Dunning Notice Questions

[Booner72]

If the CA doesn't send you a notice for whatever reason (Say, the used an old address, didn't get forwarded, etc), are you still within the timeframe to DV if you do so based upon an alert from a CMS or find out in some way when credit is checked?  Would sending the DV within the 30 days of it hitting your reports force them to respond to the DV moreso than finding a collection that hit 6 months earlier?

Wouldn't you think CA's should be required to send certified letters for the initial dunning notice to cover their a's that they did indeed, send such a dunning notice?

Is "dunning notice" the real term for this initial letter, or is that Forum-Speak?

I'm helping a friend, and also I'm asking for my recent surprise.

[RobertEG]

Dunning notice is used to refer to the requirement under FDCPA 809(a) that a debt collector must send you a formal collection notice within 5 days of any initial communication with the consumer regarding the debt.  Failure to provide timely dunning notice is a violation of the FDCPA, but consumer recourse does not have strong teeth.

You can file a complaint with the FTC, who might send them a letter of inquiry, but the FTC does not bring legal action on behalf of individual consumers..  You can write others and complain, such as your local BBB or state AG.  Or you can bring your own civil action.  In my opinion, debt collectors dont tremble over FDCPA violations.

Any DV is always timely until the debt collector has sent dunning notice, and more than 30 days has expired since that date.  Lack of timely sending of dunning notice might be an issue to raise in your DV, but I doubt that it makes much of a difference in their decision of if or when to provide debt verification.  

[Booner72]

ANDERSON FIN NETWORK/BLOOM (XXXXXX5874) Opened: 1/2012 Show/Hide Details

Balance: $165 Credit limit or largest balance: Not Reported Past due: $165 Payment terms: Not Reported Status: At least 120 days or more than four payments past due First reported: 5/1/2012 Portfolio type: Open Account     Description: Collection account Contact: ANDERSON FIN NETWORK/BLOOM, 404 Brock Dr, PO Box 3097, Bloomington, IL, 617023097

How new accounts impact your score:

The effect of a new credit account on your FICO® score will vary and depends on many different factors.

A new account on your credit report may initially lower your FICO® score because it can be an indication that you need more credit. Typically, consumers with financial difficulties need more credit and are less capable of paying their debts.

While your FICO® score may drop when a new account first appears on your credit report, it can positively affect your score over the long term if it reflects responsible use of credit. That means making all payments in full and on time. Opening a new account can also help your FICO® score over time if you had minimal credit history with very few accounts when you opened the account.

How a new account impacts your FICO® score also depends on your mixture of credit. For example, opening a new mortgage account may be more favorable to your score than opening a sixth credit card.

A new account is not necessarily one that was just opened. You may have opened a new account with a creditor several months ago, and the creditor did not report the account until recently. If the account is in bad status (such as a history of late payments or a large amount past due), your FICO® score could drop significantly when it first appears on your credit report.

RobertEG - I guess what you are saying is that it doesn't matter that I didn't get a Dunning Notice, nor does it matter if anyone gets a Dunning Notice.  If so, why the importance of discussing the Dunning Notice in the first place?

This is how it has reported to my EQ report - Did I only lose 10 points because FICO is seeing this as an ACCOUNT?  WEIRD..........how did I only lose 10 points???  I don't want it to get worse by messing with it, so I really need to know.  Thanks!

ETA:  On this same day I got an alert (just noticed) for balance increase on credit score - up to 70% on one account (Will PIF On due date)......So, I'm just not getting this whole thing, not complaining, but need to know how to not make this Worse, because as I said, I am not paying this.

[rckstrscott]

Well, I would assume it matters depending on what course of action you take.. Clearly, the CA's don't nessicarily tremble at consumer threats, but if you were to file a lawsuit against them for the violation, maybe they would care more in your situation..

LVNV didn't send me a Dunning, and I used RobertEG's explanation and statute references when I filed the BBB complaint. Did that really get the account removed? I think it did because not everyone had success going the BBB route with them.  So, in MY situation, my knowledge of the FDCPA helped and I was able to compel them to delete the account.. but I was going to file a suit against them if they didn't comply. I was that ticked off they put it on my credit file right when I applied for a mortgage (yes, I did opt out haha)

I totally understand what you are driving at. The CA's are very cavalier with the Dunnings, and who knows, maybe they even do softpulls to intentionally send to bad or old addresses on your report just to claim they sent it. We all know CA's are often terrible.

-scott

[RobertEG]

Yeah, I guess I am kinda inferring that dunning notice is not that significant by saying that failure to receive timely dunning notice takes a whole lot of time to challenge as a violation.

However, providing timely dunning notice is a requirement of the statute, so a violation is a violation, and might be useful as side pressure or in litigation as a showing of their disregard for their statutory obligations.

The statutory requirement to provide timely dunning notice is primarily to provide the consumer the ability to timely obtain information from a debt collector, such as the name of the creditor, the amount of the debt, and of course, the fact that a debt collector is now pursuing active collection of a debt.  The primary damage of not providing timely dunning notice comes about when they report their collection to a CRA without notifying the consumer, resulting in ongoing harm to the consumer's credit score without their knowlege, and thus ability to make a timely challenge.  So it can have a huge impact if a submarine collection sits in one's credit file for a period without the consumer's knowledge.

However, in situations where, notwithstanding the absence of dunning notice, a consumer does become aware of the commencement of collection activities, lack of dunning notice can actually become an a future "advantage" to the consumer.  Any DV sent without dunning notice is automatically timely, and invokes the cease collection bar provision of section 809(b).  Sure, the debt collector has not advised the consumer of their DV rights, but at the same time has not invoked the period for timely DV.

The main problem, in my opinion, is the absence of timely dunning notice after having reported to a CRA.  Most consumers dont regularly pull their own credit reports, and thus can have active score damage without their knowledge.

[Booner72]

Good news that my DV will be timely - thanks to both of you for your replies!

Does anyone have any thoughts on how the collection reported, and why I only lost 10 points?  Do you think it is bc it is scored off the DOFD, or bc I have such a crappy report, a collection doesn't hurt?  OR is it because it is reported as a NEW ACCOUNT?

[rckstrscott]

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@Booner72 wrote:

Good news that my DV will be timely - thanks to both of you for your replies!

Does anyone have any thoughts on how the collection reported, and why I only lost 10 points?  Do you think it is bc it is scored off the DOFD, or bc I have such a crappy report, a collection doesn't hurt?  OR is it because it is reported as a NEW ACCOUNT?

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I don't have a theory, but I had same thing happen with mine.. When the LVNV hit, it only dropped mine 19 points.. but as you know, since you just went through the mortgage process yourself, the 'new' account from Dec 2011 was fixin' to kill my mortgage deal.. Which is why I was irritated they DIDN'T send a dunning..

In fact, the JDB's who do this to people applying for home loans, you'd think sending a dunning would be beneficial, because I will tell you what, if that had sent a dunning I would have paid it on the spot to keep it from reporting. They lost themselves money, at least in the interim, by reporting and not dunning. BBB complaint was chaulk full of legal references to them not sending it, the FDCPA and my threat to sue (and I was gonna do it, cause I was SO angry)  and at least I got my way.

I just hypothosized that my report was still kinda rank (my score is good, but thats because of my credit situation, not my old accounts) -- since I still show 3 collections, and two public record. I just wrote it off as FICO seeing one more additional new negative account. I would gather if they would have listed the account as opened Dec 2009, but reported Dec 2011, it wouldn't have changed my FICO score at all. But that is just my guess.

Ya know, I have seen alot of your posts about Opting Out... I think in my case, they purchased the account in Dec 2011, prior to my opt out. So even thought I opted out with plenty of time to spare, they were already able to obtain their permissible purpose and get that sniffer on my file. Either way, it was clearly obvious. They put a hard pull the same exact day as my lender... ugh.

-scott

[Booner72]

Thanks, Scott! I really believe in the Opt Out. That's why I preach it so much. If I can save one person from getting a collection during the mortgage process, it's worth it. Plus, the CRA's lose money for all of us that opt out. And THAT, my friend, is a good thing.