Disputing Credit Items with an Original Creditor or Collection Agency

Inevitably, if you have several negative accounts on your credit reports, you will hit a brick wall. The Credit Bureaus will verify some of your accounts again and again, and may even start to throw out your disputes as frivolous. This is when it is time to dispute your debts directly with the original creditor and/or collection agencies. It is usually very easy to catch your original creditors and collection agencies in violation of the Fair Credit Reporting Act (FCRA) and/or the Fair Debt Collection Practices Act (FDCPA). Here are the 3 most common violations:

(1) Dispute the debt with the collection agency or your original creditor using one of the letters in our download section sent via certified mail, return receipt requested. If they fail to respond to your dispute within 30 days, they are in violation of Section 809 of the FDCPA.

(2) They Verify your Debt as Valid with a Consumer Reporting Agency without validating the debt directly with you as per FDCPA § 809 , which is a violation of the FCRA § 611.

(3) They fail to notify any such said Consumer Reporting Agency that the consumer (you) is disputing the debt is a violation of the FCRA § 623(a)(3) and the FDCPA § 807(8).

The third violation is usually the most common. If you dispute your debt, the creditor or collection agency is required by law to report your debt to the Credit Bureaus as "disputed". If you get your credit report 30 days after the creditor or collection agency receives your dispute letter, check to see if the debt is listed as disputed. If not, they are in violation of the FCRA & FDCPA. You can then file a claim against them in Small Claims Court, which is very simple and should only cost you a minmal fee. The amounts you can sue for each violation are listed below. 99% of the time, they will immediately delete the entire listing in your credit file in exchange for you dropping the lawsuit. They don't want to spend more money to hire a lawyer to appear in court on their behalf. Even if they did show up, you are suing for violation of the FCRA and FDCPA, which you will have proof of in the form of your return receipt from your dispute letter. You are not going to court to try to prove that the debt isn't yours. NOTE - One of the companies may be stubborn and go to court. They will try to switch everything around and say to the judge that this debt is yours. Remind them that YOU are the plaintiff, and YOU are not the one on trial. They broke federal law, plain & simple. Take a copy of the following court ruling, which states that their violations have nothing to do with the debt being yours or not:

Spears vs Brennan Appeal from the Marion Superior Court - The judge ruled the following:

"As discussed previously, an FDCPA claim has nothing to do with whether the underlying debt is valid. An FDCPA claim concerns the method of collecting the debt. It does not arise out of the transaction creating the debt [.] Azar, 874 F. Supp. at 1318. Footnote: See 15 U.S.C. § 1692k (governing civil liability under the Act).

Here is a copy of the entire case: http://www.state.in.us/judiciary/opinions/archive/03260101.ewn.html Show it to your creditor/collection agency before the court date and they WILL get very nervous. They do NOT like to go to court with informed consumers!

When they ultimately agree to settle out of court (usually a few days before the court date), tell them you will drop the case only in exchange for a Manual Bullseye of the disputed account from all credit bureaus it is being reported to. That is the term they use for immediate removal. It will let them know that you are an informed & intelligent consumer.

Section 623(a)(3) of the Fair Credit Reporting Act:

§ 623. Responsibilities of furnishers of information to consumer reporting agencies [15 U.S.C. § 1681s-2]

"(a) (3) Duty to provide notice of dispute. If the completeness or accuracy of any information furnished by any person to any consumer reporting agency is disputed to such person by a consumer, the person may not furnish the information to any consumer reporting agency without notice that such information is disputed by the consumer."

Section 807(8) of the Fair Debt Collection Practices Act:

§ 807. False or misleading representations [15 USC 1962e]

"(8) Communicating or threatening to communicate to any person credit information which is known or which should be known to be false, including the failure to communicate that a disputed debt is disputed."

Typically, you can sue for up to $1,000 per violation of the above. It will also help if you can show you were denied credit or a loan recently, which may be due to their reporting error. This shows you suffered damages as a result of their non-compliance.