FDCPA says they have to "cease collections" if they don't validate. But it doesn't specify how soon they have to cease. Since they got the DV letter on 7/18, it could take a couple of weeks for them to decide what to do, and do it. If they know they cannot validate the debt, then they might just leave it on your CRs and go away.
Cass letter says they cannot continue to report if they don't validate. But it doesn't stipulate how soon they have to delete the TL if they don't validate. As such, "reasonableness" would have to prevail when considering legal action as a judge would likely grant them the opportunity to either validate or delete the TL in "reasonable period of time".
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.
I would give 'em a few weeks, and if they don't validate and don't delete the TL then send a second DV letter telling them they are now in violation of §809(b) FDCPA since they have not validated and have not ceased their collection efforts. Include a copy of the Cass letter.
Also dispute with the CRA at that time. Send them a copy of your DV letter (photocopy it, and on the backside photocopy your CM receipt and RRR green card). Make some mention in your dispute that you are "given to understand that §1692e(8) requires the debt collector to notify the credit bureaus of the dispute, and if they don't validate their claim to the consumer--which they have not--then they must delete the credit bureau reporting of this tradeline."