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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If The Credit Bureau Verifies Your Bad Credit Dispute

If you've been working on repairing your credit, it is highly likely that when you get your reports back from the credit bureaus, you will see, or have seen, that they have verified one or several of the disputed negative items. This is actually a common occurrence in the process. There is a simple explanation for this, though, it's not a delightful reason.
 
When you make your dispute, you may explain in detail why the item should be removed from your credit report. The FCRA demands that the bureaus verify the accuracy of what you are disputing with the provider of that information. However, they don't call them or send a copy of your letter, or even electronically question the provider with the same specifics that you presented in your dispute. Instead, they electronically reduce your dispute down to a general 2 digit code that represents the "category" of your dispute. There are no details included, just the code.
 
So, they send this code electronically to the provider of the information, who then has to reply to the bureaus with a code back agreeing that the information was not accurate or they use a code to say, "yep, we verify that our information is correct". The credit bureaus have 30 days to get back to you to inform you of the results of their "investigation". Doesn't really sound like an investigation though, does it?

Now, you have rights under the FCRA to demand from them proof of the investigation and their method of verification. You can request the name of the person they spoke to, their title, and their contact information. What they will then send you is a basic form letter saying that they electronically verified, and that's all they are going to do for you. So, you will have to demand again that they provide the method of verification, but this time, you must do it correctly. Better yet, do it right the first time, when they send the form letter, send the demand again with an intent to sue letter.
 
You are probably wondering how to do this the right way. The way I do it is, I include the definition of verification from Black's Law dictionary in the letter. I include the law from the FCRA that gives me the right to receive their method of verification. I also include case law for each of the bureaus that the courts shot them down for verification that does not meet the standards of the FCRA. I also include an intent to sue for willful non-compliance with the FCRA.

If you have contacted the original creditor regarding the account you are disputing, get the contact name and information of the person that you talked to. If they do not have the information, ask them to put it in writing and send it to you. Once they have sold it to a collection company, 99% of the time, they do not have the information on the alleged account. 

Send a copy of this letter to the bureaus along with your demand for method of validation and intent to sue letters. They are not going to contact them because they don't have time for that. Most likely, at this point, they will remove the negative credit from your report. If not, you should follow through with either a complaint to the attorney general of your state, the better business bureau, and/or sue them in small claims court. You could actually, if the damages add up enough, sue them in Federal Court, because the FCRA is a federal law and they violated it!

One more thing, just because they reduce your dispute down to a 2 digit code, don't skimp on your dispute.  This is going to be proof that they have not even attempted to verify your dispute accurately.  Usually the code they use is so general and it does not come close to expressing the information you gave them. This can be used against them.

Collections, Charge Off Required to Approve Short Sale - Part 3

Well, we covered dealing with the original creditors and collectors, now we're going to talk about the credit bureau.  This is what you are going to do to remove the collection entry from your credit report.

This process is what is called the 1 - 2 Punch.  After you send the letter to the collection company, and you will be sending that CMRR, which means Certified Mail, Return Receipt, you are going to wait to get that green card back. When you get that back, you know that the collection company has received your letter.  Now you will send to the credit bureaus, whomever is reporting this collection, sometimes just 1 or 2, usually all 3.  

You will dispute this by telling the bureaus that you do not now, nor have you ever, entered into a contract with scumbag collection company and that they need to see an actual contract signed by you to verify, or remove the entry immediately.  It is at this point that I also insert the definition of "verify" from Black's Law Dictionary into the letter.  What the definition of "verify" says is (and I'm going to paraphrase here) the person who verifies must have 1st hand knowledge (which they don't, they are 3rd party) and  be willing to testify under oath in a court of law.  That's a real simple example of what the law says, but that's the main gist of it.

I also tell them that should they claim to verify, according to the law they must provide verification proof. This means that they are supposed to send you the name, title, and contact information for the person who verified the entry.  The truth is, bureaus break the law here at this point all the time. There is case law against all 3 because of insufficient verification.  It's all done electronically and they can't provide that contact information.  So if you're trying to  prepare for a case against them as well, this is one of the violations they will almost always commit.

Now, the reason this is called the 1 - 2 punch is that the law says that collectors must cease collection activity when they receive a demand for validation.  Verifying with the credit bureaus is considered collection activity, according to the law (FDCPA).  So, many times you will remove this entry on the first shot out, because they can't verify within 30 days with the bureau, as a result of not being able to validate with you.  Oh, how I wish that was always the case.  The  truth is, credit bureaus and collection companies break the law - hard to believe, huh!

The bureaus will play the blame game and collection companies will play stupid.  That doesn't hold up in court though, so always keep copies of everything you send and document, document, document.  Okay, should you have to send a second or 3rd letter to the bureaus, include a Notice of Fraud. You need to put them on notice that they are now a party to fraud by verifying something that cannot be validated because you have no contract with the collector. Put in a self executing contract, that says they realize their actions or in-actions will cause them to be held liable and that you will sue them.

I'm not going to say that everything always comes off this way, but the truth is, most stuff does.  They don't seem to mind threats of being sued. I'm sure they see threats of suit everyday.  But, when you put the law in black and white, incorporated into your letters, there is a human being that is reading it and updating the file.  So, though there may be no decency left at the corporate level, hopefully you will get a data entry person reading your letter with some respect for the law.

I hope this helps many people fight back and improve their credit scores.  I hope that it helps ease the pain of some of the short sale drama lenders put people through.   Remember again, keep copies of everything you receive or send, keep your receipts and green cards from the certified mailings, and always document.  This includes phone calls: name of company, name of person speaking, time, date, what was said.  You may need it some day.  If they ever try to sue you, file a counter suit and show up at court and show your documented proof that you have tried to validate and they have refused to comply with the law. Then, not only should it be removed from your credit report, you'll make some money for your efforts and their lawlessness.

Myths and Bad Advice Regarding Credit Repair - Part 2

Credit bureaus, as stated before, are in the business of making money. So they don't always tell the whole truth about information that is on your reports, especially negative information, and whether or not it can be removed.

First myth. The tradeline has to stay on your credit for 7 to 10 years. This is false. There is no law that says information has to be there at all.

Second myth. You can't remove accurate negative tradelines. This is tricky, but more false than true. This is because of the word "accurate" in that statement. The truth is that more than likely, though most of what is reported may be "accurate", it can be removed because the law says it has to be 100% accurate. It is very, very rare that it is 100% accurate. Little mistakes like the type of account it is can make it not completely correct. Maybe the amount is off by a few dollars. Maybe the date is not exactly right. It doesn't matter. If it's not a charge off, and being reported as one, then it is not 100% correct. If it is a bankruptcy and the amount is $0, well why the heck would you need to file bankruptcy if the amount was $0. That's a very common mistake.

Third myth. You can't remove personal information from your report. This is false. If it's not exactly right, maybe the street name is misspelled or the numbers or correct apartment is not there, or missing, it's inaccurate. Dispute it. Just remember 100% accuracy is required by law.

Fourth myth. They verify the accuracy with the submitting party as required by law. Nope, false again! They verify, but it is not done the way the law says is sufficient. They verify electronically using codes. The info submitter sends a code back saying it is accurate or not. Well, the courts have upheld against all 3 major bureaus - TransUnion, Experian, and Equifax, that electronically verifying is not thorough enough. It's case law. Black's Law Dictionary sums up verification as being Confirmation of correctness, truth, or authenticity, by affidavit, oath, or deposition. This means that the actual person verifying the information as accurate must have first hand knowledge (they don't) willing to state under oath in a court of law, that they know as fact that every bit of information regarding the disputed tradeline is correct. You are the only one who knows first hand everything about the account. Do you think whoever punched in the code back to the bureaus would be able to accurately and honestly testify under oath that the information they have supplied to the bureaus is 100% true? No! They can't and won't, and if forced to, would commit perjury!

Fifth myth. Information removed from your credit report can be re-inserted at a later date. This is true. It sucks, I know. But there is a catch. The law says that if they are going to re-insert something on your credit report, they have to notify you in writing within 5 days. Now, go back to the fourth myth. Supposedly they have verified the information, it just took longer than the 30 days the law gives them. Have they really confirmed the information with someone willing to testify under oath that they have first hand knowledge that what they have just verified is accurate? NOOOOO! If they re-insert and do not notify you, they have violated the law, nothing new. However, that violation is worth $1000 to you. That is the fine that will be imposed on them should you follow through and take them to court. Then, they will have to pay you AND remove the tradeline. Not bad!

Last myth for today. Writing a 100 word statement regarding a negative tradeline is good to do. False. I don't do this because you are kind of admitting that you had an account with whoever. If you don't accept it as being yours, it's easier to dispute. Sure lender's may read it, but it's still a "he said/she said" situation. The tradeline with or without a statement affects your credit score. If it's negative, it's better to keep trying to get it removed than resign yourself to adding a statement. Always remember that like in a court of law, the burden of proof lies on the company or entity that submitted the information. By law, they are supposed to remove what they can't prove.

It is hard to get some of this stuff off. This is because they all think they are above the law. It's "catch me if you can" with them. You need to demand from the bureaus that they give you the name, title and all contact information for the person that verified the information. The law says that if you demand that information from the bureaus they have to supply it to you. But what do they do? They send you a letter stating that they verified electronically. That doesn't meet the burden of proof as required by law. It's a crappy game. So, sometimes, you will have to drag their butts to court. If you prepare and document consistently and take it to court, you can end up getting a monetary judgement against them and have the tradeline removed. Many people have been successful with this. It's not easy, it's not quick, but it does work.

Here's a couple tips for you on your credit repair journey. Dispute with the collectors first - before disputing with the credit bureaus. Always dispute CMRR. Then, when you get the "green card" back saying that the letter was delivered, dispute with the bureaus. This is because the law says when you dispute with the creditor/collector, they have to stop all collection activity until they have validated the debt with you. Verifying with bureaus is considered collection activity. So, if they obey the law, the bureaus will not get a response and will have to remove it.

If you are trying to remove a bankruptcy, don't go after it first. The first steps in that is to dispute and remove the tradelines that are negative that have any association with the bankruptcy. They are not going to remove a bk when there are tradelines stating that it was included in a bk.

Remember also, collectors that report do not have the entire file regarding any account. They buy in bulk and get whatever the creditor forwards to them. They do not have first hand knowledge. They are not a party to the original contract, so they are a voluntary payee and just paid off your account for you at a settled amount. You don't owe them a dime! They took a gamble, stand firm and make them eat their losses!