Legal Research Help Needed!!!

I went to the law library today to reasearch the proper way to verify a debt under the FCRA and FDCPA. Well, strangely enough, Congress never defined *verification* or explained how a debt should be verified!!!! I am floored because verification is clearly defined in other situations (i.e. verification of a complaint; verification of a warrant in a criminal case, verification of a mechanics lien, verification of public assistance eligibility in state court, etc.). This is how the CRAs are getting away with these bogus letters and this is how the debt collectors are helping the creditors rob us!

I plan to go back to the law library on Monday to research Congress' intent for verification under the FDCPA and the FCRA. This, along, with the basic definition of *verification.* In the meantime, could someone with access to Lexis/Nexis or Westlaw help me out with this search? Perhaps I'm missing something here . . . I'm looking for Federal case law either from the US Supreme Court or from the 2nd Circuit that explains what verification is and how to verify a debt or claim in a FCRA or FDCPA case . . . . .

Cute Chick,

I have looked a little into the caselaw definition of verification per FDCPA, and unfortunately it looks like it works more against us than for us. However, if I remember correctly, the Supreme Court has not decided it (or have decided by refusing to hear it), and the issue has not reached various circuit courts either. The few that have decided the issue have ruled not in our favor. Due to this, I think the primary issue should not be geared towards deciding what verification means, but what is deemed admissible evidence to prove the verification. Find caselaw concerning evidence as inadmissible that is identical or very similar to what the CCC will say is verification of the debt, i.e. unsigned photocopies of billing statements. The problem is that some debt collectors can get signed affidavits from the alleged proper person who works in the CCC billing department and can attest that these redcords are kept properly, blah, blah, blah. Here would be the proper time to insert the applicable statute that evidence cannot be purchased (some debt collectors do pay $$$ to receive those billing staements, affidavits, etc.). If the attorney is a first party for the CCC, this will be tough if not impossible to prove. Keep in mind that some battles are not worth fighting. Settlement may be appropriate. I plan to settle mine soon. I'd love to assist, but I just do not have the time right now. Good luck.

-squirrels

[vanton57]

Rather than Verify you want to Validate. FTC has ruled on this issue.

I have a letter that has been used by a few with some success against Wolpoff and gangsters.........

The file is too large to attach or to do a cut and paste in the body here. If you would like the file, feel free to email me...........

UNITED STATES OF AMERICA
FEDERAL TRADE COMMISSION
WASHINGTON, D.C.20580

Federal Trade Commission

December 23, 1997

Robert G. Cass
Compliance Counsel
Commercial Financial Services, Inc.
2448 E. 81st Street, Suite 5500
Tulsa, OK 74137-4248

Dear Mr. Cass:

Mr. Medine has asked me to reply to your letter of October 28, 1997, concerning the circumstances under which a debt collector may report a "charged-off debt" to a consumer reporting agency under the enclosed Fair Debt Collection Practices Act. In that letter, you pose four questions, which I set out below with our answers.

I. "Is it permissible under the FDCPA for a debt collector to report charged-off debts to a consumer reporting agency during the term of the 30-day validation period detailed in Section 1692g?" Yes. As stated in the Commission's Staff Commentary on the FDCPA (copy enclosed), a debt collector may accurately report a debt to a consumer reporting agency within the thirty day validation period (p. 50103). We do not regard the action of reporting a debt to a consumer reporting agency as inconsistent with the consumer's dispute or verification rights under § 1692g.

II. "Is it permissible under the FDCPA for a debt collector to report, or continue to report, a consumer's charged-off debt to a consumer reporting agency after the debt collector has received, but not responded to, a consumer's written dispute during the 30-day validation period detailed in § 1692g?" As you know, Section 1692g(b) requires the debt collector to cease collection of the debt at issue if a written dispute is received within the 30-day validation period until verification is obtained. Because we believe that reporting a charged-off debt to a consumer reporting agency, particularly at this stage of the collection process, constitutes "collection activity" on the part of the collector, our answer to your question is No. Although the FDCPA is unclear on this point, we believe the reality is that debt collectors use the reporting mechanism as a tool to persuade consumers to pay, just like dunning letters and telephone calls. Of course, if a dispute is received after a debt has been reported to a consumer reporting agency, the debt collector is obligated by Section 1692e(8) to inform the consumer reporting agency of the dispute.

III. "Is it permissible under the FDCPA to cease collection of a debt rather than respond to a written dispute from a consumer received during the 30-day validation period?" Yes. There is nothing in the FDCPA that requires a debt collector to continue collecting a debt after a written dispute is received. Further, there is nothing in the FDCPA that requires a response to a written dispute if the debt collector chooses to abandon its collection effort with respect to the debt at issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1032 (6th Cir. 1992).

IV. "Would the following action by a debt collector constitute continued collection activity under § 1692g(b): reporting a charged-off consumer debt to a consumer reporting agency as disputed in accordance with § 1692e(8), when the debt collector became aware of the dispute when the consumer sent a written dispute to the debt collector during the 30-day validation period, and no verification of the debt has been provided by the debt collector?" Yes. As stated in our answer to Question II, we view reporting to a consumer reporting agency as a collection activity prohibited by § 1692g(b) after a written dispute is received and no verification has been provided. Again, however, a debt collector must report a dispute received after a debt has been reported under § 1692e(8).

I hope this is responsive to your request.

Sincerely,

John F. LeFevre
Attorney

Enclosure

Originally Posted by squirrels

Cute Chick,

I have looked a little into the caselaw definition of verification per FDCPA, and unfortunately it looks like it works more against us than for us. However, if I remember correctly, the Supreme Court has not decided it (or have decided by refusing to hear it), and the issue has not reached various circuit courts either. The few that have decided the issue have ruled not in our favor. Due to this, I think the primary issue should not be geared towards deciding what verification means, but what is deemed admissible evidence to prove the verification. Find caselaw concerning evidence as inadmissible that is identical or very similar to what the CCC will say is verification of the debt, i.e. unsigned photocopies of billing statements. The problem is that some debt collectors can get signed affidavits from the alleged proper person who works in the CCC billing department and can attest that these redcords are kept properly, blah, blah, blah. Here would be the proper time to insert the applicable statute that evidence cannot be purchased (some debt collectors do pay $$$ to receive those billing staements, affidavits, etc.). If the attorney is a first party for the CCC, this will be tough if not impossible to prove. Keep in mind that some battles are not worth fighting. Settlement may be appropriate. I plan to settle mine soon. I'd love to assist, but I just do not have the time right now. Good luck.

-squirrels

Hey Squirrels I think you're right. Remember that case Spears v. Brennan that everyone treats like the bible for defining verification? Well, in my opinion, that case is a debtor's nightmare. Why? Because the judge says *although a copy of the contract alone is not enough to verify the debt, the debt could be verified if the contract contained an accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments. . . . .* This quote is on page 23 in my version of the case but just look at the last paragraph of the opinion (right before the Conclusion) to read the entire holding.

Now look up the word *verification* and *verify* in Black's Law Dictionary are you will cleary see that this court opinion is totally off point . . . . . .

So yeah Squirrels the counter argument you speak of is found under Rule 1001 of the Federal Rules of Evidence - the Best Evidence Rule. This rule basically requires the proponent to produce the original document or a duplicate (i.e. a photocopy if I'm not mistaken). And if the original or dupe is lost, stolen, or cannot be obtained, the proponent must show that it is acting in good faith in producing a copy . . . . . . Actually, this is what the creditor will argue to confuse the court . . . .

The real rule to consider is UCC 3-302 here since we're dealing with our original Prom Notes or negotiable instruments. The UCC says that the proponent MUST show the original note in order to prove that it is a Holder in Due Course (i.e. has a legal right to collect payment on the debt). Remember, the Promissory Note is seperate from the original loan agreement we demand verification of in most cases (read your loan documents to make sure).

UCC 3-309 is the exception to this rule and the creditor may show a copy of the Prom Note to prove his Holder in Due Course status ONLY IF it satisfies all 3 requiements under 3-309, which is almost impossible for ANY creditor to do because most of them sell the Notes in a flash. So you see, the UCC is our friend because it protects us against having to pay the same debt to another bank - that is the bank (or 3rd party) who purchased the Note from the creditor . . . . .

And even if the creditor says that it is a Holder in Due Course because it destroyed the Note to comply with the UETA, this defense is invalid because the UETA does not apply to Article 3 of the UCC (Negotiable Instruments). See my other thread on the Banking Board *Wow They Put It In Writing* for more info on the UETA.

And for affidavits, the general rule states that the affiant must have personal knowledge of the matter asserted. See Federal Rules of Evidence Rule 602. That affidavit serves as written testimony and the person taking the oath is a witness. Therefore, if the witness doesn't have personal knowledge of what he/she is testifying about (in other words, the person doesn't know what he/she is talking about), the affidavit is no good and the evidence is deemed inadmissible.

So this is my strategy I guess. Thanks Seeker for helping me organize my thoughts . . . By the way, how do you plan to settle your accounts? Prom Note for Accord and Satisfaction??

Cute Chick,

You go girl - spoutin that knowledge! I love it! Yeah, courts do not care about the dictionary definition of verification. And of course all affidavits are based on first hand knowledge and whoever signs it will say that, even if it is untrue. If the CCC/collector/attorney/whoever is suing you on the note/contract, then you may have an out with the HDC argument. But if the CCC/whoever is suing upon an "account stated," the HDC argument is moot. The owner of the account is the creditor and the plaintiff is the master of his claim. If plaintiff does not want to introduce issues of the note, he doesn't have to. And as a defendant, the court won't hear the HDC argument b/c it is inapplicable as no one is suing upon it. Every time defendant "pays" on his "billing statement," he reaffirms and accepts the terms of the contract/account. Any CCC/attorney/etc. worth their weight will never sue upon breach of contract or default upon the note. They sue upon the account stated. Now the legal game is playing by a different set of rules. This is the game I am playing right now.

Some battles are not worth fighting or taking the risk of losing. Because my "account stated" is not a large amount, I think it is wiser to just give them more FRN's to make them go away and I can move on with my life. Otherwise, I run the risk of litigating until I have exhausted all my energy, time, money, resources, etc. and if I still lose, then this compounds what I will already "owe" and add to that the other sides attorney fees, interest, etc. and then I could owe double or triple what was originally owed. I've seen it happen. A $7,500 account turned into a $19,500 account after the smoke and dust settled. I don't even want to think what those numbers would become upon appeal. Sometimes it is better to run away so you can live to fight another day. This (unfortunately) is my decision.

-squirrels

Originally Posted by squirrels

Cute Chick,

You go girl - spoutin that knowledge! I love it! Yeah, courts do not care about the dictionary definition of verification. And of course all affidavits are based on first hand knowledge and whoever signs it will say that, even if it is untrue. If the CCC/collector/attorney/whoever is suing you on the note/contract, then you may have an out with the HDC argument. But if the CCC/whoever is suing upon an "account stated," the HDC argument is moot. The owner of the account is the creditor and the plaintiff is the master of his claim. If plaintiff does not want to introduce issues of the note, he doesn't have to. And as a defendant, the court won't hear the HDC argument b/c it is inapplicable as no one is suing upon it. Every time defendant "pays" on his "billing statement," he reaffirms and accepts the terms of the contract/account. Any CCC/attorney/etc. worth their weight will never sue upon breach of contract or default upon the note. They sue upon the account stated. Now the legal game is playing by a different set of rules. This is the game I am playing right now.

Some battles are not worth fighting or taking the risk of losing. Because my "account stated" is not a large amount, I think it is wiser to just give them more FRN's to make them go away and I can move on with my life. Otherwise, I run the risk of litigating until I have exhausted all my energy, time, money, resources, etc. and if I still lose, then this compounds what I will already "owe" and add to that the other sides attorney fees, interest, etc. and then I could owe double or triple what was originally owed. I've seen it happen. A $7,500 account turned into a $19,500 account after the smoke and dust settled. I don't even want to think what those numbers would become upon appeal. Sometimes it is better to run away so you can live to fight another day. This (unfortunately) is my decision.

-squirrels

That is why you request verification from the outset. If the account is deleted, that *account stated* argument fails. And correct me if I'm wrong but is there such a claim called *account stated* under the law?? That's a new one for me . . . .

And even if the account is presumably *verified*, the defendant can always file a counter-suit for fraud in the inducement. If the initial agreement is based on fraud, it is void from the start, regardless of subsequent transactions such as payment on the fradulent account. I discussed this on my other thread on the Banking board but a valid and legally enforceable contract exists when there is an offer, acceptance, mutual assent, and consideration. If the creditor cannot prove this (and they usually cannot because there's no full disclosure of the costs/risks of the loan that will satisfy the mutual assent and consideration requirements), the contract is void. Those subsequent payments that you made on the account were based on fraud and should be returned to you as your damanges. It's as simple as that. You can't put the cart before the horse in this case.

Moreover, this is why one should also demand that the creditor prove its HDC status along with VOD. The verficiation of debt issue deals with the original loan agreement while the HDC issue deals with the creditor's legal right to collect payment from you. The creditor must prove that a contract exists and that it is a HDC to prevail and take your money . . . . .

So Seeker how do you plan to settle? Do you plan to issue a Prom Note for the payoff amount or what?

Cute Chick,

Yeah, verification, right to collect, etc. from the outset - I agree. Unfortunately, my case was a botched A4V matter. I tried the private remedy and it fell flat on its face dead. So, this puts me in a bind that I do not have the use of certain legal arguments.

I do not understand when you say that if the account is deleted the account stated argument fails. Who & Why would they delete the account? There is no way in hell the creditor is going to delete the account, and if all 3 CRA's delete their account of the creditors account, it does not mean that the creditors account no longer exists or is not valid (it may be evidence thereof, but there are other admissibility issues here IMHO). Also, "account stated" is very old and is nothing new. It is a basic common count that has been around for at least 100+ years, and 200+ and much more is very likely.

And "cart before the horse?" I think you would be right if the contract were void from the beginning as an illegal and unenforceable contract; but it is only voidable. Because it is a voidable contract and there has been some performance by both parties (even though it's rooted in fraud), the court is not going to stand by and grant alleged debtors windfall victories when benefits have been received by debtor (products/services purchased with the CC). This is like saying that upon a construction contract that was voidable b/c fraud or whatever, and the party (debtor/buyer) who decides to void it after performance has been rendered (by creditor/builder) gets to keep the whole building and (debtor) gives nothing to the builders/contractors, etc. and wins everything. Equity will intervene to disallow any windfall for unjust enrichment in that case (in the courts eyes). The problem is that even though forfeiture should be the correct outcome (b/c the banks hands are filthy-dirty and actually have no real assets at risk in the contract; forfeiture would operate as a punitive remedy in this instance), this is damn close if not impossible to prove.

Sure, file a counter suit for fraud in the inducement. How do you plan to prove this? There is existing a presumptiopn of a valid binding enforceable contract, and the burden is on the moving party to prove otherwise; in this case, fraudulent misrepresentation. The creditor doesn't have to prove anything. This is not an easy thing to do when the burden is upon you. If you are not familiar with the "Book of Approved Jury Instructions," go to the law library and take a look at what the exact elements are needed to prove such a thing. Can you extract those subjective intent elements out of the bank with the current legislation in place that supports fractional reserve banking?

Please don't take my post the wrong way. I am really playing a "devil's advocate" position for all of our benefit. It is best to work out difficulties here, rather than be hammered by them in a courtroom. I do hope that I am wrong. But I am fairly certain I am not.

-squirrels

Originally Posted by squirrels

Cute Chick,

Yeah, verification, right to collect, etc. from the outset - I agree. Unfortunately, my case was a botched A4V matter. I tried the private remedy and it fell flat on its face dead. So, this puts me in a bind that I do not have the use of certain legal arguments.

I do not understand when you say that if the account is deleted the account stated argument fails. Who & Why would they delete the account? There is no way in hell the creditor is going to delete the account, and if all 3 CRA's delete their account of the creditors account, it does not mean that the creditors account no longer exists or is not valid (it may be evidence thereof, but there are other admissibility issues here IMHO). Also, "account stated" is very old and is nothing new. It is a basic common count that has been around for at least 100+ years, and 200+ and much more is very likely.

And "cart before the horse?" I think you would be right if the contract were void from the beginning as an illegal and unenforceable contract; but it is only voidable. Because it is a voidable contract and there has been some performance by both parties (even though it's rooted in fraud), the court is not going to stand by and grant alleged debtors windfall victories when benefits have been received by debtor (products/services purchased with the CC). This is like saying that upon a construction contract that was voidable b/c fraud or whatever, and the party (debtor/buyer) who decides to void it after performance has been rendered (by creditor/builder) gets to keep the whole building and (debtor) gives nothing to the builders/contractors, etc. and wins everything. Equity will intervene to disallow any windfall for unjust enrichment in that case (in the courts eyes). The problem is that even though forfeiture should be the correct outcome (b/c the banks hands are filthy-dirty and actually have no real assets at risk in the contract; forfeiture would operate as a punitive remedy in this instance), this is damn close if not impossible to prove.

Sure, file a counter suit for fraud in the inducement. How do you plan to prove this? There is existing a presumptiopn of a valid binding enforceable contract, and the burden is on the moving party to prove otherwise; in this case, fraudulent misrepresentation. The creditor doesn't have to prove anything. This is not an easy thing to do when the burden is upon you. If you are not familiar with the "Book of Approved Jury Instructions," go to the law library and take a look at what the exact elements are needed to prove such a thing. Can you extract those subjective intent elements out of the bank with the current legislation in place that supports fractional reserve banking?

Please don't take my post the wrong way. I am really playing a "devil's advocate" position for all of our benefit. It is best to work out difficulties here, rather than be hammered by them in a courtroom. I do hope that I am wrong. But I am fairly certain I am not.

-squirrels

Well Squirrels all I will say is this: I have several years experience in the legal profession dealing in the area of contract law and civil litigation. These banking issues we address on this board is nothing more than basic contract law and litigation issues and there is way too much for me to explain on this board with respect to how Contracts works, how to submit items into evidence, how to start a countersuit, etc. You'll need at least 3 years of formal law school training plus several years of practical legal experience to understand the theories and logic behind all of this. It sounds like you need an Attorney to help you with your case.

[seeker]

Something I learned in a Victoria Joy seminar -- and she was talking about criminal law at the time but it is applicable across the board -- ask the party to not only swear under penalty of perjury, but under their FUll COMMERCIAL LIABLITY -- this means that that put their ass on the line -- their house, their boat, their luxury car, whatever! A judge gets to decide the penalty for perjury -- most often when an 'officer' or whatever is caught in a perjury, the judge says "$10.00 fine and don't do that again!" wink, wink. But under full commercial liability they open the door for a personal liablity suit without benefit of 'immunity'. I recently had an attorney tell me that few people will use an affidavit for appearing in court, (as in a 'witness') and absolutely none that he has ever dealt with would do a full commmercial liability affidavit. Seems to me that that would seal a case if you pushed the issue (he wouldn't so my son is sitting in jail)
Just a thought.

Seeker

Originally Posted by seeker

Something I learned in a Victoria Joy seminar -- and she was talking about criminal law at the time but it is applicable across the board -- ask the party to not only swear under penalty of perjury, but under their FUll COMMERCIAL LIABLITY -- this means that that put their ass on the line -- their house, their boat, their luxury car, whatever! A judge gets to decide the penalty for perjury -- most often when an 'officer' or whatever is caught in a perjury, the judge says "$10.00 fine and don't do that again!" wink, wink. But under full commercial liability they open the door for a personal liablity suit without benefit of 'immunity'. I recently had an attorney tell me that few people will use an affidavit for appearing in court, (as in a 'witness') and absolutely none that he has ever dealt with would do a full commmercial liability affidavit. Seems to me that that would seal a case if you pushed the issue (he wouldn't so my son is sitting in jail)
Just a thought.

Seeker

Is there any case law or statutory law requiring one to pledge his/her commercial assets when attesting to an affidavit?