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Ich. Did we get something in return out of that act or was it a coup? Do they have any legal obligation to get this stuff right?

I have intimate personal experience with the FCRA. Sadly I don't have an hour to talk about it at the moment, but ping me any time. Short version: it's one of the most absurdly customer-friendly pieces of legislation in the US, assuming you know how to work it. There exist Internet communities where they basically do nothing but assist each other with using the FCRA to get legitimate debts removed from their credit report, which, when combined with the Fair Debt Collection Practices Act, means you can essentially unilaterally absolve yourself of many debts if the party currently owning it is not on the ball for compliance.

The brief version, with the exact search queries you'll want bracketed: you send a [debt validation letter] under the FCRA to the CRAs. This starts a 30 day clock, during which time they have to get to the reporter and receive evidence from the reporter that you actually own the debt. If that clock expires, the CRAs must remove that tradeline from your report and never reinstate it. Roughly simultaneously with that letter, you send the collection agency a [FDCPA dispute letter], and allege specifically that you have "No recollection of the particulars of the debt" (this stops short of saying "It isn't mine"), request documentation of it, and -- this is the magic part -- remind them that the FDCPA means they have to stop collection activities until they've produced docs for you. Collection activities include responding to inquiries from the CRAs. If the CRA comes back to you with a "We validated the debt with the reporter." prior to you hearing from the reporter directly, you've got documentary evidence of a per-se violation of the FDCPA, which you can use to get the debt discharged and statutory damages (if you sue) or just threaten to do that in return for the reporter agreeing to tell the CRA to delete the tradeline.

No response from the CRA? You watch your mail box like a hawk for the next 30 days. Odds are, you'll get nothing back from the reporter in that timeframe, because most debt collection agencies are poorly organized and can't find the original documentation for the debt in their files quickly enough. Many simply won't have original documentation -- they just have a CSV file from the original lender listing people and amounts.

If you get nothing back from the reporter in 30 days, game over, you win. The CRA is now legally required to delete the tradeline and never put it back. Sometimes you have to send a few pieces of mail to get this to stick. You will probably follow-up on this with a second letter to the reporter, asserting the FDCPA right to not receive any communication from them which is inconvenient, and you'll tell them that all communication is inconvenient. (This letter is sometimes referred to as a [FOAD letter], for eff-off-and-die.) The reporter's only possible choices at that point are to abandon collection attempts entirely or sue you. If they sue you prior to sending validation, that was a very bad move, because that is a per-se FDCPA violation and means your debt will be voided. (That assumes you owe it in the first place. Lots of the people doing these mechanics actually did owe the debt at one point, but are betting that it can't be conveniently demonstrated that they owe the debt.)

If the reporter sends a letter: "Uh, we have you in a CSV file." you wait patiently until day 31 then say "You've failed to produce documentary evidence of this debt under the FDCPA. Accordingly, you're barred from attempting to collect on it. If you dispute that this is how the FDCPA works, meet me in any court of competent jurisdiction because I have the certified mail return receipt from the letter I sent you and every judge in the United States can count to 30." and then you file that with the CRA alleging "This debt on my credit report is invalid." The CRA will get in touch with the debt collection company, have their attempt timeout, and nuke the trade line. You now still technically speaking owe money but you owe it to someone who can't collect on the debt, (licitly [+]) sell it, or report it against your credit.

I just outlined the semi-abusive use of those two laws, but the perfectly legitimate use (for resolving situations like mine, where my credit report was alleging that I owed $X00,000 in debts dating to before I was born) is structurally similar. My dropbox still has 30 PDFs for letters I sent to the 3 CRAs, several banks, and a few debt collection companies disputing the information on my report and taking polite professional notice that there was an easy way out of this predicament for them but that if they weren't willing to play ball on that I was well aware of the mechanics of the hard way.

[+] Owing more to disorganization and incompetence than malice, many debt collection companies will in fact sell debts which they're not longer legally entitled to. This happened to me twice. I sent out two "intent to sue" letters and they fixed the problem within a week.

[Edit: I last did this in 2006 and my recollection on some of the steps I took was faulty, so I've corrected them above and made it a little more flow-charty.]

Wow. Having tried to resolve in a friendly manner a bill in which Verizon charged me $150 for DSL service at an address to which they not only never provided service but at which they eventually noticed they can't provide service, period, due to its distance from their nearest central office -- and having had them respond by sending the bill to a collection agency -- this information will be of great use to me, and I thank you very kindly for it.

Absurdly interesting comment for those of us who aren't lawyers with this specialty. Thanks.

Please have a beer on me sometime. Bitcoin address?

I appreciate the sentiment. As an alternative, consider donating one beer extra on your next charitable donation and think of me when you do it. That accomplishes your objective and has a higher utility to me than either beer (which I don't drink) or bitcoin (which I would need to drink rather a lot to start using -- for my reasoning on this, see hnsearch for [patio11 bitcoin]).

Not saying that Patrick endorses this but just in case you need any inspiration I'm just going to leave this here...


I put in a $100 this morning, let's get little baby Mathayo's head fixed :)

In case you are not being sarcastic on purpose: Patrick despises crypto currencies and very probably has no *coin address.

You could always buy bingo card creator.

This is one of the times I wish HN had a "saved comments" feature.

Fascinating. Is there any equivalent process for the UK, or any good resources on it?

Ditto! I wonder is there any EU law on this...

Very informative post - even if you don't live in the states, you can learn a thing or two from this one.

Thank you for your time.

An epic comment from patio11, Well done.

I happen to know that in America there are collections agencies which peak at bulk debt purchases then contact the debtor trying to illegally collect a debt they don't own.

Eventually the bulk debt package gets sold and a rightful collections agency calls them up trying to legally collect a debt.

Overall it is a very sleazy business.

Interesting... Do you have links for the aforementioned internet communities?

creditboards.com is the one I had in mind when I wrote that particular bit. I also liked the Motley Fool Credit Cards and Consumer Debts board back in the day. Sentiment on that board is that people should pay their debts, which is closer to my personal feeling than creditboards' prevailing sentiment that getting advantage on a debt collector or creditor is always justified and praiseworthy.

I already wrote a longer response but think your sentiment also deserves a shorter one: The trade for the FCRA over state defamation suits is actually a net win for consumers.

To win a defamation suit, you have to prove (generally) a) you factually don't owe the debt and b) the CRA should have been aware that you factually don't own the debt. Those can be fairly difficult to demonstrate. (Quick, demonstrate that you don't owe $30,000 to Bank of America under account number #123456. Note you may be responding to a sworn deposition from a Bank of America representative which says "I have reviewed our firm's records, kept in the ordinary course of business, and they show that he does, indeed, owe us $30,000 on account #123456.")

To win a FCRA suit, all you need is a return receipt from a letter you sent and then observe "No return receipt for the letter they sent in response dated within 30 days? Then presumption is they didn't send one. Unless they can immediately produce documentary evidence to the contrary, they're facially non-compliant, and I win automatically. We never reach the question of whether I actually owe the debt at issue. It's irrelevant."

Not a lawyer, but I think they are also required to have a process for disputing inaccuracies. Also, there is the free annual credit report law.

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