Suspend further action to collect or re-sell. Placing a rule that prohibits a collector from reporting information to a CRA during the 30 day window would be a nightmare from elm street and only cause more problems. Unresolved disputes should not be sold and should be removed from collection..Period.
First, a third party collecting on behalf of a lender isn't, nor should be, defined as a furnisher of information. While the FDCPA requires notice specific to the validity of the debt, the FCRA has requirements for users of consumer reports. Combining two statue requirements in the initial notice of a debt serves no purpose. Sending during the 30 day notice would create confusion in the event the consumer responds, for example, to the validity of the debt and does not include a request about a credit report accuracy. I believe the issue is whether a third party debt collector or debt buyer should report an account to a credit reporting agency which would overlap the original lender's last report on the consumer account. In my opinion they should not. I have seen confusion due to lack of rule clarity. For example, if a consumer files a bankruptcy petition who should report that event? If a third party opts to report then the third party would be required to report events that take place during or after the bankruptcy filing. To date, Title 11 offers no direction to reporting and neither does the FCRA other than a credit reporting agency removing after 10 years.
"Verify" needs to be thoroughly defined. It should be no less than documented court admissible evidence that the consumer is responsible for the debt. If the debt collector cannot produce this evidence, he should be barred from reselling the debt or reporting it to the CRAs.
I strongly endore drose977's response. Currently, debt collection agencies can sell debt without proper validation. Or they can sell the debt if a consumer disputes the debt and the agency can't product the proper validation. These things should not be allowed and are very detrimental to the consumer. Consumers should be protected above collectors and other agencies as they, typically, have far less resources to fight inaccurate information. Additionally, the inaccurate information adversely effects consumers more than any other group in these situations.
Collectors should not be allowed to report a debt as 30 days late if the debt isn't 30 days late. The law should include stiff enforcable penalities to deter collectors from pre-dating debt. These rules should apply for any debt reported late at any time, not just the first 30 days.
If our client(s) can't provide any verification of the debt, we close the account and send the debtor a letter that we are doing so. Note: this has only happened once or twice in 20 years.
an unresolved dispute account should NOT be sold. If so, seller should be liable.
RBell
1
Suspend further action to collect or re-sell. Placing a rule that prohibits a collector from reporting information to a CRA during the 30 day window would be a nightmare from elm street and only cause more problems. Unresolved disputes should not be sold and should be removed from collection..Period.
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kathryn
2
RBell might have mistakenly written that. I endorse that NO disputed account should be eligible for inclusion in CRA reports.
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RBell
3
First, a third party collecting on behalf of a lender isn't, nor should be, defined as a furnisher of information. While the FDCPA requires notice specific to the validity of the debt, the FCRA has requirements for users of consumer reports. Combining two statue requirements in the initial notice of a debt serves no purpose. Sending during the 30 day notice would create confusion in the event the consumer responds, for example, to the validity of the debt and does not include a request about a credit report accuracy. I believe the issue is whether a third party debt collector or debt buyer should report an account to a credit reporting agency which would overlap the original lender's last report on the consumer account. In my opinion they should not. I have seen confusion due to lack of rule clarity. For example, if a consumer files a bankruptcy petition who should report that event? If a third party opts to report then the third party would be required to report events that take place during or after the bankruptcy filing. To date, Title 11 offers no direction to reporting and neither does the FCRA other than a credit reporting agency removing after 10 years.
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drose977
4
"Verify" needs to be thoroughly defined. It should be no less than documented court admissible evidence that the consumer is responsible for the debt. If the debt collector cannot produce this evidence, he should be barred from reselling the debt or reporting it to the CRAs.
View this comment in the discussion thread
Sertas
5
I strongly endore drose977's response. Currently, debt collection agencies can sell debt without proper validation. Or they can sell the debt if a consumer disputes the debt and the agency can't product the proper validation. These things should not be allowed and are very detrimental to the consumer. Consumers should be protected above collectors and other agencies as they, typically, have far less resources to fight inaccurate information. Additionally, the inaccurate information adversely effects consumers more than any other group in these situations. Collectors should not be allowed to report a debt as 30 days late if the debt isn't 30 days late. The law should include stiff enforcable penalities to deter collectors from pre-dating debt. These rules should apply for any debt reported late at any time, not just the first 30 days.
View this comment in the discussion thread
Tfleeman
6
If our client(s) can't provide any verification of the debt, we close the account and send the debtor a letter that we are doing so. Note: this has only happened once or twice in 20 years. an unresolved dispute account should NOT be sold. If so, seller should be liable.
View this comment in the discussion thread