Dispute vs Collection

[Gail752]

I've been working on rebuilding my credit after 2 years of being unemployed. After following the advice of several posts on this board, i was able to secure a used car loan this week! Woo yoo - thank you! Monitoring my credit report these past two years especially right before I applied for the car loan has prompted a question I need answering. 

In November 2012, an old credit card account (that I had made monthly payments on until being laid of) was sold to a collection agency (who also has a connection with a collection attorney). I received a dunning notice in December 2012 and I sent the DV CMRRR within 30 days. In January 2013 I received a letter from said law firm that they notified the original creditor for more details on the amount owed and would forward that information once they received it. I've heard nothing since. In a credit report I pulled in early 2013 the status shows "collection" (by the said CRA) on 2 reports and "no status" on the third report. The agency updated all 3 of my credit reports with a comment "account in dispute" or "customer disputes account". One month ago, I received a summons that the law firm is suing me for the full amount of the debt. 

I have two questions: 1) it appears my account went into collection status even though I sent a DV (does that mean the lawsuit is a violation of FCRA?) and 2) I searched BBB and FTC complaints and in the BBB database there are numerous complaints like mine - collection proceeded with no response from law firm after consumers sent a DV. The law firm's response to the BBB complaint is The account is marked as being in dispute and we are accurately reporting the disputed status of the account. There is no statutory requirement to stop the credit reporting of a disputed account. 

Now I am confused as to what the difference is - I understand the terms but does adding a comment that the account is in dispute - validate a debt and allow them to proceed with their collection efforts? It would seem that they should make an effort to validate the debt first and then proceed. 

One last question my answer date is 11/11 - a national holiday - I plan on responding before then but is that another point I can argue? That the response date is invalid due to a national holiday (and the courts are closed)?

Thanks in advance!

[Anonymous]

Please read this E-book and go here for some insight on defending yourself. A timely DV, under FDCPA, requires them to stop collection activity UNTIL YOU ARE PROVIDED WITH VALIDATION. Updating the account to add 'disputed' remarks is not collection activity, but sueing you most certainly IS.  Now the question is this - Did they provide validation information with the summons? If they DID NOT then they are in violation and you have them by the short hairs. 

Also if you do not understand the legal concepts and processes outlined in the links I provided about, please get a lawyer. You can find one through NACA.org.

How much are they sueing you for?

[RobertEG]

Some debt collectors have chosen to create confusion by equating a DV request with a "dispute", and reporting as such to a consumer's credit file.

The problem sprinngs from the unfortunate use of the term "dispute" within FDCPA 809(b) when referencing DV requests.

The term dispute in the context of FDCPA 809(b) referebces a dispute of a debt, not the accuracy of credit reporting.

The same term "dispute" is used in FCRA 611(a) in regard to the accuracy of information reproted to a CRA.

Debt validatiion is a debt collection practices matter under the FDCPA that is separate from credit reporting.

Recording of disputes is limited to those under either the FCRA or FCBA, and not DV requests under the FDCPA.

If they have reported a DV as a dispute to a CRA, I would file a complaint with the CFPB.

FDCPA 809(b) precludes a debt collector from collection on the debt until they have provided response to a timely DV.

Case law has routinely considered reporting of a collection as a prohibited activity.

[Gail752]

NormanFH - Thanks for the links! I started reading them last night and will follow the steps included. The lawsuit says they are suing for $7659. I went back and checked the last bill I received from the OC and it was ess than $4000 so I assume the difference is legal fees and/or interest (which I requested an explanation or breakdown of monies or accountability  in my DV). I will keep you posted on the outcome. 

[Gail752]

RobertEG- I spent the evening searching for other peoples' complaints or any info to see if there was a pattern. Besides the comment on "dispute" I also noticed that several people (after being served with summons) agreed to settle for an amount less than owed with an agreement (the complaints don't state if the agreements are written or verbal) that the credit report would be updated with PFD or at least removed from collection. In many complaints, that hasn't happened. In fact most people report that the credit report reflected that only a portion was paid and the unpaid balance is reported as still outstanding. I did think about settling but after reasearching this company they don't seem to follow any rules. Thanks for your suggestion. I definitely will file a complaint against them.