Need advice on disputing item with credit bureau. Old Western Sky loan parked on report.

[Anonymous]

I sent the following letter to Diaz & Associates on January 2 pertaining to an old Western Sky loan in my credit report.  Original post about it is here https://ficoforums.myfico.com/t5/Rebuilding-Your-Credit/How-to-proceed-with-Diaz-amp-Associates-JDB-...

This is a pretty long, but fairly intense letter and their response and my questions follow after.

———

To Whom It May Concern, 

I have recently discovered that your firm is reporting a collection account on my credit report.  I am now requesting proper validation and disputing this entry based on the following points:

1. I have never received a letter, phone call or any other type of communication from you stating that a debt with you even exists, much less that it can and will be reported on my credit report.  This would encompass any and all details related to the entry itself, including all dates, dollar amounts, and any other information being reported.
2. I have no proof that Diaz & Ass. has a right to collect this alleged debt and are slyly attempting to do so by reporting this on my credit report.
3. I do not believe that Diaz & Associates has a right to collect any debt from me based on my state debt collection law(s).
4. That your firm is not legally able to collect or enforce this alleged debt based on adjudicatory actions previously issued to Western Sky.
5. That Western Sky is/was a known fraudulent lender, whose business practices, loans and collection were deemed illegal and unenforceable.
6. That Diaz & Associates are merely trying to collect on an alleged and fraudulent debt by “parking” a debt on my credit report without any proof or basis in which to do so.
7. That Diaz & Associates has no legal proof or basis in which to sue for this alleged debt and has no intention of doing so.
8. That Diaz & Associates is attempting to virtually extort payment of alleged debt by reporting to credit bureau(s) years after debt was allegedly defaulted upon.

Please note I am not requesting a verification of your records, I am requesting validation.  If Diaz & Associates determines they have a right to continue reporting this item, I expect full documentation of how the debt remotely exists to include all calculation of amounts owed and paid thus far, all proof of your right to collect alleged debt, all contracts, and all proof that shows this is not an illegal and fraudulent collection account.  Additionally, I am requesting your method of calculating interest accruing monthly that is reflecting on my credit report.  Proof of my liability is my legal right under the Fair Debt Collection Practices Act.

Assuming that Diaz & Associates cannot provide this information, under Fair Credit Reporting Act rules, I am demanding that this item be completely removed immediately from any and all credit reporting agencies.  Failure to do so will result in my bringing forth a lawsuit against Diaz & Associates for violation of my rights under FCRA, violation of state debt collection and licensing laws, and violation of rules under the Fair Debt Collection Practices Act.

Please reply ASAP regarding this matter.

———

Their reply, dated January 9 (one week later, ie almost immediately after receiving my letter) is as follows:

“We are well versed in the FDCPA and other state and local collection regulations.  We absolutely obey and adhere to all collection laws governed by the Fair Debt Collections Practices Act, Federal Trade Commission and the Attorney General.”  (I believe this is a standard, blanket statement that they add to ALL correspondence.  I saw the same thing, word for word, on several responses to others BBB complaints.)

“Regarding the dispute we received about your account in our office, we have since closed said account in our office and we have halted all collection activities.  We have also placed your account with the original client.  We have also sent out an UDF form to update our trade line if we have reported.  If you have any further questions or concerns please contact (name and phone number).  We apologize for any inconvenience this may have caused.”

Based on my original letter and their response, do you believe I have enough solid evidence to dispute this directly with the credit bureaus and have the trade line deleted?  The CA has not removed or updated ANYTHING, and the last time they reported anything at all was in October and before that May 2018.  That tells me they don’t frequently update and would obviously have no reason to rush deleting this.  I’m not even sure what reason to list for the actual dispute on the form.  Any comments or suggestions from anyone?  I apologize for the length of all this haha.  To say I was a little heated when I fired off the letter to them is an understatement lol.  Thank you!

[FireMedic1]

Who's the OC? When was the DoFD? Amount, ect

[Anonymous]

OC was Western Sky LLC and DoFD is March 2014. The principal of this loan has been paid and this CA is trying to come after ridiculous interest that has been deemed illegal in like 26 states. Western Sky has been closed for several years now, so I’d be very curious where it’s going if they’re placing it with the “original creditor”. I’m just wondering how exactly I should go about getting it removed since they’re in no rush.

[bass_playr]

Western Sky did stop lending money in 2013, but that does not mean they disappeared completely.  Western Sky has been replaced by WS Funding, LLC.  It's affiliated with Cash Call, and also with debt collector Delbert Services Corp.  They are all owned by J. Paul Reddam.  The CFPB filed suit against them in 2013, alleging that even though WS itself stopped its business, WS Funding, Cash Call, and Delbert all worked to continue collecting payments from consumers.  They entered into a servicing agreement with Western Sky in 2009.  But since Western Sky closed its doors, any agreement should have become null and void, as they can no longer continue to act on behalf of a company that does not even exist anymore.  

The case was ultimately moved to federal court in CA, and a $10 million judgment was awarded to the CFPB.  But they actually sought $287 million, and if I recall right, the CFPB appealed the court's ruling.

[RobertEG]

I assume that your letter was intended as a DV request under FDCPA 809(b), and not a direct dispute under FCRA 623(a)(8).

There is no period for response to a DV request.

If timely (meaning sent within 30 days afer their dunning notice), a DV request imposes a cease collection bar, which remains in effect until such time as the debt collector chooses to respond.  They can choose to delay indefinately without any violation, as long as they do not continue active collection.

The FCRA does not impose any deletion requirement based on lack of response to a DV request.

The FDCPA does not explicityly require a debt collector to send proofs and documentation in support of their finding of validation of a debt.

The case law in most appellate jurisdictions has generally held that documentation is not a requirment of section 809(b).

Neither the FCRA nor the FDCPA require any prior contact or calls prior to reporting a collection to the CRAs.

Accusations of fraud by either the lendor or debt collector are serious allegations of intent to deceive that require factual proofs on the part of the accuser.

Assertions of a bar on collection activities based on some unspecified  prior legal rulings requires citation of the basis for such an assertion.

General reference to "state collection laws" is vague.  What state, and what section of statute have they allegedly violated?

If you wish to pursue a dispute with the CRAs, you need to reference FCRA 611, identify the information that you consider to be inaccurate, and provide your rationale for the assertion that the reporting is inaccurate or otherwise violates the statute.

Finally, FCRA 623(c) bars a consumer from bringing civil action against a furnisher regarding the accuracy of informaiton they have reported to a CRA.  You must first file a dispute with the CRA under FCRA 611, and then base any subsequent civil action on a lack of reasonable investigation of the dispute, and not upon their having reported inaccurate information per se. 

[Anonymous]

You did see that the CA responded, yes? As far as the DV/dispute request goes, they never sent any sort of dunning notice. The first I knew of it was it reporting on credit report. I took the chance of simply demanding it and seeing how they would respond. As far as fraudulent goes, there are MANY actions I could have cited in support of that and if necessary, would absolutely do so. In this initial letter I didn’t feel it was necessary to bog it down further with citations. Again, wanted to see how they replied. The fact that they replied almost immediately tells me they didn’t have much to stand on as far as collection goes.