Tuesday, February 21, 2017

Getting Collection Accounts Off Your Credit Reports

Getting rid of collections from your credit reports is one of the main goals of credit repair.  They are very damaging to both your perceived credit worthiness and your credit score. They used to be one of the easier tasks to complete even if you really didn't know too much about fixing your credit.  But that is not the case anymore.  Sometimes they are as stubborn to remove as charge offs and they take a lot more work than in years past.

Collections, based on who the 3rd party company is, who the original creditor is, what type of alleged debt it is,and other factors can drop your credit scores overnight to a score that will prevent you from qualifying for a home loan, car loan, credit cards, even from renting, and even other important needs or wants, such as employment, promotions, and a whole slew of other things that can affect your life. My partner and I have seen our clients' scores drop up to over 100 points with a new collection but typically in the range of 40 - 80 points. 

You have to attack collection accounts vigorously and consistently in order to remove them. You have to be careful the way you say things when you are disputing to avoid verifying the alleged debt for them. This is true when disputing with credit bureaus and also with the collection company.   You must choose your words wisely. You must NEVER admit you owe a collection company anything and never admit you owe the original creditor that is related to that collection account.

For the best chance at successfully getting rid of collections, you need to dispute with the credit bureaus and the collection companies. If you want to get them deleted from your reports you need to have bureau disputes that attack in multiple ways to avoid getting a "frivolous" response letter.  You will also need to demand validation directly from the collection company. You may need to do several "rounds" of letters to both of these entities before you see the results you're looking for.

Demanding validation is important for several reasons.  Once you demand validation, the FDCPA requires the collection company to cease all collection activity until they validate.  However, there is NO LAW, not even in the FDCPA that requires a collection company to validate.  What this means is  that if a collection company does not validate, they can no longer furnish or verify information on your credit reports.  They are required to delete the information.  They are no longer allowed to send you a bill.  That's obvious collection  activity.  They are not allowed to initiate a lawsuit against you either if they haven't validated.  The bad news is that many of these collection companies don't give a rat's whiskers (thought I was gonna say something else, huh?) about the law and they ignore it, violate it, and continue their illegal collection activity.

Validation can eliminate the alleged debt if the collection company obeys the law. This happens quite often when you write effective letters.   But even with effective letters, many companies give up their pursuit of you but try to recoup some money by selling the account to another collection company.  The more this happens, the easier it usually gets to remove each new claim for that old account. However, sometimes you slam them so hard and so effectively that you eliminate that alleged debt and never have to see anything related to it again.  That is the ultimate success you are looking for.

Successful disputing also requires you to consistently respond to their replies to your disputes. You can't drop the ball.  You MUST respond and you must respond on point. In other words, you have to attack what they say, what documentation they provide, what they don't provide, and properly rebut any claims they make that they have verified or validated the account.  A good arsenal of laws, case laws and other legal citations to back up your demands and your rebuttals helps to knock them down and kick them out of your life and off your credit reports.  I think this is probably where I see most people get hung up, stumped and start to give up.

Credit repair is not as easy as a lot of people think! Sometimes it feels like a full time job when you are doing it on your own. My partner and I have been doing this for over 50 years combined. We are the best of the best at what we do. We have other credit repair companies calling and asking for our assistance because they are frustrated with their clients' progress sometimes. And you know what? It's sometimes hard for us too so we know that you can get frustrated, worn down and feel like giving up.  Fortunately, we love fighting, love seeing great results for our clients, are passionate about what we do, and heck, its our job so we don't give up.  

You need to hang in there, keep fighting, keep responding, keep demanding proof, documentation, etc. Your credit depends on it. Your ability to rebuild your credit, improve your scores, qualify for credit, loans, get employed, etc. depend on it. 

If you get too worn out, burned out, frustrated or tired, please reach out to me. This is what I do.  If you don't even want to attempt it on your own for whatever reason be it lack of  time, fear, or you just want to let a professional assist you, please contact me. I will audit your reports and my partner will give you a consultation. We will answer your questions and give you a realistic projection of what you can expect our services to achieve for you. 

You can contact me by email at futurefico@gmail.com or go to our company website at InsightCreditGroup.com and sign up for a consultation.  I look forward to helping you achieve the credit you desire!

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16 comments:

  1. Hi! Following your advice and so far it has been right on target! Thank you!! Received my first green card and response from collector which included an unsigned form letter and single medical page that is 5 yrs old and 2 years out of SOL, w/virtually no information on it. Now it's time to mail second response to collector and file (mail) my first complaint with the two credit bureaus. My claim to collector: "I do not know your company. Nor have I ever agreed to do business with you, and, do not agree to do so now. I dispute this charge because I do not recognize this debt and I do not owe money to this creditor." Which option is best to use on bureaus form A] This is not my account, B] This account is closed or C] Other [with my above claim filled in ?] ____? Also, do I send them copies of my two responses to collector?

    ReplyDelete
    Replies
    1. Hi Zach,

      what I would send to the collectors is a letter saying, thanks for what you sent. It proves that I have no account with you because your name is nowhere on anything you sent, you didn't send a contract between your company and me, and the alleged debt is past the statute of limitations.

      I'm ordering you to cease and desist as is my right under the FDCPA and get off my credit reports immediately because now I have a cause of action against you and the proof to back it up.

      I would include a whole paragraph of the C&D, which you can find on an old blog post I've written about how to make collectors stop calling you.

      For the bureau disputes, I don't like disputing online because of the limited choices and limited space to explain your dispute. I would choose (A) since it is not your account and in the 100 words, tell them, no contract or account with them, not validated, and ordered to cease and desist and intend to sue if this is not removed.

      Delete
  2. Hi Shannon, what response do I give to an attorney after the debt has been sent to them by the original creditor? Do you have a blog about that? Do I use the same response when disputing with a JDB or the original creditor? And for some reason I cant get Portfolio Recovery Associates to budge but I still keep writing them disputing their claims.

    ReplyDelete
    Replies
    1. Hi Audrey,

      Send the attorney firm a demand for validation. If the attorney is not a debt collection attorney but rather is preparing to sue you on behalf of the creditor, you need to include some language about proving their claim. Demand that they answer on an affidavit and ask if they lent you money from their assets or their depositors' assets? Ask if the original deposit and funding for the account was your negotiable instrument. Ask them to admit or deny they received monies from an insurance claim to protect their assets and to provide the written consent for that insurance they were required to get from you. There are other things you can ask, including a certified copy of the original contract and ask them if the account was securitized and if they are merely a servicer.

      For Portfolio Recovery, reject their claim of validation, tell them they still haven't validated and are violating the FDCPA and their consent order with the CFPB and to C&D until they provide the required foundational documents and a valid contract showing you agreed to do business with them, they lent you something, and that they had an interest to protect in the original account.

      Delete
  3. Okay. I know you're busy. There's something else I need to know and I won't bother you for awhile. The letter states the law firm of Cooling and Winter has been retained by BOA and at this time no attorney has personally evaluated or reviewed the particular circumstances of the account, and I have 30 days to dispute the validity debt or any portion thereof.

    AMEX has a judgment against me and have put a lien on my house. They claimed they validated by stating that payments were made using my Wells Fargo account. Then they sent me another letter stating that they cannot provide a copy of my original card application because the Affidavit of Identity was not properly notarized. Then they sent me a Affadavit of Identity form to fill out.

    As for PRA, they wrote me and told me that if they continue to receive subsequent correspondence from me requarding a dispute that has already been resolved, they will consider my inquiry answered. No further replies will be forthcoming unless I provide the information they need to assist me. Their office considers the matter closed.

    Should I just stop for awhile or keep writing them? My Statue of Limitations on these accounts starts in November and December of this year.

    Thank you

    ReplyDelete
    Replies
    1. Okay, for the lawyers, dispute the claim and demand validation immediately. Demand that they provide proof of the things I gave you earlier - contract, proof they actually lent you money, proof of insurance and payout. That insurance one, they need to admit or deny that on a sworn affidavit because they are liars and you need something to hold over them.

      The judgment, well, you will either need to pay it or get it vacated to remove the lien from your house.

      PRA - I'm so stinking sick of that stupid letter. Just write back to them and tell them obviously they don't know the definition of "resolved" and it isn't resolved and it hasn't been validated, and they've never produced a valid contract and claim you don't owe them anything and if they remain silent, then that is tacit agreement that you owe nothing and they need to pound sand. The matter is NOT closed until they remove their skidmarks from your credit reports.

      Another thing you might do is write a declaration of denial of debt, clearly state you have no contract with them and they continue to fail to produce one showing you agreed to do business with them. Get it notarized and send a copy to them. Tell them that they are on the verge of being sued for continued violations of the FDCPA and the FCRA, and they have committed both mail fraud and wire fraud and are at risk of you filing criminal charges against them for that as well.

      They play dirty. You must get rough and tough and not back down. File a complaint with the CFPB as well. They are violating their consent order.

      Delete
  4. Portfolio Recovery is very difficult. After 6 months, and no traction, what is the next step? Do you offer a pay for delete? Or settle but report as paid in full? What do you suggest with really stubborn JDBs?

    ReplyDelete
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    1. Hi Daniel,

      I don't know why PRA is being such a pain in the butt. They have a huge consent order against them from the CFPB. They are out of compliance with that order all the time. If you read the consent order, they are required to have the foundational documents for each account they are attempting to collect on. I ask for those documents and they don't have them so they don't send them.

      After I've tried with them several times, I will do complaints with the CFPB against them. Unfortunately, this doesn't work every time and I just don't feel like the CFPB enforces compliance with the law or their consent orders. But sometimes it does work.

      I also use Cease & Desist orders, which used to work all the time. Now they don't work every time. But, non-compliance is a violation of the FDCPA so you can get them for that.

      I don't suggest settling or PFD with any collection company. Some won't even do them. Some will say they will and then not honor it. I would rather initiate a good strong lawsuit against them and offer them a settlement amount for THEM TO PAY YOU to avoid going through with the lawsuit.

      My partner and I are looking for someone to assist us with this service now because there is a real need for it. I'm real good at defending consumers when they've been sued but I have some learning to do before I start doing the paperwork for plaintiffs/consumers.

      So, if a CFPB complaint, maybe also a BBB complaint as well, doesn't work, then I think it's time to think about initiating a lawsuit against them. Most of the times you don't actually get to court. They want to make it go away and will settle with you, which would include getting off your reports and out of your life.

      Delete
  5. Hi Shannon

    I have tried twice to dispute child support for a client(this will be the 3rd round) and the bureaus removed the inquiries but not the child support negative accounts. Do you have any suggestions?

    ReplyDelete
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    1. You need more than just bureau disputes.

      Dispute directly with the agency and demand validation, specifically require a copy of a valid bilateral contract bearing both their authorized rep's signature and you client's signature. Demand a full accounting as well.

      Child support disguises itself as a government debt or original creditor but really, they are sleazy 3rd party collectors. Treat them as such. Use the FDCPA requirements to validate or get off the reports to have the best chance of removing them.

      Delete
  6. My credit score is quite good but I have only one credit card. Can I apply for more credit cards? Does it could have any bad impact on my credit report??

    ReplyDelete
    Replies
    1. Yes you can apply for more cards. It would be best if you apply for multiple cards either the same day or within a few days then don't apply again for several months.

      Your score may drop a bit at first but as you use them and pay them consistently on time you will see your score go back up and actually increase.

      Delete
  7. Hi Shannon,
    not sure if you'll see this, but here goes.
    I sent a certified letter to NTL RECOVERY AGENCY a creditor, requesting validation of the debt for a medical bill. It’s been over 30 days and the company never responded to my letter. I checked my credit report from all three bureaus and it states” Account information disputed by consumer, meets FCRA requirements” What should my next step be? Should I respond to the credit bureaus or the collection company?

    ReplyDelete
    Replies
    1. Hi Samiyha,

      Here's my take on your situation. NTL Rec Agcy is a 3rd party collector, not a creditor. They complied with the FCRA by putting a dispute comment on your report. But, they violated the FDCPA because they didn't validate and yet they announced to the world (or at least anyone who sees your report) that the item is disputed, which is still collection activity.

      I would respond to both. To the bureaus, tell them that they (NRA)has not validated, has no account or contract with you and are violating the FDCPA - remove immediately or provide the validation documentation they are supposed to give the bureaus when they furnish information.

      Tell NRA that they have violated the FDCPA because they have not validated, which they don't have to do, but they continued collection activity by claiming to verify with the bureaus and put dispute comments on there, which IS illegal according to the FDCPA and clearly supported by case law.

      Delete
    2. Hi Shannon,
      A collection company report a account on my credit report without notifying me in writing first. I called the company and they admitted that they did not send me any letters in writing. I have three questions 1) what should my next step be, 2) What FCRA and FDCPA violations did they commit ? 3) Do I have too or should I file a compliant with the FDCPA before I can initiate a lawsuit in small claims court? FYI they stated" they will not remove this off of my credit report.

      Delete
    3. Hi Samiyha,

      Your next step is to send them a strong validation demand letter. You can call them out again for violating the FDCPA by not sending you a Dunning letter in the mail prior to or within 5 days of initiating collection activity. Furnishing information on a credit report definitely is collection activity.

      I think when you ask about filing a complaint with the FDCPA you really mean the CFPB. I wouldn't go there yet especially since most of the time they are useless. You need to do your due diligence of demanding validation, responding to their response and slamming them for each item they failed to produce and not sending you actual full validation. Once you have exhausted all efforts and if they still refuse to go away, then you can file a complaint with the CFPB and/or send a letter warning them that you intend to sue. Then you sue.

      As far as violations, right now it seems only violating the FDCPA for failing to send you a DUNNING letter, and then once you put your validation demand and dispute it IN WRITING - MAIL IT TO THEM!, then if they don't take it off your report, they will be violating more FDCPA sections and the FCRA for knowingly furnishing and refusing to correct or delete inaccurate information.

      They will almost always say they won't remove it from your credit reports. That's because they want to use that as an extortion tool to make you pay them. That's just 1 of the lies they will tell you throughout the process.

      Delete

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