Free Credit Report Dispute Letter
2010
If debt collectors fail to respond within 30 days, is the debt invalid and the debtor free of supposed debt?
I read this on “About.com”
After receiving your dispute, the collection agency must send you proof that it owns or has been assigned the debt by the original creditor. Verification that you owe the debt and the amount of the debt needs to include documentation from original creditor (however, it is the debt collector who sends it to you). It is not enough for the collection agency to simply send you a printout of the amount owed.
If the debt collector “does not verify the debt within 30 days”, it is not allowed to continue collecting the debt from you nor can it list the debt on your credit report. Should the debt collector list the debt on your credit report, you can dispute the debt with the credit bureau. Sending the credit bureau a copy of your debt validation letter along with the certified and return receipts will help get the account removed from your credit report.
This article is really taking two different scenarios and mixing them together, so we really need to clarify the issues here.
First, you have the Fair Credit Reporting Act, or FCRA. This is the federal law that governs the actions of the credit bureaus and those who furnish data to the bureaus. Per the FCRA, you have the right to dispute any listing on your credit report. When you dispute a listing, the credit bureaus will contact the creditor and verify that the information is correct. If the creditor does not verify the listing within that 30 day time frame, then it is automatically deleted as mandated by the FCRA. This does not make the debt invalid, but it will get it removed from your credit report. While it’s true that it can be re-inserted, the FCRA stipulates that you must be notified in writing within 5 days of such action taking place.
Secondly, you have the Fair Debt Collection Practice Act, or FDCPA. This is the federal law which regulates the actions of the debt collection industry. One of the rules of the FDCPA is that any consumer has the right to demand validation of an alleged debt. If such demand is made within 30 days of the debt collector’s initial contact, then the collector cannot make any FURTHER collection attempts until the debt has been properly validated. The courts have upheld that reporting to the credit bureaus and verifying disputes constitute “collection activity”. Now there is no timeframe for the debt collector to respond to the demand, and in fact they don’t have to respond at all, but as long as your demand was timely, they must cease collection activity until validation is provided.
Now as to what qualifies as proper validation. Unfortunately the FDCPA does not address this, but the Wollman Letter and Chaundry case specify that validation must come from the original creditor to who the debt was owed. Most courts hold that proper validation requires at least a complete breakdown of the amount owed and some kind of proof that the debt is actually owed by the defendant.
Both the FCRA and FDCPA carry civil liabilities for anyone who violates the respective law. The FCRA carries a liability of $1000 per violation, plus actual damages and legal fees. The FDCPA carries the same liabilities except it is limited to $1000 per action (ie, per lawsuit).
Hope that explains it a little better for you. There are some links in my profile that explain the process a little further.
Money Management : How to Dispute a Credit Card Charge
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