Using the Section 609 Credit Repair Process

This is a subject that I have wanted to write about for some time now.  Many of you have heard about this method to repair your credit. Probably some of you have done it.  I'm not a big fan. I heard a lot of reports about people who have used it.  There have been some that have experienced success with this method and most of those were people who used it way back when it first came out.  I have heard of many more people that have used it and not had near the results they were expecting or were assured that they would have.  I too have used the method a couple of times for my clients but had to go back to using the methods I have used successfully for over 3 decades.

My first problem with this method is that it is only disputing with the credit bureaus. When you are going after 3rd party collections, I believe you need to protect yourself with validation demands so that you have it in place in case the collector decides to sue you.  If you have demanded validation, they cannot sue unless they have validated - a task they cannot actually and lawfully succeed at because they do not have first-hand knowledge, they have no contract, and they do not have your permission to collect information and make communications about you and the alleged account.  They have to get that authorization from you, in writing.

This method, the Section 609 method is bureau disputing only.  It is based on a good concept that requires the credit reporting agencies to prove  the verification they claim. This is a task that they NEVER do. They don't have the ability to do because they don't conduct reasonable investigations, they don't collect the documents to support the information furnished, they don't get authentic verification because verification requires sworn testimony (affidavit) accompanied with that supporting documentation. All they have is hearsay, which the courts have deemed as incompetent and inadmissible.

So, here is how it works:

You write a letter to each bureau telling them to provide the documents used to verify or that validate the following accounts.  You  are demanding that the send you the verifiable proof (copy of the original contract between the furnisher and you) that the FCRA requires them to have in your file. The word "file" is very important because they try to convince you that a "file" is the same thing as a credit report, but it is not.

Next, most templates have a table that has the furnisher name (creditor/collector) then the account number, then the dispute says "unverified account" in the final box of the table. One of the requirements under both Section 609 and 611 requires that information that is incomplete, inaccurate, or unverifiable be corrected or deleted. So, just above the table you tell them provide the proof for each account within 30 days or delete it as required by law.

The bottom of the letter tells them to remove all promotional non-account related inquiries and to suppress your information from promotional services - in other words, opting out.  After that is the signature though some variations of this credit repair process has you get each letter notarized.

So that is the method.  There are letters 2, 3 and 4.  Each letter is basically the same, but the language in each consecutive letter gets stronger. The second letter tells them that it's the 2nd written request and they claim to have verified but didn't provide any documentation. You are demanding they provide you the documentation along with the name, title, contact information with the persons who they spoke to or communicated with in their "re-investigation" in order to prove to you that an actual reasonable investigation was done and they acquired the documentation proving the account was verified.

The letter reminds them again that they are required to delete unverified accounts and if they cannot provide that documentation, then it is not verified and must be removed according to Sections 609 and 611.  It also reminds them of their civil liability (meaning you have the right to sue them) under FCRA  617 for willful negligence.

Once again the 3 column table is there with creditor/collection company name, account number and unverified account. You of course remove any accounts that have been removed from the report from the first dispute.

Round 3, letter 3. Almost the exact same as round 2 letter but it says it's the 3rd written request and then above the table you demand that they send the documentation or delete immediately. Again you make sure that you don't dispute any of the accounts that were removed from the first and second disputes.

Round 4. This letter is again slightly different.  It has a header on it that says its a Notice of Pending Litigation Seeking Relief and Monetary Damages pursuant to FCRA Sections 616 and 617. It calls them out for not investigating, not providing documents, falsely claiming the accounts are verified but never sending the proof.  It tells them the 3 previous letters they received disputing the items will be used as exhibits and evidence if they proceed to litigation as will the credit reports showing they have been disputed and claimed to verify.  

This 4th letter is definitely notarized. Also, with each round of disputes you are expected to provide copies of your ID and SS card.  I'm not big on that at all but for this process, it's recommended.  You don't want to give the CRA's any loophole for not doing their job and following the law.

So, that is the process.  I however think that you need to send validation letters to collectors and proof of claim letters to original creditors. You need to demand that they provide you with the documents used to supposedly verify the information that the furnished to the credit bureaus. You let them know that a response letter that provides a summary of the account is NOT verification, is NOT validation, is hearsay and it will be rejected because you agree with the courts that hearsay is incompetent and inadmissible.

In my follow up letters to these collectors and creditors, I call them out for not sending certified copies of original documents, sending a slew of billing statements that are NOT proof of a full accounting, not sending proof of how the account was funded and where those funds came from, proof that the account is still within the statute of limitations, proof of license and bonding to collect in the consumer's state, proof of a Power of Attorney document or written authorization showing that consumer gave their consent to collect information and make communications about the alleged account, and proof that the 3rd party collector was specifically named on any original contract showing they are entitled to collect by having an interest to protect.

I like to write bureau letters that do include Section 609, but I use many other sections of the FCRA, federal acts, code of federal regulations, case law, state statutes, UCC, and other legal ammunition.  I don't like relying on just 1 main section of the FCRA.  I do the same thing with my direct to creditor/collector letters. Demanding proof of claim or validation is important to protect yourself and including laws and the above legal ammunition, proper wording is important to see a higher rate of success in your credit repair journey.

I hope you will find this information helpful.  If you are in need of credit repair assistance and don't feel like taking it on yourself, please contact me at futurefico@gmail.com. I may be able to assist 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!