[PDXBLAZERFAN]

The following is from Oregon Administrative Rules.

"Return of Accounts" is OregonSpeak for "Validation (?)


Collection Activities
441-810-0070

Return of Accounts

(1) Immediately upon receipt of a certified mail request from the client, a collection agency business shall cease all collection attempts, unless a written contract requires otherwise (nice loophole).

(2) A collection agency business shall return all accounts to the client within 20 days from the receipt of the certified mail request from the client. Return of accounts shall include an itemized status report for the accounts being closed, showing name, amount assigned, payments collected, and amount still owing.

(3) If a client requests the return of accounts and there are no stipulations otherwise in a written contract, the collection agency must return all documents given it relating to the accounts; however, the collection agency's own work papers, contact sheets, etc., are the sole property of the collection agency, and need not be sent to the client.


After reading these rules, I fired off a letter to State of Oregon Consumer Protection Services (part of DOJ). Perhaps, I should have posted first, then send. Live and Learn.

Consumer Protection Services:

I am writing with regard to OAR 441-810-0070 (1). The administrative rule defines the process, a debtor or person being contacted about a debt, must follow to request “return of account” or validation. This process requires a person to send the request certified mail while the collection agency is not required to send any request certified mail.

It is my understanding collection agencies are required in an initial communication about a debt, to notify consumer of their rights including the right to dispute and request validation. In addition, if the consumer doesn’t dispute within 30 days; this right is lost.

The initial communication is vital to the consumer preserving their good name and credit rating which directly affects our economy. This communication can be overlooked or simply discarded as “junk mail”. By requiring certified mail for the initial communication, Oregonians would be protected from this gap in the rules and the financial industry would have a more accurate representation of Oregonians as potential customers.

Collection agencies use credit reporting to enforce their claims. Oregonians are being unfairly hindered economically by these industry practices. I suggest we protect our economy (and court system) from this burden.

I have heard the state of New York is set to require specific licensing information about debt buyers and debt collectors, as well as complete affidavits detailing a consumer's debt before default judgments will be approved by Civil Court clerks.

The current rule requirement is a barrier to Oregonian consumers. The consumer’s request is an effort to determine if the debt is their responsibility and if they are paying the correct party. Ultimately, a consumer would be motivated to have some proof of communication for their own protection. The collection agency does not have the same motivation or requirement but has the ability to unilaterally inflict damage through credit reporting. In addition, collection agencies are always in the top 10 of complaints and there are unscrupulous collection agencies. In the worst case scenario, collection agencies could be motivated to not send the initial communication letter and deprive consumers of their rights.

The certified mail requirement is misplaced in the process; the collection agency ought to be required to use certified mail. The result will be debts are validated on the front-end of collection instead of after an Oregonian’s credit is damaged and opportunities are lost.

Thank you for your time and consideration. I look forward to your reply.

Your comments, please.

[hannah]

Validation is not what is meant by return of accounts. This is what is required to be between the creditor and a third party collection agency to collect on the creditor's acccounts not between a debtor and a collection agency.

[spinn]

They are (probably) violating the law by continuing collection without validating.

Why not point that out?

its easier than changing existing law..........

[PDXBLAZERFAN]

misinterpreted rule; sent follow-up message to disregard references about consumers being required to use certified mail.

And stated, a certified mail requirement for the initial communication by collection agencies is still needed.....

IMHO

[PDXBLAZERFAN]

oh yeah, i feel like an idiot.

FYI, i hired an attorney for my situation.

Props to Hannah for diligent research and helpful input.

[hannah]

Originally Posted by PDXBLAZERFAN

oh yeah, i feel like an idiot.

FYI, i hired an attorney for my situation.

Props to Hannah for diligent research and helpful input.

No problem. When I first started all this years ago I misinterpreted a lot of things. Statutory language and legalese is not easy to understand. You learn by asking questions and there aren't any stupid questions.

One more thing, if this is about the debt you have already been sued for, it is probably a waste of time, effort, and money to send a validation letter. Just ask for what you need to verify the debt in discovery.

[PDXBLAZERFAN]

The idea for this letter kind of sprang from Hannah's post about New York state requiring more documents (proof of license and affidivat) before granting a default judgment.

While on my state's AG site, there was a link to the state's Administrative Rules regarding collection agencies.

When I read the certified mail provision, I thought it was required of consumers. In fact, the rule referred to Creditors.

The letter was to voice my ideas in an effort to protect Oregon consumers.

Nothing to do with my other posts/case.

Think the state would ever require CA to use certified mail for the all important initial communication. Congress? Has this been proposed? Any debate record?

[centex]

Originally Posted by PDXBLAZERFAN

Think the state would ever require CA to use certified mail for the all important initial communication. Congress? Has this been proposed? Any debate record?

I cannot see it happening unless the courts were expanded to accept the inevitable influx of filings that would follow. If you start making the initial costs of collecting on defaulted debt higher, you can bet that you would see many more cases being filed early in the process. And, my guess would be that even if such a requirement were to result in fewer third-party purchasers, that backlash would be seen very quickly in more OC's moving to file even before an account reached the charge-off stage.

Beware what you wish for...

[Hedwig]

Exactly what I was thinking. Costs of the collection would be higher, so the CA and JDB wouldn't want to pay as much. Which leaves it with the OC longer--where the FDCPA doesn't apply. And, they probably would file early, to try to get something back, since they wouldn't make anything selling it.

The law of unintended consequences.

[PDXBLAZERFAN]

even though i'm a novice.... here goes my thinking.....

1) Credit reporting basically assignes a citizen consumer second-class financial status.

2) In our culture money equals free speech; freedom.

3) The initial communication is vital to a consumer.

4) With the power to assign a 7-year sentence of second-class status; a "check"/procedure to balance this power is necessary.

5) The proposed requirement is minimal due process considering the ramifications of an error.

[centex]

Originally Posted by PDXBLAZERFAN

even though i'm a novice.... here goes my thinking.....

1) Credit reporting basically assignes a citizen consumer second-class financial status.

2) In our culture money equals free speech; freedom.

3) The initial communication is vital to a consumer.

4) With the power to assign a 7-year sentence of second-class status; a "check"/procedure to balance this power is necessary.

5) The proposed requirement is minimal due process considering the ramifications of an error.

Your premise overlooks the fact that a significant majority of people will never default on their debt, and even those with an occasional late payment are not so late as to have an adverse reporting that occurs. The legislation that you seek would only impact a small segment of the population, hence it is not a priority for those in office (ie. those responding to the large sums of money).

Credit reporting is not something that impacts only those in debt via default...some of us MAKE money by having good credit that is reported.

AGain, it comes back to an issue of beware the laws of unintended consequences...not that it would hurt my feelings to see more OC's move to litigate while defaults were still fresh.

[spinn]

Why cant the courts simply take 11 seconds to make sure documentation from the original creditor is provided before granting a default judgment?

I know....dumb question....

[Enigma]

Originally Posted by spinn

Why cant the courts simply take 11 seconds to make sure documentation from the original creditor is provided before granting a default judgment?

I know....dumb question....

One of the penalties for not appearing at the Pre-Trial is a default judgment.

If a defendant does not care enough to even make appearance to defend him/herself, why should a judge do his/her (defendant) for them?

[spinn]

Out of every 100 defendants in such cases........how many are actually, truly served?

I doubt it is more than 60. That leaves forty who really had no idea.

It really seems to be about ego, the law is barely relevant.

[Enigma]

Originally Posted by spinn

Out of every 100 defendants in such cases........how many are actually, truly served?

I doubt it is more than 60. That leaves forty who really had no idea.

It really seems to be about ego, the law is barely relevant.

Forty-percent sewer service, that number is way too high.

Speaking for my jurisdiction, there really is no need for sewer service. The rules say that you file, the Sheriff or a process server attempt service for XX number of days, after that you publish it in the paper for three alternating days, then you are considered served.

How is the law barley relevant?

[centex]

very rarely do we see substituted service in this area. Further, when I have looked at other cases, I rarely see motions for substituted service. The reality is that a number of the defaults are not the result of "sewer service" but rather by people that simply don't bother to pull the head out of the sand where it often resided following the default. And if there is no Answer filed by a defendant, then the only question that remains is whether the Original Petition contained the docume