[hannah]

Tasked with reading law blogs this week, I ran across an excellent entry on debt validation (he calls them verification) letters by lawyer, Craig Jordan. Here's a link to his entry with full text below:

Over the Top Verification Letters

I’ve recently been contacted by a few clients who believe that a debt collector has failed to properly respond to a letter either disputing a debt or requesting verification of the debt. They’ve told me about how much they’ve learned on the internet about their rights under the Fair Debt Collection Practices Act. When I talk to them, they do have a surprising amount of knowledge, certainly more than most non-specialist attorneys, about what the statute requires. Unfortunately, for all their research, the letters that they’ve sent me are so over the top that there is little prospect of them prevailing in a lawsuit against the debt collector.

The letters read like a giant game of gotcha; as if the letter-writer is trying to send the debt collector on an impossible scavenger hunt for every last piece of paper relating to the debt, hoping that the debt collector will fail or give up. My advise to these folks has been uniform: “Stop doing that.”

By attempting to game the system this way, these letter-writers have done the near impossible. They have set up a trial dynamic in which the debt collector will be more sympathetic than the debtor. Typically, there has been no harassment or anything close to wrong-doing by the debt collector. He has usually done nothing more than mail a form letter notifying the debtor that he will be collecting the debt, providing basic information about the debt that was provided to him by his client or predecessor, and giving the statutorily required notices. In response, he receives an accusatory missive, threatening him with a lawsuit for violating the law if he doesn’t fulfill a set of byzantine verification requests to the letter. I have even seen debtors who have sent the debt collector a form, informing him that his claim “will not be considered” unless the form is filled out in full.

When you are disputing a debt, you have to remember that you are not just writing to the debt collector. You are writing to a jury.

This jury will largely be made up of people who take the responsibilities seriously, otherwise, they wouldn’t have shown up for jury duty. For the most part, they will have worked hard in their lives to pay their debts, sometimes making personal sacrifices in order to make sure they keep their commitments. They are not going to be moved to help someone they perceive is twisting the law to slip free of a legitimate request to pay a debt. In fact, jury bias against people who haven’t paid their debts is a real problem in cases where the debt collector has really done something wrong.

The same is true of judges, who are the gate-keepers to the jury. While a disciplined judge will follow the law even when his personal feelings weigh against the party for whom he is ruling, that’s still an uphill sell, and not all judges are disciplined in their application of the law. There are plenty of judges out there who decide who should win and then figure out a legal way to justify that result.

What does this mean for verification letter writers? It means you have to write from the point of view of someone who has a legitimate concern and who wants information to satisfy that concern. Your letter should present your concern and suggest the easiest, most direct way of dealing with it. Here is an example of what I consider to be a good, initial verification request for a debt that you don’t have any reason to dispute:

Dear Mr. Debt Collector:

I received your notice that you will be collecting this credit card account from me. I need some information from you:

I need to know that you are really the person I should be dealing with on this debt. I don’t want to make a payment to you and then find out that I should have paid someone else. Please provide me with documentation that you either own this debt or have authority to collect it, so that I will know that if I make a payment to you, the payment will be going to the proper person.

I also need to know how you calculated the balance you say is due. When I last heard from someone about this debt, the balance was substantially lower. If you have added interest or fees to the debt, please provide me with an itemized breadown of what you’ve added and documentation showing that you are following the terms of my contract. I don’t want to have to pay more than I really owe.

Thank you for your help with this matter.

Sincerely,

David Debtor

This letter accomplishes the basic goals of a verification request. If the debt collector responds, you will have additional useful information about the debt that may come in handy in negotiating the amount of the debt or disputing it if it is incorrect. If the debt collector doesn’t respond but continues to attempt to collect the debt, he will have violated the FDCPA and you will have a sympathetic case to make to the jury that the debt collector was illegally refusing to comply with a request so reasonable that anyone would understand it.

This letter is not a one-size fits all letter. If the debt is not correct, the dispute letter needs to specifically point that out. There is an example of how to do that in my guide to disputing a debt. Depending on the circumstances, there may be other types of information that are reasonable to request, for example, if the debt is old and the debt collector has threatened to refer you for legal action, it would be reasonable to request documentation showing how long it has been since you defaulted on the debt, so you can determine whether the debt is beyond the statute of limitations.

Whatever the situation, and whatever kind of letter you write to a debt collector, or to a creditor or credit bureau for that matter, remember that you are also writing to a jury. If it helps, imagine that you are writing to your mother. Your letter should make her want to help you, not toss you out on your ear.
2.2.2007

This is the letter he recommends for disputing a debt:

Example Letter to Debt Collector Disputing a Debt

Use this letter when you have an honest dispute over the debt. Be sure to include an explanation of the dispute.

Advising the debt collector in writing that you dispute the debt will require the debt collector to report to any credit reporting agency that the debt is disputed. In some credit scoring systems, disputed debts do not hurt your score as much as undisputed debts. Remember to be honest and polite. Don't make up a phony dispute. If you have to sue, you will be made to look like a liar in front of the jury and your case will go right down the drain.

May 4, 2002
Via Certified Mail, No. 8978 3245 3999 3876 2329

Debt Collector
Address
City, State Zip

Re: Sears Credit Card Account No. 9898989, Your Account No. 43098

I am writing to dispute the amount you claim is due on this account. You are trying to collect $250.34 from me that I have already paid. The actual balance on this account is zero, as I paid off the account in a timely fashion and requested that it be closed in October of 1999.

I have enclosed a copy of my statements from October and November of 1999, the letter requesting that my account be closed, and the letter from Sears confirming the closing of my account. The October 1999 statement shows a balance due of $250.34. The November 1999 statement shows that a payment in that amount was received on October 22, 1999 and shows a balance of zero. My letter requesting that the account be closed is dated October 15, 1999. The letter from Sears confirms that the account was closed at my request on November 21, 1999 with a zero balance.

I am requesting that you correct your records to indicate that I do not owe anything on this account. If you are collecting this account on behalf of someone else, I am asking that you provide them with a copy of this letter.

Sincerely

Jane Q. Consumer

And here is his guide to disputing a debt:

Warybuyer Guide to Disputing a Debt

You can achieve two important things by disputing a debt with a debt collector. First, if you dispute the debt within the first 30 days after the debt collector contacts you, you can stop the debt collector from continuing to try to collect the debt until he can verify that you actually owe the money. Second, you can force the debt collector to disclose to any credit reporting agency he reports to that your debt is disputed. This is valuable because many credit scoring models disregard or discount disputed debts.
Debt Collectors: The First 30 Days

The best time to dispute a debt is during the first 30 days after you receive first letter from the debt collector. This period is known as the verification period. During this period, you do not have to have a valid dispute to challenge the debt. It is permissible for you to merely ask the debt collector to verify that you actually owe the debt. This can be a powerful request, because it essentially puts the burden of proof on the debt collector. Until the debt collector can produce verification of the debt, he can take no further action to collect from you.

Of course, if you have a bona fide dispute over the debt, be sure to assert it in your verification request. Merely requesting verification does not require the debt collector to report the debt as disputed to a credit reporting agency. My sample Letter Requesting Verification of Debt shows you how to make the verification request, both with and without a dispute.
Debt Collectors: Any Time

Even if you miss the first 30 day period, it still is a good idea to dispute a debt if you can. You can still force the debt collector to report your debt as disputed. Do not make up a frivolous dispute, because you will undermine any future lawsuit you may file if you do. My sample Letter to Debt Collector Disputing a Debt shows how to dispute a debt with a debt collector.

If you are a Texas resident, you have additional dispute rights that are not available under the federal Act. You may dispute a debt at any time by giving the debt collector written notice of your dispute. Upon receipt of the notice, the debt collector must stop all collection efforts until it investigates to determine the actual amount of the debt, if any.

No later than 30 days after the debt collector receives your dispute, it must respond in writing either denying the inaccuracy, admitting the inaccuracy, or requesting more time for the investigation. If it admits the inaccuracy, it must update its records and send a notice of inaccuracy and a copy of the corrected information to each person to whom it gave a report of the inaccurate information. If it requests more time, it must correct its records in accordance with your request and give notice of the correction to each person to whom it reported the disputed information. The debt collector may resume collection efforts only after its investigation is completed and it has determined the information to be accurate.

Note: Although the Texas law allows you to stop collection efforts with a dispute at any time, it does require you to actually dispute the debt. You cannot simply request verification of the debt as you can under federal law. Be careful to make only good faith disputes, otherwise you will lose credibility and have a very difficult time enforcing your rights in court if you have to later.
Disputing Debts with Creditors

Federal debt collection law doesn't apply to creditors, so you don't have the same rights when you dispute debts with them. However, you do have dispute rights under other federal and state laws with certain kinds of creditors.

For credit card companies, see my "Warybuyer Guide to Credit Card Errors and Chargebacks" for more information about disputing billing errors and other improper charges.

For all creditors, Texas law prohibits representing that a person is willfully refusing to pay a debt when the person has disputed the debt in writing. While the Texas law does not specifically address credit reporting the way the federal law does, as a practical matter, a creditor who reports to a credit reporting agency that you have failed to pay a debt after you have disputed the debt is almost always going to be in violation of this law. The Texas law is also broader than the federal law. It prohibits making this representation to anyone, not just a credit reporting agency. Accordingly, a creditor who sells a debt to a third party while wrongfully representing that you are refusing to pay may violate this law.

Unfortunately, there are unresolved legal issues involving the relationship of the federal Fair Credit Reporting Act and the Texas Debt Collection Act that make it hard to hold a creditor responsible for violating this law in its reports to credit reporting agencies, but it is still worth sending the dispute letter, as a creditor may comply to avoid the possibility that federal law will be interpreted to permit the enforcement of this state law requirement, and the letter will prevent the creditor from misrepresenting your debt to third parties other than credit reporting agencies.

Pretty good down to earth advice in my estimation. Remember that this is a TEXAS lawyer so he references TEXAS Law.

Here's a link to his blog.

Thank you Craig Jordan!