have some concerns about this account and the way you are furnishing the information to the credit bureaus. I don't think the information is accurate. (I'm going to give several different things here that might be an issue you'd bring up).  You say this is charged off but then you claim a balance is still owed to you when we both know that charging off an account puts a $0 balance in your books. The lates you are reporting are not correct.  The history you are reporting is so wack there's no way that it is accurate.  There are all sorts of blank fields on my credit report where you should have reported information. That means the information you have furnished is inaccurate and incomplete and the FCRA says you are required to correct the information or delete it.

When I saw how you were reporting information to the credit bureaus I disputed the accuracy.  Now I have the results of their investigation and it shows that you claim to have verified this account. Since you claim to have verified this account (or updated it for the mere act of putting an "in dispute" comment), I now have the right to have you prove you are furnishing accurate information to my credit reports.

Here is what I am now demanding from you:
Please provide copies of the actual documentation you used to "verify" this account with the credit bureaus.  Here is a list of items I need from you.

Then you start listing items like you would with validation demands from collectors except you don't need proof of assignment or bill of sale from the collection agency. Demand the usual stuff like a certified copy of the original contract, full accounting from origination to present, copies of cancelled checks proving late dates, etc.  Here's some fun stuff to ask them to send you: proof they lent you actual money and where did they get that money from since its against the law to lend money from their assets or their depositors' assets, and its definitely against the law to lend credit. 

Oh, oh, how about insurance?  Now you all know that investors always insure against loss of their assets. Creditors are really just investors.  They are allowed to file a claim against asset loss at 90 days of the customer defaulting on their alleged debt. Yes, that insurance claim results in them receiving a check to cover the balance of the alleged debt they claim is owed. That means that the debt has been paid in full. Let's not forget about tax credits, Oh yes, they file a "profit and loss" claim with the IRS because supposedly they lost money when you defaulted.

How convenient of them to quickly forget that they got paid by insurance on that alleged debt which they never really lent any money or credit for. You funded your own line of credit. I know its hard for a lot of people to comprehend AND accept this because its just not something that they ever teach you. Its something that they don't want you to know.  They don't want you to realize that they are the fraudsters that never lend anything, are never really creditors but merely servicers, insurance fraudsters, tax fraudsters, and lying thieves.

Enough of my ramblings about the enemy. The point is that you can demand that they prove you owe that charged off amount. You can demand that they are accurately reporting late payments and that the history showing on your credit reports is correct. You can demand that they delete the information from the credit reports should they not be able to send you the documentation.  If they don't, well they are violating the FCRA.

I wish I could tell you that you can enforce their compliance, but then I'd be a liar. You can try to enforce it, and you can rat them out to the CFPB and the FTC, and the BBB and your Attorney General, and even sue them. But it all comes down to whether they back down and obey the law or just continue being stubborn, arrogant, and outside of the law. I suggest never giving up. Keep going at them, wear them down, keep calling them out, and yes report them to all of the above agencies.  The squeaky wheel does get the grease and whoever gives up first, loses.  Don't give up! Hang in there and win! 

If you are tired and feeling like giving up or you have collections and charge offs on your credit report and would rather have some help instead of doing it yourself, I understand and would love to help you. Feel free to contact me at the email address listed above, just a little below my picture.

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