Dear Helena,

Thank you for you inquiry. The activities of collection agencies are regulated under the Fair Debt Collection Practices Act: http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm. The full text of this act can be found by going to the link provided above.

Basically, it is important to make a clear distinction between how an "original creditor" may act and how a "collection agency" may proceed regarding validating a debt, pursuing a debt, and reporting a debt to the credit bureaus. Remember, the above law does not govern the activities or original creditors, such as credit card companies, only third parties, or collection agencies. Even lawyers, hired by third party collection agencies, must adhere to the provisions of the FDPCA.

Under the FDCPA, you are allowed to validate this debt, and the creditor (in this case, the collection agency) must show you proof that the debt is valid and that you owe the debt to the collection agency (not to the original creditor.)

Here is the actual section of the FDPA which deals with the question you have asked:

FDCPA Section 809. Validation of debts [15 USC 1692g]

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection
(a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

So, if a creditor can't validate or verify a debt: They are not allowed to collect it; They are not allowed to contact you about it:, and They are also not allowed to report it to the credit bureaus under the Fair Credit Reporting Act (FCRA). If they do this, they are in violation of the FCRA, and the FCRA states that you can sue for $1,000 in damages for any violation of the Act.

Here is an opinion letter from the FTC which communicates that a collection agency may not report a debt to the credit bureaus which has not been validated:

http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

It is important to point out that the same FTC document above indicates that a collection agency may continue to report to the credit bureau during the 30 day validation period. (see I.)

I. "Is it permissible under the FDCPA for a debt collector to report charged-off debts to a consumer reporting agency during the term of the 30-day validation period detailed in Section 1692g?" Yes. As stated in the Commission's Staff Commentary on the FDCPA (copy enclosed), a debt collector may accurately report a debt to a consumer reporting agency within the thirty day validation period (p. 50103). We do not regard the action of reporting a debt to a consumer reporting agency as inconsistent with the consumer's dispute or verification rights under § 1692g.

Helena, we hope this information has been helpful to you. This is not legal advice but information that we hope will be helpful to you. The bottom line the FDCPA provides consumers with certain protections against collection agencies. How those laws are interpreted, applied, and amended from time to time may change, so it is also recommended that you get legal advice that will help you correctly apply the provisions of FDCPA to your particular situation.

We wish you the best,

CLC Help Center

Thank you so much for responding to my questions and providing me with the information. Yes I am aware that this is not legal advise, you are the only agency that has given me a straight answer. THANK YOU.

Honestly, the information that you provided is good, but for us who are out in the real world is still alot of legal mumbojumbo that I know I don't understand.

I lost my job (IT Technical Writer) shortly after the 911 tradegy and took me almost three years to find another job (Executive Assistant). No I didn't just sit around, I cleaned houses, short order cook, tutored software programs and fixed computers). After becoming gainfully employed again, I was financially in debt! It took me two and a half years to decide to file for BK and then when I appeared in court, I cried!! For me filing for BK meant failure and humiliating!! to the other people in court, it was nothing. Few of the people there had previously filed for BK. I don't ever want to go through that again!!! Since that time, I have worked very hard to pay my debts on time and paid more than what was due.

As of 11/10/2006, my FICO score ranges from 640; 655 and 637. No they are not the best, but considering where they were after my BK (January 2007, two years) I think I've done OK. So you can imagine what this collection agency did by reporting this to the credit bureaus (October 2005) without contacting me when they had all the necessary information.

My final request is, I have attached a letter in response to the collection agency letter. Could you, please review it for me and just let me know if what I am writing is true or if I am wayout in left field.

Thank you in advance for all your assistant and support!!! If there is ever anything that I could do to repay your kindness and support, please let me know!!! and I understand that the information you sent me is only provided as guidance and not legal advise.

Once again, thank you so much.

Helena

We understand and agree with you that the Fair Debt Collections Act is quite complicated.  Even the FTC has to write legal opinions on how to interpret it.  Regarding your letter, it sounds to us like you are doing your best to stand up for your rights.  Certainly, without reviewing your case carefully with all the facts at hand, we can't make any specific recommendations to you, other than a standard warning which we think may help you in this matter:  You might want to consider the following:"Unless you comply with the Fair Debt Collections Act, I will take further action, including report any violations by your company, as noted in this letter, to the FTC."

CLC Help Center

What if the medical bill goes to collections and you are paying the collection 25.00 a month. They said they can't accept less then 75.00 a month. Do they have to rea[ort that it is at least being paid.?Or can the report past due?

In our current economy, credit card debt is like a plague that struck countless families. It can keep you from getting good rates on a car loan or home mortgage. In addition, making monthly payments to several credit card companies also adds stress to your cash flow.  As a result, no money is left in case there are unexpected emergencies.
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mikeadam
credit card debt

My sister owes me $250,000 dollars and is trying to avoid me, with the saleing her property for $850,000. I am trying to place a judgement on her before she sales her property how can i do this with also placing a credit judgement on her as well.

I sent collection agency request for validation. They responded with a letter showing itemized medical bill. Then they sent me another letter stating that I should pay the balance in full within 10 days. Now have received another letter stating that if full balance is not paid within 30 days, they will report this to credit bureaus?

I contacted the collection agency by phone and offered to pay a monthly payment untill the balance is paid in full but asked them not to report the collection to credit bureaus. They are adamant that the reporting will happen unless I pay in full within 30 days.

If I do the payments and not pay the full amount within 30 days, they will still report to credit bureaus.

What's my recourse? What do you suggest I do in this case?
Thanks and I hope I can get your feedback!!

joejohnson:

The debt validation letter you sent the agency.. was it detailed, or just asked for them to validate the debt?

If it wasn't detailed, I'd suggest sending another debt validation letter, but more detailed.  If you search debt validation ltr online, you can see several ltr suggestions as to what to ask.  In the letters I've sent out, I always ask to see the original contract agreemtn between the original creditor and I, proof showing that the agency can collect the debt, proof that they're licensed to collect, the agent's license #, etc.

I always end it where they need to respond within 30 days, or it will be deemed that the debt they're trying to collect is not valid, nor mine, and they have to no longer contact me.

Also, when you're requesting debt validation, the collection agency is NOT allowed to report your debt to the credit bureaus, as you're goingn through a validation period.  IF they do, its against the law and you can do something about it