Assignment of debt illegal?

[dystopia]

I've read that assignment of evidence of credit card debt by a OC to a DC for the sole purpose of collection is considered fraud.

I've also read that it prevents the OC from filing suit later if proved.

Does anyone have a source for this? Does it vary by state?

[dystopia]

I think I understand the concept:

The OC assigns my debt to the debt collector, transfering the contract unilaterally without my knowledge or permission and repudiates the debt thereby losing standing to sue me later.

Collector has no standing to sue because we have no prior course of dealing.
Any validation they send only proves that I owe money to the OC (that is I did until they repudiated the debt)

OC now loses right to sue me, now nobody can sue me!

Then there is my scenario:

The DC poses as an attorney for the OC.

I think my main strategy would be to show that the DC is not the OC's attorney but in fact an independant DC who has bought evidence of debt for the fraudulent purpose of depriving me of money and property. I object to any facts entered into evidence by the attorney and preserve my objections for the record if not sustained.

Once I prove this it's back to no prior course of dealing. failure to state a claim upon which relief can be granted.

No?

[trooper2ls]

It is all a game of numbers. They are betting you have been conditioned as a good little sheeple in those government run schools and will roll over when they say to.

I wrote a piece of software once for a defunct company called "RecoverDebt.com" ... a large healthcare provider assigned 45M of 2-5 year deliquent accounts to the system because their internal collections department just wasn't having good success with accounts older than 2 years and it was farmed out to the famed NCO.

Within 2 months NCO had collected over 16M of that paper and the OC (Healthsouth) about flipped out and pulled the rest of the accounts from the system and started doing in-house collections again because they thought were giving away too much free money... a few months later they put them back in the system.

Bottom line is that NCO uses illegal methods to collect and the OC didn't .. hence the difference in success. The OC didn't want the liability so they just paid the commissions and kept turning over the accounts to the debt gestapo folks at NCO.

BTW.. I didn't endorse the business.. I was just paid $200/hr to write their software based on their specs.. the heyday of developement back in the late '90's. Times have changed.

..J

[farmer_giles_of_ham]

what stops a creditor from selling their position to another who will gain the original right to collect?

[dystopia]

Originally Posted by farmer_giles_of_ham

what stops a creditor from selling their position to another who will gain the original right to collect?

What I'm led to believe through reading Cornforth, etc. is that the account cannot be transfered to any other party without the debtors permission, there is no "meeting of the minds". I never agreed to any contract with this attorney so he has no right to say I damaged him. If he voluntarily damages himself without my knowledge that's his problem. Furthermore, the attorney does not provide the same services as the OC did or any service to me whatsoever so it is not an equitable arrangement.

That's why he commits fraud and says he is their lawyer, that's the only way he could possibly have standing.

That's why I believe the other day I received a check for 7.00 from another collection agency representing another account that I'm delinquent on. I took a look at the check and in the memo section was the old credit card number, I knew not to deposit the check but I couldn't figure out why they would do this.

Just tonight sitting in a restaurant it dawned on me what they were trying to do. They were trying to get me to contract with them - to agree to NOVATION.

In other words for me to establish a course of dealing with them and give my consent to transfer the account to them. If I deposit that check with that account number on it, I'm agreeing to pay the balance of that account that they now hold.

However the only way it works is if I deposit that check or make a payment on the account while they control it. Then I have contracted with them.

There's just no other explanation, they thought I was dumb enough to deposit their stupid $7.00 check.

EDIT: Actually I went and got the check, it is from the OC.

The only reason I can think that they would do this is:

A. They've sold the paper to someone else (they have) and they were unsuccessful in collecting from me so now they want to get their rights to collect back
B. ?

[dystopia]

Originally Posted by trooper2ls

It is all a game of numbers. They are betting you have been conditioned as a good little sheeple in those government run schools and will roll over when they say to.

..J

That's what just dawned on me, THEY'VE GOT NOTHING!

Absolutely no leg to stand on if this is true, I'm just not entirely certain yet.,

[gldskr]

Originally Posted by dystopia

I've read that assignment of evidence of credit card debt by a OC to a DC for the sole purpose of collection is considered fraud.
Not necessarily, as long as the rights of collection are included with the assignment. In order for a DC to act upon a term in a contract, it first must have the authority to do so.

I've also read that it prevents the OC from filing suit later if proved.
Unless the OC has assigned the entire contract, with all documentation, it still retains the standing to sue.

Does anyone have a source for this? Does it vary by state?

Originally Posted by dystopia

think I understand the concept:

The OC assigns my debt to the debt collector, transfering the contract unilaterally without my knowledge or permission and repudiates the debt thereby losing standing to sue me later.
Doubtful. This is a more likely scenario. The CCC issues credit, which is accounted for in pooled accounts of varying rates of interest. These pooled accounts are then sold as bonds on the open market. The CCC's keep the spread as profit. It is, of course, a shell game, as the backing for both the bonds and the initial credit are one and the same, the promise of the alleged debtor. So in this scenario the bondholders are the true creditors and the OC has been reduced to a mere DC. One would think that there would be terms in the bondholder agreement preventing the OC from assigning their contracts so as to preserve their collateral, whereas they would have recourse against the OC rather than a fly by night DC. The OC never repudiates the debt, however write offs are common. It never loses its standing as the bondholders won't allow it.

Collector has no standing to sue because we have no prior course of dealing.
More importantly, because they do not have title to the alleged debt.
Any validation they send only proves that I owe money to the OC (that is I did until they repudiated the debt)Did you contract to borrow money or did you contract for credit? If it is the former then you owe, if it is the latter the contract is breached and the credit ceases. The CCC makes up the difference in accounting through a write off. Presumably they issue a 1099C, this never happens however because the write off is from a pooled account, not from an individual account.

OC now loses right to sue me, now nobody can sue me!
The OC still can and if need be the bondholders as well.

Then there is my scenario:

The DC poses as an attorney for the OC.

I think my main strategy would be to show that the DC is not the OC's attorney but in fact an independant DC who has bought evidence of debt for the fraudulent purpose of depriving me of money and property. I object to any facts entered into evidence by the attorney and preserve my objections for the record if not sustained.

Once I prove this it's back to no prior course of dealing. failure to state a claim upon which relief can be granted.
The easiest way to prove the nonexistence of an alleged debt is the nonexistence of the 1099C from the OC or the IRS. Federal law requires a write off after 180 days, this is what shows up on your credit report. Without the 1099C though this is fraudulent reporting, but this is the norm.

No?

Originally Posted by farmer

what stops a creditor from selling their position to another who will gain the original right to collect?
The terms of the bondholder agreement. The assignability of the cardmember agreement is explicit and is a nonfactor.

Originally Posted by dystopia

EDIT: Actually I went and got the check, it is from the OC.

The only reason I can think that they would do this is:

A. They've sold the paper to someone else (they have) and they were unsuccessful in collecting from me so now they want to get their rights to collect back No
B. Chances are you've received this check after the 180 write off has occured. By cashing the check on a supposedly closed account you admit that the account is yours, where they can now issue a 1099C that accrues to you. This is a VOD with teeth while also incurring the wrath of the IRS. Pure trickery.

gldskr
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[theghost]

Originally Posted by gldskr

gldskr
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gldskr, from reading your post, two questions arise. For years I have handled bogus presentments from DC's with a simple Refusal for Cause response, with about 10 points/reasons for refusal. This has always worked just fine, resulting in the DC disappearing, and never hearing from them again. Although, this has not stopped them (DC) from selling/assigning the bogus claim to another DC. So, this is my first question,

1) Is there a way you can think of, to prevent the DC from re-selling/re-assigning after they have either failed to validate, or been sent packing via a R4C letter?

and 2) would the lack of a 1099C accompanying their presentment be a valid point for refusal to add to my ever growing list of refusal points? Or, could you explain a little more clearly how one would address the 1099c issue?

Thanks

[Shoonra]

Subrogation of a debt is now considered standard and acceptable business practice. If you owe the original creditor money, he has the right to recoup as much as possible as quickly as possible by selling your debt (often at a substantial discount) to a secondary creditor who's willing to wait or go to special efforts to collect on it.

I would suggest not quibbling about this arrangement if you're not prepared to pay the debt in full and immediately.

[theghost]

Originally Posted by Shoonra

Subrogation of a debt is now considered standard and acceptable business practice. If you owe the original creditor money, he has the right to recoup as much as possible as quickly as possible by selling your debt (often at a substantial discount) to a secondary creditor who's willing to wait or go to special efforts to collect on it.

I would suggest not quibbling about this arrangement if you're not prepared to pay the debt in full and immediately.

You would, no surprise there. To hell with the fact that this new stranger on the scene (DC) has no title to the claim, nor a contract with you, the alleged debtor. "Pay no attention to the man behind the curtain".