Closed Rule

Consumer Debt Collection Practices (ANPRM)


The Consumer Financial Protection Bureau (CFPB) might propose new federal rules on how creditors and debt collectors can act to get consumers to pay overdue credit card, medical, student loan, auto or other loans. This decision matters to you if you

  • had an experience with debt collection (good or bad)
  • counsel consumers with overdue debts
  • have a business where you do your own account collection or
  • work in the debt collection industry

Here, you can learn what CFPB is thinking and what it needs to know. You can share information and experiences and discuss ideas with others. At the end of the discussion, CFPB will get a detailed summary and your input will help it decide what to do next. (This phase is for gathering information and brainstorming. The next phase would be where CFPB comes up with specific proposals and asks people to comment again before it decides whether to adopt those proposals as new regulations.)

Consumers and business both have a stake in effective, responsible debt collection practices. Don't be a bystander. Help CFPB make the right decisions about new consumer debt collection regulations. Share what you know and encourage family, friends and coworkers to do the same.

Discussion When consumers dispute a debt - 133

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1|What’s going on now with consumer disputes? - 41

Agency Proposal

Consumers have the right to dispute a debt in collection, and both FTC and CFPB get a lot of complaints that collectors have the wrong debtor or are trying to collect more than what's owed.

But CFPB is looking for better information on how many disputes there are and what they are about:

  • Are there good numbers on what percent of consumer debts are disputed? (Maybe these numbers depend on what counts as a “dispute.” See the next subtopic).
  • Does the type of debt (for example credit card vs. student loan) make a difference?
  • What are the most common things consumers dispute? (For example, someone else owes this debt; debt was already paid; past payments weren’t properly credited; interest or fees are wrong; identify theft) Are consumers usually specific about the problem, or do they just say generally that they dispute the debt?
Read what CFPB says in the ANPRM about Disputes and Verification and Definition, Types and Timing of Disputes.


Commenting is now closed.

As per state and federal laws; 'Collectors cannot pursue a debt once you've proven that it's not yours. So if you don't owe it, you need to act. Ask your bank or creditors to give you written proof, then send a copy of that proof to the collection agency.'

I received a bill from an attorneys office regarding a bill I did not think that was mine. I sent a certified return receipt request for validation but never received a response. So I sent a 2nd certified return receipt - request for validation and again never received a response. The attorneys office filed a civil suit and took me to court. I explained this to the judge and gave proof. The proof I submitted into the court file were copies of request of validation, the USPS certified letter statement's and request verification receipt statement's. This was all ignored by the judge because I was pro se and did not know Washington state law. I had made the request prior to this case being filed. Later it was explained to me by an attorney that the local county civil courts do not enforce federal laws, only state laws and in state court a request for validation is not recognized.
Please note: I also requested proof of licensing which I did not receive because the plaintiff was and currently is not a licensed in Washington state as a debt collection agency - they are attorneys.
The plaintiff won their case and I owed a debt that was not mine.
I ask you, where is the fairness in this?
What needs to occur is the laws need to be made clear for both the lay person and the judicial system.

Thank you for sharing your story, JOULES. CFPB is considering rules to make sure that debt collectors and buyers have more information about the debt (such as who the borrower is). Do you think that giving more information about the debt to the attorneys' office could have helped in your case? You can read more about that proposal and comment on it, here.

Moderator, I do not believe that it would have mattered. It seemed that the Attorney/debt collector was not looking for the actual debtor - I believe that all that they were trying to do was to make a quick buck. They did a couple of shady things with this case.

For a solution; the laws should be written so the common lay person can understand. If I had known that a validation request would not be considered I would not have wasted my time and paid even though it was NOT my debt.
Please note - I am NOT an attorney.

You may want to see an attorney specializing in FDCPA cases and take that collector to court. Federal law might be in your favor with all the validation requests ignored.

I have already spoken with an attorney. This is how I found out about the separation of state and federal law. Because I was sued in state civil court is why my validation requests were ignored by the plaintiffs as well as the seating judge. What I should have done (in state court) was sent a 'discovery' request AFTER the case had been filed rather then a validation request. Please note - the 'collection agency' was a large legal firm. They knew the laws well and whereas I was a lay person and not versed in law , I was like a sitting duck just waiting for the slaughter. If I did take them to court I would receive hundreds but it would cost me thousands....and I just do not have that type of money.
What really touched my heart was sitting in that court room and seeing others that also thought that the law would be fair if they represented themselves. Needless to say, we all lost and lost big time. I asked the judge why would he allow this when the plaintiff was a unlicensed collection agency and he stated ' they look like attorneys to me'.
I knew that at that point I had lost my case.

I had a particularly lousy experience with an abusive debt collector called Miracle Financial, working on behalf of Verizon Wireless to collect a debt I wasn't aware I had incurred and didn't believe I owed. The full account -- and dozens more from people leaving comments on my blog over the years -- is available at the supplied link.

Miracle said I had to speak to Verizon. Verizon said I had to speak to miracle. Short of going to court over a $50 debt, I had no options for resolving the situation. Meanwhile, Miracle's demeanor on the phone was abusive, and they promised to call every day for years unless I paid up. So I did.

It was an upsetting episode that left me feeling powerless--as if the whims (or mistakes) of corporate America dictated my financial liabilities, with no chance for appeal and potentially dire consequences for my credit rating. I'm very pleased to see the CFPB addressing these practices.

Verizon Wireless and Miracle Financial

Yes, one of the biggest scams that consumers get put through is the collection agency saying discussions about the debt have to be made with the parent company, and the parent company saying they cannot talk about the debt because it has been assigned to a debt collection agency, Please FIX THIS.

When I have a dispute thru FTC, credit bureau changes anything they can on my credit report.

The problem with disputes is the process is weakened by e-oscar. This process sees tons of paper work and faces road blocks. The solution is simply checks and balance and accesses to e-Oscars manual to see procedures for disputing errors on credit reporting. All the major bureaus do it and something must be done to empower the consumer not the credit reporting agency.

Hello quino1974, thanks for your input. In a December 2012 report, the CFPB highlighted the fact that the “e-OSCAR” system did not provide a means for credit reporting companies to forward to furnishers any documents submitted by consumers. “Since then, the CFPB has been working to ensure that the dispute system was improved. The “e-OSCAR” system has been upgraded so that the three companies can now send furnishers any relevant dispute documents mailed in by consumers” (see CFPB bulletin announcement.) Since CFPB is asking what new federal rules they could propose on how creditors and debt collectors can act to get consumers to pay overdue debts, what sort of checks and balances do you suggest for e-OSCAR?

Consumers should be able to review all encoding and information in e-OSCAR and there should be a comprehensive means to submit corrections and evidence to a dispute.

To start e-oscar should take internet complaints the same a shad written letters. They do not do that. They take internet disputes differently then they do hand written letter. That is in regards to disputed debts and it is important that the credit bureaus be consistent about the dispute process and the statues of limitations based on state laws. They should also have limits on how many collection agencies they sell the account of too including their shady practice of selling accounts of to collection agencies in different states. Their should be a cap on debts owed and the power that the agencies have on consumers. I think ultimatel it is about the collection agencies not abusing the consumer and helping consumers find ways to keep their accounts out default. A good start to offer consumers to get their accounts out of default would be based on charging consumers a small percentage of % coupled with a promissory note with a date to begin making payments to the debt collector. They abuse the consumers and they should stop it. Overall, the communication process between consumers and debt collectors is flawed with mis communications and a lack of options to pay back what they owe.

Thanks for the endorsement.

Thanks for the endorsement.

E-Oscar was created by the credit reporting agencies due to a requirement that is outlined in the Fair Credit Reporting Act. This process is fully electronic save for the consumer's ability to upload paper correspondence or documents for the debt collector/creditor to review. Additionally, the CFPB has published clarification as to the requirements surrounding a "reasonable investigation" when a dispute is issued, requiring debt collectors/creditors to go one step further. The underlying issue is this system is abused by many individuals who mass submit disputes repeatedly that have no validity. Agencies and creditors are forced to sift through all of those frivolous disputes in order to actually address legitimate disputes.

I have disputed debts with the credit bureaus but they do not even try to resolve the issues. You get a standard response from them. It is in their interest not to resolve issues. Furthermore, you cannot get them on the phone and if you mail your disputes to them you never get a response. They are part of the rip-off system to prey on consumers.

jfearon, I think you have to do it online. I was able to clean up a family member's credit report online.

Many recommendations are dispute credit report in writing since online is more rushed by the people hired to handle this. No requirement to do it online.

I guess I don't exactly understand the response. I suppose getting the credit report on paper is useful, but online one can actually fix multiple errors and then be notified once the changes have been made.

Possibly research FCRA violations if nothing is getting resolved correctly.

There should be only one credit bureau. They all contradict each other and it is a nightmare to get anything resolved. They should be highly regulated. This is an industry making money off making peoples lives miserable and ensuring no-one can get mortgages or loans. They are crippling the economy. They are in the pockets of the banks and big corporations.

I am concerned that there is some type of rewards system in place that somehow monetizes those who report when a consumer has a potential bad credit scenario. Are there incentives out there to ding consumer's credit? As a conspiracy theory it makes sense since it drives up the cost of a loan.

Bank of America, my mortgage holder, does NOT even allow a formal dispute to move forward. The past 12 months have been a continues headache with Bank of America. For example, our mortgage account have always been current, and never were we in Foreclosure status, nor even approaching default. However, every single month Bank of America reported to the three major credit bureaus that we were late. I've worked with their Military Liaison Officer on the resolution through phone calls, email messages, and formal letters but without success. Urgent Help/Assistance is needed for consumers to navigate and to resolve the problems that Bank of America is creating over simple and elementary issues of basic accounting procedures. Bank of America has the undue power of making reports to the credit bureaus which adversely affects the consumer. The Consumer lacks tools to challenge and fight back on Bank of America's abuse of power.

my in-laws had the same issue with BoA. They paid their mortgate EARLY every month and still were reported as late every month. This is tragic and ruined their credit. When these things happen it takes years for the credit to br repaired even though a collector reported the information falsely, incurracately, and repeatedly. BoA should be penalized HEAVILY for these infractions otherwise they just ignore consumers.

2012 FTC report -Identity Theft Tops List for 13th Consecutive Year in Report of National Consumer Complaints

I am concerned that state and federal agencies are contributing to identity theft, big time. In just the past month I had to make an online payment on what I believe was a federal hobbs act violation by the Los Angeles building and Safety department. A day after making the payment or risk losing my home, that same credit card was being used online by thieves. Then a few weeks later another agency asked for bank documents, I supplied them via fax, and they were lost! And on top of that, there really didn't seem to be a big deal made out of the fact that the documents went missing.

Hi Debt Neutrality Petition, if you have experienced trouble with a local agency, we suggest you consider filing a formal complaint with that particular agency. Thank you for joining the discussion on Regulation Room, and we hope you will continue reading and responding to CFPB's questions and proposals.

The first entity I will probably take to small claims court and possibly file a complaint with Kamala Harris. The second incident I started sending faxes messages in big bold letters to the same fax where my prior faxes had been lost, asking other workers to look to see if they had taken the papers by accident. I also faxed overnight warning those who might have access to that room that taking fax documents could lead to their arrest. I did this for several days in a row. It was the only way I could think of to apply a much needed enema to those who have established a routine and can't shake free from it. Of course this assumes that they care.

When I disputed the two years of 30% interest rate charges that Citibank tacked onto a defaulted credit card account of mine, (raising the default debt by OVER 5,000 DOLLARS) the debt collector refused to contact Citibank and said they had no way to lower the amount owed back to what it was at the time of the default. If this is the law, it needs to be changed. I should have been allowed to plead Involuntary Default (I had a perfect credit card payment record for 15 years and only had to default because I became a CareGiver for both of my parents) and simply be allowed to pay down the debt with no more interest rate charges penalties and fees. If you agree, please sign the debt neutrality petitionDebt Neutrality Petition

I have a debt in dispute with the CFPB, and it has not yet been resolved, but during the government shutdown the Original Creditor turned it over to a collection agency. The collection agency has not contacted me in writing at all, but they did a hard pull on my credit report. I legitimately closed the account when it was paid in full, but they continued billing me after I had cancelled the service. Now the matter is simply snowballing. I am very upset about this. If a consumer is in the midst of a dispute with the CFPB, I would think there would be a "time out" on collection actions and especially malicious hard pull of the credit report while the dispute is ongoing.

Debtors often respond with "I don't owe anything", which is vague and makes it harder to cater for their needs. If any rule making is needed, it is about the types of disputes a debtor may bring forth and the documentation needed for both the substantiation of that dispute (leaving the option for a dispute to be deemed frivolous) and what constitutes satisfaction of the dispute or proper proof. Otherwise, this is left for negotiation between individual collectors and debtors.

I think that the CFPB should come up with a regulation that prohibits a creditor, and a debt collector, from sending the debt for collection to another debt collection company AFTER a consumer disputes the debt, or sends a "cease and desist" letter to the debt collection agency. In my cases that I worked on, a "cease and desist" letter was sent to both the debt collector and original creditor requesting that they cease collecting the debt as per the FDCPA. However, all they do is close out one debt collection company and send the account to another one. Then the consumer has to repeat the process. The CFPB should come up with a regulation that states once the debt is disputed or a "cease and desist" letter is sent to the debt collector, THAT debt collector must advise the original creditor that a C&D letter was sent.

Keep in mind, a cease and desist letter does not stop a debt collector from attempting to collect a debt, it only stops the debt collector from communicating with the consumer via whatever method the consumer requests the contact to stop. This does not mean a consumer no longer owes a debt. I do agree with the fact that a debt collector must notify the creditor of disputes. As a matter of fact, legitimate debt collectors do this on a regular basis. As a debt collector typically does not own the debt, they're unable to control what a creditor does with that information, all they are currently able to do is implement internal controls that protect the consumer and the agency. In my opinion, a legitimate dispute should be defined as currently, a consumer solely mentioning the word dispute requires action on an account. I believe some sort of requirement should be imposed as to WHY an account is being disputed and some sort of evidence be provided to support the claim.

Hi javalaw03. Welcome to RegulationRoom, and thank you for joining the conversation. You may want to look at CFPB's sample letters for responding to debt collectors, as well as CFPB's website for submitting complaints about individual collectors. In addition, CFPB wants to know if consumers need information about their rights, like how to dispute a debt, in the validation notice. What information would be helpful to you? You can read more about what CFPB is suggesting under our validation notice topic post. CFPB is also asking how information should be transferred from one collector to another. You can read about the agency's questions and share the issues you've raised under the topic post Making sure debt collectors & buyers have info about the debt.

As for medical collections, I very, very rarely see a legitimate dispute. Most often people are just trying to get the item removed from their credit or scare the collector with threats of FDCPA action. Many of the disputes we receive are copied directly from the internet and contain all kinds of demands for proof that are not required by any state or federal law OR even the rules of evidence during trial. CFPB really needs to address this issue and set a clear standard for what is (or is not) a legitimate dispute and how the collector should respond.

I have a hard time believing that a debt collection company "treat[s] EVERY dispute the same" (see link: when debt collectors seem to blatantly disregard a dispute that has the appearance of being "copied directly from the internet." Consumer advocates are trying to educate consumers, debtors, and alleged debtors with information on how to handle debt collectors or how to handle their particular situation. We are try to give them relevant links to FDCPA, FCRA, HIPPA, and various form letters that can help them communicate with debt collectors. There is nothing wrong with form letters. But there is everything wrong with debt collectors disregaring certain letters just because they don't like that it came from a consumer advocate source. Debt collectors operating legally and with nothing to hide should never treat form letters as something to throw in the trash. You seem to be saying that debt collectors will only want to communicate with consumers who are misinformed and don't know what their rights are, rather than communicate with a consumer who knows the laws and the appropriate ways to address a letter of dispute.

The problem is not with a form letter of dispute. The problem is that these websites and unreasonable letters lead unsophisticated debtors to believe that a creditor has to provide extraordinary proof that simply is not required.

'stopwithspoofedcallerID' (if that IS your real name) is correct that no legitimate dispute should be ignored, regardless of the form, but nor should debtors be allowed to abuse the system by repeatedly asking for proofs that are not required.

When creditor or servicing company doesn't "credit" a payment after receiving it and then getter further proof but still puts the victim in arrears or foreclosure, there should be fines regardless of whether it is a "mistake" or "criminal act."

A grace period can be allowed but after that slap on the fines. and keep them coming every week they don't correct their problem. Basically by not crediting payment they are stealing that payment.

This should apply to any "mistakes" or unethical practices such as deliberately or "mistakenly" changing around escrow, interest, principal, late fees, insurance and so forth to the profit of the collector.

Heavy fines will take away the profit motive and such "mistakes" and unethical practices will greatly decrease.

Disputing an alleged debt if often very difficult because of the lack of information that is provided. This ties into the discussion about what should be required in the initial notice. Sending me a bill from XYZ Labs for a blood test that was done when I gave birth to my child? How am I supposed to know what doctor or facility conducted testing...or even are hospitalized and meet numerous physicians during your thing you get a bill from XYZ Medical Associates. When you do dispute a bill, the collection agency send you the same infomation over again. Creiditors should be required to list the service date(s) and any and all information that could help the consumer know who they owe a debt to. Agencies should not be able to put something on your credit report without first having attempted to collect the debt.

Hello hdhoward4500, welcome to RegulationRoom and thank you for your comments. Since you mention that disputes can be tied to the information consumers get in an initial notice, you may be interested in reading more about CFPB's proposals on the topic page The "validation notice" sent to consumers. What kinds of information from that list would have been most helpful to you? For medical debts, can you share more details about the specific documents or kinds of information that would have been most helpful to you?

Collection Calls and Dunning notices (via letter or email) should include a unique Collection ID. This would be listed in credit reports for the purposes of tracking and consumers would be able to enter into a online database provided by the CRPB with the type of violation or issue.

This would also make it easier for the CRPB to look up disputes and determine if there's an actual issue.

2|What should count as a “dispute?” - 38

Agency Proposal

The FDCPA gives consumers the right to dispute a debt (FDCPA § 809) but doesn’t say what a “dispute” is. For example, if a consumer contacts the collector to ask a question about the debt or say he/she doesn’t recognize it, is this “disputing” the debt?

CFPB basically wants to know two things:

  • what kinds of consumer contacts do debt collectors now typically treat as disputing the debt?
  • should there be a federal rule that defines “dispute” – and if so, what kinds of consumer actions should be included?

If a consumer wants to dispute information that a collector has sent to a consumer reporting agency (CRA), federal law (FCRA Regulation V. 12 CFR 1022.43(d)) now says the consumer must send the collector:

  1. enough information to identify the account involved
  2. an explanation of exactly what the consumer thinks the error is, and why
  3. documents or other information to support his/her claim that there’s been a mistake.

Should a new federal rule require consumers to provide specific information or documentation to dispute a debt in all situations, not just where the problem is with information reported to a CRA? What problems would this pose for consumers? Perhaps the consumer should have to do this only if he/she gets a validation notice that gives him/her the information needed? (See The "validation notice" sent to the consumer.)

Read what CFPB says in the ANPRM about Definition, Types, and Timing of Disputes.


Commenting is now closed.

When the wrong person is hauled into court, there is no dispute mechanism except to slog through the court system in front of a judge. I think there should be an efficient / effective way to be able to file a dispute with a NEUTRAL third party at the circuit court level that does not involve appearing before a judge. As it stands now in Illinois, it is the debt collector v. the alleged debtor/ wrong person (pro se) in a he said / she said. The lawyer is privileged and always presumed to be correct and truthful by the judge while the alleged debtor/wrong person is presumed to be lying, and /or trying to get out of something. Judges are not neutral third parties.

Even when the right person is hauled into court, everything From_ill_annoy stated is still true. Defaulters should not be forced to complete the same type of court papers that those accused of crimes are required to fill out and file. Since debt collection is not considered a criminal act, filing papers should be much much easier for the defendant, and, a defendant should be allowed to plead Involuntary Default and get a better result. such as the freezing of all interest rate charges, penalties and fees in exchange for the promise to pay, even if it takes ten years.

federal should clarify what should the debt be(the first one) not sold. Can only be placed on Credit bureaus on time.

linalex61, that wouldn't be very efficient. The FCRA does not allow reporting of a debt that is no longer being serviced by a creditor/collector. For example, if your creditor is currently reporting the debt but sells it to a debt collector, your creditor can no longer report on that debt. The buyer can, if he subjects himself to the corresponding federal regulation.

The most common consumer contact my firm receives as a dispute is the comment by the consumer on a call with the agency that "it's not my debt". While that may be a true statement in some cases, some proof from the consumer should be required as to why the debt isn't theirs. For our customers, proof of residence at a different address from where our service was provided is usually sufficient for us to remove that customer from the debt.

The consumers must understand that they have to work with the creditor or agency to correct whatever info lead to an "incorrect link" (common name, bad SSN, fraud...). The 3 items listed in CFPB summary is usually adequate.

That is not going to work. The burden of proof in the American Justice System is bore by the one who is making the accusations. Some debtors are going to lie and say that a debt is not theirs when it actually is, but that is the nature of the beast with debt collections. Innocent until proven guilty is the rules of the game. Otherwise I, as a debt collector, can accuse anyone of anything owning any amount and extort money from innocent people. Debt collection is about collecting debt, not about making accusations and extortions.

When two parties engage in a lawsuit, each side presents the evidence they have supporting their assertions. As a collector, I provide proof of the debt - invoices, letters to the customer or other communication with them to resolve the problem, signed applications, etc. The debtor is also expected to present some proof that the debt is not theirs. Yes, the assumption is innocent until proven guilty but you have to provide evidence to support your claim of innocence. If I offer a signed document that says you agreed to the purchase and documentation that supports that you did not pay, I have fulfilled my side of the burden of proof. The debtor also bears a burden of proof in our system. That's what the judge is for - to hear both sides, weigh the evidence, and make a fair decision based on the evidence and arguments presented.

There are requirements for validating a debt to the customer set in the FDCPA. There are investigation requirements in other aspects of federal law when a consumer disputes. A debt cannot simply be created out of thin air. Agencies who engage in this sort of practice are usually stopped relatively quickly and fined quite heavily (as well as subjected to cease and desist and regulatory action). The fact is, while a debt collector is required to maintain certain pieces of information and validate certain pieces of information, the consumer is not required to do anything further than say, "I don't owe this" to make collections stop for a period of time. Just like for debt collectors, the few that do it wrong ruin if for the many that do it right, consumers in my opinion should be required to furnish some sort of support of dispute.

Being in a court of law and talking to a debt collector on the phone that requires proof that the debt in question is not a valid debt, are two different things. If your intent is to sue, then sue. But requiring proof from anyone you call up and demand that they prove to you (and not a judge) that the debt is not theirs is extortion.

This comment is clearly WRONG. the burden of proof is always on the accuser; Not the accused!

You accuse me -- fine -- YOU PROVE IT!

No -- an Assertion that the debt is mine is NOT PROOF.

But that is exactly what happens when I get phone calls from debt collectors who are seeking out somebody that happens to have my name. The collector can not tell me anything about the debt that they assert is mine until I acknowledge that the debt is mine; which I will not do until they convince me that the debt is mine by supplying PROOF (not assertion).

My particular cause for anger is that someone with my name that lived in a nearby town clearly left some bad debt around -- student loan debt and various credit card debts (some with companies that I have accounts with) -- so now what to the debt collectors do? They start contacting everyone with the same name and start accusing them that the debt is their debt. That's what they did to me -- probably 5-6 different debt collection agencies over the past year -- all looking for the same person -- NOT ME!!

With the tidbits of info that I got from some of the collectors, I located the actual person's former address and some background info -- like his age range (per -- again, close to my own. Not hard stuff to do, but why do I need to field these calls? And there can be several calls a day -- starting at 8AM on a Saturday!

Then they just piss me off and I get rude and back and forth it goes.

The debt collectors don't do any proper research -- if they did then they would see that I have been at my address for the last 18 years!!

But no -- they just call and call and call.

What is my protection???

What is my recourse??

Isn't there something about a Right to Privacy somewhere in the BILL OF RIGHTS?

Why do I need to defend myself against a WRONG ASSERTION that the debt is mine?

You THINK its mine -- then you send me a certified letter with the actual proof that it is mine!@

Yes-- the agreement with my signature! with my SS number
with my last known address. That is proof.

What??? -- don't have it -- then do not call me!!

Don't call or bother anyone unless that you have something other than just a common name to go on.

That is just randomly calling people and making accusations.
That is what debt collectors do today -- And it is really annoying!

Oh -- and by the way -- they don't provide anyway for me to call them?? Now why is that!?? Don't you want your debitor to contact you? Isn't that exactly what you want? So why are you hiding??!@?

You just can't go around calling everybody with the same name as your debitor. You need something to collaborate the ID.

do not even think of asking for my info -- my previous addresses, my SS number, etc. JUST FORGET ABOUT THAT!


I should have recourse to sue all of you for your false accusations and worse yet -- taking up my time.

Hi, H. RegulationRoom is a platform to share your experiences and suggestions with CFPB regarding debt collection practices, and all users are invited to share their suggestions, but we ask that all stay away from ridicule or personal attack.

It sounds as though you have had a tough time with debt collectors and mis-identification, and if you would like to share your story and suggestions CFPB would be interested in hearing them here under making sure debt collectors and buyers have info about the debt or here under unlawful collection practices.

If you would like to pursue your situation further, you may consider submitting a complaint with CFPB directly, here.

I currently have an alias on my Credit report that I have NEVER gone by. I've disputed this serveral times and I can't get this alias and the related debt off my report. As such I want federal laws that REQUIRE an agency to produce some paperwork ,legal document that proves a consumer used that alias on a credit application/paperwork. When disputed with a CRA they should be requesting this information from the agencies as well. CRA's should be the neutral parties and be the enforcing agencies on both sides. CRA's should be mandated to report accurate information and be responsible to gather the accurate information. currently they are warehouses of bad information that err on the side of collectors. Consumers do not have a reliable agency fighting for their rights. without enforcement Federal laws equate to a bunch of useless words on a paper.

If a consumer states that he disputes the debt, the debt collector should immediately cease ALL collection activity until the debt is validated. And, by validation, it needs to be more than "the name and social security information matches the creditor's records. The validation process should include a clear and complete copy of ALL DOCUMENTS that create the alleged obligation. If none is available, then the debt should be cancelled. Period.

Welcome to RegulationRoom tommc4. CFPB would like to know what kind of additional information would help consumers recognize the debt, and recognize how much they owe. Keep in mind though, that requiring debt collectors to provide more documents will increase their costs, and these costs are often passed down to consumers. On the other hand, having more information is very important to consumers. Given this balance, what kinds of information do you think are the most essential? You can comment on CFPB's questions and ideas about the validation process here.

I think this proposal is completely unfair to the consumer. I am going to give you several scenarios/examples that hopefully convince you that current FCRA regulations have already given collection agencies way too much power over our credit. First, collection agencies are trying (in most cases) to collect on a debt that has already been written off by the creditor. While my state requires that the collection agency must be bonded in Texas, there is very little incentive for collection agencies to play by the rules. They have bought an account for pennies on the dollar. The burden of proof to prove the information contained in the account they purchased. The consumer is instead forced to provide evidence that the debt isn't theirs. How does one do this? How do I prove that the dentist charged me for a procedure I did not request or receive? It is MUCH EASIER for the the debt purchaser to supply the documentation that proves the debt is valid. If their collection is legitimate, their file will contain enough information to prove that the collection is for a specific amount and is unpaid by the consumer in question. They will have cancelled checks in the alleged debtors name, the debtor's signature on the original contract, a payment history from bank accounts in the name of the debtor. They will have x-rays that show Tooth Number XX had a root canal. They will have proof that an inquiry was made on the consumer's credit report on the day the account was open, and they will have an address that was used to send statements, credit cards, communications they initiated.

What does the consumer have? Nothing. It is counterproductive and completely contradictory to suggest a consumer should have a file of information to send to a collection agency proving they didn't open an account or agree to a treatment, considering the consumer did not know the collection even existed until they start receiving phone calls. If a collection agency isn't able to provide the CONSUMER with enough information that proves the account belongs to them, then it is the collection agency's loss, not the consumers. Collection agencies make money collecting money on accounts that have been charged off, meaning the creditor has written it off as a loss. If the collection agency cannot prove with enough evidence to convince a person of average intelligence that an account is correct and that it is the consumer's responsibility to pay the debt, then it should be deleted. There needs to be a "means test" implemented that will outline what criteria must be on file with the collection agency that will prove its validity. This is not simply a name, address and social security number. They must be able to PROVE Consumer A had an account with the original creditor that resulted in a charge off. If they cannot, the collection must be permanently deleted from all consumers credit files. If the law gives the right for a collection agency to purchase a debt for less than the consumer himself would have been allowed to settle with, then the collection agency better keep EXTREMELY accurate filed and enough information to back it up. The consumer shouldn't be required to do anything but demand a copy of the documentation and to initiate the investigation. Nothing else.

Answer to 1) what kind of consumer contacts do debt collectors... disputing the debt.
That presumes they actually follow the law and do a validation investigation. That is wrong, they do not.
I sent a letter to a company claiming I owed a debt and I was clear I was disputing the debt. A clear, declaratory sentence. I mailed it to the address listed. There was NO PERSON who signed this letter to me. I had to send it to To Whom It Concerned. But it was clear I was disputing the debt. I did so within two weeks, well within the 30 days. Yet they did nothing but wait 30 days and send me a letter saying "here is the info you requested."
It contained nothing I recognized.
You are presuming they are actually validating. This is the biggest mistake. They do none of that.
Any rule that defines what qualifies as a dispute would help. The clearer, the better. The vagueness now has led to abuses. Such as "frivolous and irrelevant" disputes. That is a license to abuse consumers.

Thank you for your comment, gmt512. What kinds of consumer actions should be included in the definition of dispute to clearly show what qualifies?

If you want to instantly level the playing field, make any credit card debt above and beyond the moment of default, disputable. Disputability of any amount over the amount at the moment of default would instantly get both the credit card companies and the debt collectors working with the consumer on a reasonable plan going forward, no? As it stands now, credit card companies can and usually do jump the interest rate up to as high as 29.9% and may even let the account stay in default as they rack up frequent default points on the debtor. When I gave up my regional emmy award winning video business to become a caregiver for both of my parents, eventually savings ran out and I notified each of my credit card vendors ahead of any default. NONE could offer me anything other than, "pay your bill on time". If instead the credit card companies know that once the default occurs they cannot accrue any more penalties, fees or interest rate charges on the debt, they will bend over backwards to work with the alleged defaulter to get them to pay down the debt. Citibank rate jacked my never late payment 15 year old credit card account by 5,000 dollars. I dispute that amount of excess in lieu of why I had to default, but Citibank does not care, nor does the debt collector. The amount of the debt reverted to what it was at the time of the default, you can bet citibank would be working hard to work with me.

The very last sentence, I left out the word "IF" at the beginning of the sentence. Should read..."If the amount of the debt reverted back to what it was at the time of the default, you can bet citibank would be working hard to work with me".

I have a 20 year plus debt. A couple of times I have refinanced and payed everything on my credit report. They never appear until it's over. Every year they get a judgement against me and freeze my bank account putting me behind on my bills

Hello tankheadsr, thanks for joining us on RegulationRoom. This sounds like a frustrating situation and CFPB wants to hear about these types of experiences with debt collection. What do you mean when you say “they never appear until it’s over?” Could you give some of the details about your specific situation?

What I mean is I have had my credit report cleared three times they were never on either of them. And when i think I have cleared all of my crediters they get a judgement and freeze my account.

Thanks for your response tankheadsr, that sounds like a frustrating situation. If you haven't done so already, you may want to file a complaint on CFPB's website. CFPB also has sample letters that you might find helpful.

If you have a standing complaint with a company's mishandling of your account and/or complaints with any federally recognized oversight bureau, like CFPB, a company should be required to resolve the dispute before prosecuting what they define as a breach of debt.

Banks and companies should not be allowed to try to prosecute over "missed" payments that were erroneously processed by them. Especially when evidence has been provided to the contrary and disputes are on file.

Continuing to place the burden of proof on the consumer is onerous and prohibitive for many consumers. I personally had a problem with a mortgage company and the amount of my time it took to get the problem resolved was worth 20% of the original principal amount. If a consumer complaint is on file, the company should be burdened with disproving the consumer complaint before prosecuting. They have both the financial and personnel resources to do so, whereas a consumer usually does not. Otherwise, why wouldn't they continue to bully and defraud consumers to boost bottom line profits?

Welcome to RegulationRoom, michellem. Thank you for sharing your comments. CFPB wants to know whether there should be a federal rule that defines "dispute." You mention filing a complaint with the collector and filing a complaint with a federally recognized oversight bureau as two consumer actions that are "disputing" the debt. Are there other kinds of consumer actions that should be included?

Enlisting the help of an attorney or other intermediary should also be considered a dispute. I had both my attorney and my financial advisor contact my lender. Emails, phone calls and letters all constitute disputes.

I think somehow it should be taken into account that a consumer may not know the specific cause of the dispute but they may know that the end result is wrong.

Here's my example to help define this. I knew I had made "x" number of principal payments on my loan and my lender claimed I had made "y" number of principal payments. I had emails and cancelled checks supporting the "x" number of payments and the history from my issuing bank also supported my case and dates.

My lender refused to investigate, saying they had done everything just as I asked and I had instructed them to apply "y" number of payments to principal. They had no documentation to back up this assertion (their documentation was just a statement of how they processed my payments, not any of my direction). In order to get my situation fixed, I had to find the specific payment the lender misapplied from their own records, which were a mess due to the amount of errors they had made. This was not an easy task, as it was time consuming and the lenders records were not exactly layperson friendly reading.

A couple of things... the average joe may not be able to read an institution's financial recordkeeping. Also, how much must be done to constitute "proof"? In my case, my bank's history, cancelled checks and emails were all sufficient proof to my mind and the extent of consumer responsibility. At that point, the institution needed to justify their claim beyond "we did what you told us to do" and to provide proof of exactly that.

One other dispute action - submitting an online payment and having a confirmation email and/or screenshot noting the payment amount and date the payment was submitted also constitute a dispute in the event the payment is not processed according to this direction.

Our office throws a wide net around "disputes". This is largely a hard one to define because it can take very specific and individual forms. Generally, however, the type of disputes we see center around when a debt buyer has purchased the debt and the consumer does not recognize the name of the debt buyer, they may generally state they don't owe the debt (with no further reasoning as to why not) or they don't owe as much as is being sought. Additionally, there may be claims of fraud or payment. Our office conservatively accepts verbal disputes as well as written. I think the greater issue is not what is considered a dispute, but how does a collector validate the debt? Many consumers ask for incredibly specific items. There is a poor form letter that floats around the internet that many consumers find and use, in which the consumer requests verification not validation, whatever the difference in that may be, then demands specific information be provided. I say this because then I believe many consumers feel each of those requested items must then be provided, when in fact the FDCPA is silent to the issue as to what proper verification is. I will leave that for another post, though my thought there will be defining what is verification will prove to be a difficult task as you can't be so defined that the various types of creditors cannot possibly provide the information sought or so loosely defined that there is load of litigation needed to define it.

We instruct our collectors to treat EVERY dispute the same--whether received in writing or over the phone and without regard to when it was received. Therefore, I agree that debtors should provide the information referenced in FCRA. The problem with FCRA disputes is the E-Oscar system that only affords the collector a couple options like "account information is accurate as of date reported"???? this doesn't even make sense as a response to the info provided by the debtor. If E-Oscar is going to be a valid "dispute" under FDCPA, that website needs some serious updating including making sure that disputes actually contain the information listed in CFR 1022.43(d) and allowing collectors to transmit the actual contract/itemized statements/etc back to the debtor.

It seems to me that the system must provide a series of 'handshakes': When a dispute is initiated; when the dispue is resolved; or when a dispute is withdrawn. In each case the consumer must know with certainty that the collector acknowledges the consumer's position and that the CRA has been properly notified.

The CRA must be party to the handshake, It is unacceptable that consumer's complaints can laguish for months with the consumer having no way to determine whether the CRA has received updated information from the collector or whether the CRA is taking unduly long to process the update.

Welcome back, Daves. Could you tell us more about the idea of requiring a series of handshakes? CFPB is interested in what information needs to be given to consumers (see the validation notice send to consumers) and how notices should be sent (see questions about emailing, texting and social media). How do you think the "handshake" communications would best be accomplished?

There needs to be rules around how disputes are handled for people with the same or similar names. There needs to be a process for disputing incorrect information on a credit report as well as for handling mistaken identity with the courts.

I have dealt with the issue of disputes and when you file a dispute and it as been closed it is placed in the comment section that you have filed a dispute. By doing this, this has kept me from refinancing my home just because the word dispute was there. The mortgage company said I had to have this removed, so I filed another form to ask for this to be removed it never was. I believe that once the dispute has been closed there should be no indication that there was a dispute filed. You again get penalized for trying to correct mistakes on your report.

Another issue that has come up regarding when an account has been charged off or in my case a repossession of a vehicle I had turn over due to not being released by my doctor to go back to work and my disability ran out , I had no other choice but to hand the vehicle over. then 6 years later I received a 1099 for over $6000.00. Why are consumers having to claim this as income when the company 1 wrote this off 2 retrieved the vehicle and sold it and the IRS is going off of what the company claims I have no record of what the sale of the vehicle went for. Plus the 16% interest they charged me for 4 years.
We keep paying these high interest rates but yet we still have to pay for our credit scores and only receive one free report a year, If we are trying to stay on top of credit fraud and inaccurate information that is not of our doing but from reporting agencies , these agencies should be putting more funds in for these things.

Another thing when these debts are being sold and resold and resold to where you may show up with 1,2,3,4,5, or more accounts which are the same account but since it has been resold many times with different company names and different amounts so you have to some how piece this puzzle together and prove that they are one account and not several different ones. There needs to be some control over this and an account my be old past the 7 years and it looks currant just because it keeps being sold and they keep putting the date they acquired it not the original date of last activity.

Hi rtorres, welcome to RegulationRoom and thanks for the comment. The CFPB is concerned about consumers being confused when their debt is sold, and wants to hear more about these experiences. Would it be possible for you to tell us more about your experiences having your debt resold? You can comment on what CFPB has to say about this issue on the subtopic "Notice that the debt has been sold".

Why are all defaults created equal? If Person A owes 30,000 dollars but has actually paid back 30,000 in interest rate charges plus 50,000 in principal payments on long time revolving debt, while Person B owes 30,000 and has paid back 30,000 in principal payments but only 5,000 in interest rate charges, why are the two people treated the same in court if they both default?

Why aren't people who paid off significantly more in interest rate charges over the years given no break of any kind if a default occurs? The more one pays in interest rate charges, the more likely they are to one day default and the more profit they have allowed the credit card company to have.

Having been recently included for free credit checking, after the Target identity theft issue, I checked my credit with Experian and found a $9,924 "collection" on my credit report, resulting in a 610 FICO score! I had never heard of Portfolio Recovery, a company located in Virginia. I immediately wrote to the Office of Consumer Affairs in Virginia, detailing what this erroneous addition to my credit report had done to my overall score and my ability to maintain good credit. ALL of my credit cards lowered my limits, but I thought that had been in response to the ongoing bank investigations and the banks way of getting back at consumers. It all made sense when I saw this entry. What shocked, alarmed and enraged me most is that Experian excepted this "collection" entry without documentation. I can assure you that none exists. However, I have been a victim of lost wallets and identity theft within the last 20 years and may have seemed a legitimate target to Bottom-feeder agencies like Portfolio Recovery (the Internet is rife with consumer complaints about their tactics and illegal practices attempting to collect "debts!") I intend to pursue this matter by informing our Attorney General Kamala Harris and am grateful that you are targeting an otherwise unassailable lobby. Anytime a consumer writes to a credit reporting agency, the letter winds up in Mumbai, is laughed at and never acted upon. Experian, TransUnion and Equifax should undergo a Congressional investigation, during which their anti-consumer orientation and fraudulent reporting will be noted, as well as the impossibility of restoring a former 810 FICO, once scumbags like Portfolio Recovery have been allowed clear access to ruin the credit score and compromise the professional life and earning potential of millions of consumers.

Welcome to RegulationRoom, Chris Marx. I'm sorry to hear that you had a difficult experience. Even though this CFPB proposal is about debt collection practices rather than credit reporting, the issues you raised are important and CFPB wants to hear more from consumers like you. What kind of information do you think collectors should have to give CRAs, to make sure the information they have is accurate?

3|How should collectors investigate and "verify" the debt? - 38

Agency Proposal

If a consumer properly disputes the debt, the collector has to get “verification of the debt” and send that (or a copy of a court judgment on the debt) to the consumer (FDCPA § 809(b)). But, the law doesn’t say what, if anything, the collector has to do to investigate the dispute. And it doesn’t say what “verifying” the debt means.

Some people are concerned that collectors don't do much more than double-check that the amount in the validation notice is what the creditor says the consumer owes. The FTC thinks the collector should have to do a “reasonable” investigation. (See the 2009 FTC Modernization Report, p. 33.) To decide whether this, or something else, should be the new federal rule, CFPB wants to know:

  • How often are disputes actually investigated? What percentage of investigations find errors? Do collectors try to get more information from the consumer, or the original creditor, or anyone else – or do they just double-check what they told the consumer against what they already have in their files? Does the amount of investigation depend on the type of debt?
  • Would requiring “reasonable” investigation be the best rule for consumers? for collectors? or should specific actions be spelled out (for example, review account-specific documents? or consider the number and kinds of disputes they are getting about a group of debts)?
  • Would a "reasonable" investigation be different depending on the kind of dispute (for example, wrong amount vs. wrong person) or the type of debt (for example, credit card vs. car loan)?

Try to be as specific as possible about what reasonable investigation would involve in various common dispute scenarios.

Collectors that report information to CRAs are already required by a different law, the Fair Credit Reporting Act (FCRA) to conduct a “reasonable” investigation when the consumer disputes that information (Regulation V 12 CFR 1022.43(e)) . How well does this work now? Do collectors who have to conduct reasonable investigations under the FCRA treat other consumer disputes the same way even when a CRA report isn't involved?

Under the FCRA, collectors don’t have to investigate disputes that are “frivolous and irrelevant.” This could be because the consumer doesn't provide enough information to investigate the dispute or the dispute is the same as one already investigated (15 USC 1681(a)(8)(F)).

  • How do collectors now handle repeat disputes or disputes that are unclear or incomplete? Is there any information on many of these kinds of disputes collectors get?
  • Should a new federal rule to investigate other kinds of consumer disputes include a "frivolous and irrelevant" exception?

According to the FTC, some collectors "verify" the debt by just telling the consumer that the amount is what the creditor claims. (See the 2009 FTC Modernization Report.)

  • Is this what happens most of the time, or do collectors generally send consumers some documentation to show that the collector's information is correct?
  • Should there be a new federal rule that spells out how debts must be verified? What steps would help consumers without costing collectors too much? For example, would sending a copy of the last billing or periodic statement from the account be enough to resolve most disputes?

Related topic: The "validation notice" sent to the consumer—Info about the amount owed.

Now, the collector has to stop collection efforts until it verifies the debt--but only for disputes in writing sent within 30 days of when the consumer gets the validation notice (FDCPA § 809(b)). What do collectors do now when a consumer waits more than 30 days to dispute the debt? What would be the costs, and the benefits, of requiring collectors to investigate and verify even if the dispute comes after the 30-day period?

Finally, should federal law set a time period by which the collector has to respond to a dispute? Since the collector must stop trying to collect until the debt is verified, is that enough incentive to give a quick response? How long does it usually take to investigate and verify a dispute?

Read what CFPB says in the ANPRM about and Investigation of Disputed Debts, Verification of Disputed Debts and Timing.


Commenting is now closed.

go back to the original debt. and stop buying them to make a quick dollar.

As a consumer who has had Identity Fraud, Telecommunications Debt Error, Mortgage Reporting Errors, I know a lot about this subject, the time it takes to remove and lies the corporations tell to credit bureaus. Simply allowing the credit bureaus to accept "name, social security and address" as the only "verification and validation" is incorrect. With Identity Fraud, it is easy to have anyone's personal information. If a mortgage company is reporting a "foreclosure" and cannot produce the Lawsuit, Case Number, and Sale of the property, they should not be allowed to report a foreclosure. A foreclosure is a legal process which begins with a lawsuit and ends with the sale of property or a voluntary dismissal. If a voluntary dismissal is signed by a Judge, the foreclosure should not be listed. Also, Loan Modification reporting should not include refinancing of loans which are only for the purposes of reducing an interest rate.

Credit Bureaus should be forced to have the actual documents in their possession before they can report ANY information. Otherwise, they too should be responsible for misinformation and lies. This should be a monetary compensation of more than $10,000 per incident.

Welcome to Regulation Room JCSimpson, thank you for sharing your story. CFPB wants to know what information is most important for collectors and consumers to have so that problems like the ones you experienced will be less common. The agency has specific question about what information, for example, should be in validation notices. Would you look at what CFPB said and share whether you think that kind of information would have been helpful for you?

If the consumer claims identity theft then the Debt collectors should be required to prove otherwise. The CRAs should be forbidden to report any debt that has been disputed as Identity theft unless they can provide court admissible proof that it is a valid debt. The CRAs should be held more accountable and heavily fined for reporting erroneous information. Their fines should be paid directly to the consumer for the countless hours they spend trying to fix their credit reports. The CRAs should be required to send a letter to the consumer's insurance companies, mortgage companies, and anyone else that charged the consumer a higher rate based on their erroneous credit score and find out how much their error costs the consumer. The sum of those added costs should be paid by the CRAs directly to the consumer in addition to the fines. The burden of proof should fall on the CRAs and the debt collectors, not the consumer.

Some people are concerned that collectors don't do much more than doublecheck that the amount in the validation notice is what the creditor says the consumer owes. THAT'S ALL THEY DO.

They never do anything of substance to actually push back on the creditor's claims. I've had actual documentation that disputes creditor's claims, and all collectors do is rely on the information given them to by creditors. The CFPB is no better. My experience with them was much the same as dealing with a collector. The CFPB did nothing to verify or investigate the creditor's claims; they simply took the creditor's claims as outright facts despite conflicting documentation.

Consumers should not be allowed to dispute a debt using identity theft as a reason without proof as well. Otherwise some consumers will "game" the system and make false disputes.

I would like to see the time frame for validation change. I, as a consumer, have 30 days from the date of the letter to dispute the debt, however, the collection agency can take as long as they want, even years, to get back to the consumer. This practice is not only bad but some charge interest on the debt, even though they don't call it that (fee's???), all the time they are 'looking into it". If I have 30 day's they should have the same time frame to get back to me, period.

Hi, and welcome to RegulationRoom, Evil Empire 58. Would you like to set a limit on the amount of time the debt collector has to respond, such as the same amount of time that the debtor has or slightly longer given the number of requests they process? Would extending the amount of time that the consumer has to respond be a good alternative?

After offering documentation that I didn't owe a debt, the collection company ignored what I offered as proof and continued to try to collect the debt - even stated they didn't care that I didn't owe it. They should be required to investigate and respond in writing to a consumer's defense, so a follow up can be made, or complaint filed with a governmental agency. Documentation should also follow the claim as collection companies sell their lists to new companies. Better, no documented defense of a claim should be eligible for sale until resolved.

Welcome to RegulationRoom, dorysailor, and thanks for your comment and suggestions. CFPB is wondering if a “reasonable investigation” would be different depending on the kind of dispute. Could share more details about your dispute with the debt collector?

Debt collection companies abuse this, and make it a catch-22 for people who dispute the debt. I have written dispute letters four times in the past three years. They 1) deliberately use a post office box so you can't send it certified, 2) ignore the dispute letter and act like you never said a thing 3) if you send it certified, nobody signs, or the signature is illegible. In about 99.9 percent of these cases these debt collection companies always fail to acknowledge the dispute. It is one of their main abuses. You can't even GET to the point of getting them to acknowledge you dispute it. I'll bet you won't find a person here who has disputed a debt -- a debt that was NOT theirs -- and ever found a collection company make a good faith, honorable verification to see if they have the correct person. I agree with the person beneath my box, dorysailor, that no documented defense of a claim should be eligible for sale until resolved.
I go further: every "notice of debt collection" letter MUST be signed by a person who actually is an employee, one who is more than just a warm body who answers the phone, and they must use a physical address and if they fail to acknowledge a disputed debt, face fines. Maybe they'll stop abusing this crucial first step.

Disputes are not investigated. That is a joke. Sending out a letter to whoever these debt collectors think is responsible for the debt is just rote -- it is not done in good faith or follow the letter of the law. They 1) use vague names, no signature, post office boxes, a million aliases for their debt collection business (THAT practice has to stop). The FTC says "reasonable" investigation but these companies do none, and that is the standard practice. A good start is having a realistic and fair and honest laws requiring the companies to verify debt without already having assumptions or worse, not caring if they have the right person or not. Any rule change needs to carry some penalty or it won't have any impact on an industry that has run roughshod over consumers now for two decades. Abuses abound.
There also should be special requirements for validating medical debt because of privacy rights. There seems to be no concern of violating people's privacy when it comes to medical debt collection activities.

You are making an assumption that most collection companies actually validate debt. First, that is THE problem. There is none. They send out a letter with vague name, post office box, no individual assigned to the account, use many aliases for the collection company names. I wrote back when I received one such letter and did so within the 30 day time frame. My letter was ignored, twisted around -- the response (coming 30 days later) said "here is the info you requested!" Their arrogance precedes them. To make any meaningful change, this chance to dispute the debt needs to be real, and not treated like a joke. Require the use of a physical address, no post office boxes, require these letters be signed so people can respond to a person with a certified letter.
Require more than just the company telling the debt collectors that Joe Blow owes me X amount of money -- it has to be real and provable and should be itemized.
The law is vague, and this is the first problem. Spell it out what these companies MUST do to validate debt and put teeth into it. It won't work if it's just meaningless words on paper because there are a lot of rules too many debt collection companies ignore.
Requiring debt validation, good faith, serious validation should be the same for all debt. Why would anyone distinguish? Having a debt collection company harassing you for a debt that isn't yours is just as bad no matter what they say the debt is for.
I also think the few laws there are now are slanted to allow debt collection companies to avoid doing even the basics that should be considered good business practices, such as MAKING SURE YOU HAVE THE RIGHT PERSON.
It is an outrage that under the FCRA, collectors don't have to investigate dispute that are "frivolous and irrelevent." My God. These are companies who have abused people for too long and in ways unimaginable. With language and an attitude like that, no wonder these companies have gotten away with so much.
Last, the FTC, the FCRA, the Consumer Protection Act -- all of them -- should do something about this horrible thing that lets the credit reporting agencies off the hook for reporting inaccurate information. I had inaccurate listing on one, and it wasn't my debt and I proved it but when I first called, I got from all "we only report what they tell us" blah blah I was livid. That is putting the fox in charge of the hen house. I had to get the doctor's manager to write a letter to the collection agency (which he did and very quickly) that I was not the person. Then THAT had to be mailed to this obnoxious company that ignored my dispute and request they validate, they completely ignored everything. When they got that letter from the doctor's office, they grudgingly took it off, and instead of A LETTER OF APOLOGY, THEY SENT ME A LETTER SAYING TO THE EFFECT WE ARE REMOVING THIS BUT WE WILL PUT IT BACK ON IF ANYONE ELSE COMPLAINS.
Please. I had no debt, they had the wrong person, they put it on MY CREDIT REPORTS AND THAT WAS THEIR ARROGANT ATTITUDE.
Then I had to sent the letter to the credit reporting agencies who just removed it didn't apologize.
This is no small thing. This can take up tremendous amount of time, you are not treated well even when it is abundantly clear they made a mistake and had the wrong person. So you need to start changing attitudes. This entire process has become anti-consumer. If that company had done its job in the first place, they would have verified it was not my debt. But they added insult to injury.
The ONLY way to get that attitude and actions changed it to put some muscle behind it with BOTH the debt collection companies AND the credit reporting agencies. I hope this comes to something, because what this has evolved into is a big money business there are law first that this is all they do, "debt collections" because they just harass and expend no time verifying.
Yes, the new federal rule should just get rid of any "frivolous and irrelevant" exception because it is so prone to abuse. It is offensive.

Welcome gmt512. RegulationRoom provides an environment where people can learn about important agency proposals and discuss them in ways that help the agency make a better decision. CFPB needs to know not only what the problems are, but what the solutions should be and why.

Everyone who comments on the site is expected to remain civil and respectful. We respectfully ask that you stop using all capitals in your replies, as this is akin to shouting online.

With that said, thank you for sharing your story. What do you think of the proposal to require a "reasonable" investigation after a dispute? Would requiring “reasonable” investigations be the best rule for consumers or should specific actions be spelled out?

Well I do want to shout. You've never been on the receiving end of a collections company that treats people like cattle with dollar signs on them, whether they owe money or not. And it's been going on for years. Shame that is the first comment to make to me.

Hi gmt512. The story you shared sounds very frustrating. CFPB has a complaint submission process that may be helpful to you. You can file a complaint and learn more about that process, here.

Verifying the debt by the collector is a must.

I had an instance where the bill was sent to wrong address. After 6 months I got a call reg the debt. They mentioned only the amount and the service provider.when service provider was contacted they said already it is on collection and we're not helpful.i asked them to send the
Bill to pay it off.
Only more calls from collector started. After almost 6/7 requests to the collector the bill detail was sent . On verification with my bank statement I found out that the amount had been paid.
When confronted both the collector and service provider did not bother to apologize for the mistake.
It is a case of non verification.

Thank you for sharing your story, Csramesh. Right now, federal law doesn't tell collectors what they must do to investigate and verify a disputed debt. CFPB wants to know what kind of rule would help consumers and collectors resolve disputes. In your case, what do you think debt collectors should have done to verify the debt?

For over 3 years I have been contacted by debt collectors for an alleged debt. I diligently send proof of payment and am ignored, and several months later a new firm sends the same letter re the same debt. The collector never responds, investigates or verifies the dispute. They should be forced to do so.

Hi, hsward. Thank you for your comment, and welcome to RegulationRoom. CFPB is looking to find out more about consumers' experiences with debt collection. Can you share more details about what happened? Have you talked to the original creditor?

As I have had many accounts in collection due to an identity theft, I have several different experiences with the "validation" process. My belief is that there is no rule defining exactly what documentation constitutes validation. As we know, if we dispute with the CRA and ask for a reinvestigation, all that will be done is the social security number will be matched and verified with the amount owed. It is a useless tool and a waste of the consumer's time. Asking for validation with a collection agency is almost as useless. This is because current laws suggest that the collection agency provide the consumer with information "such as" the name and address of the original creditor, and the amount owed. This does not prove a debt is still owed, and to whom it is owed. If we are going to allow companies to buy debts for amounts as low as pennies on the dollar, then the burden of proof MUST lie with the collection agency. As they are in the business of collecting debts, they are given all information regarding payment history, original contracts, methods of prior payment, and all personal information relating to the consumer. For far too long the consumer has been at the mercy of the collection agency. We are forced to send proof of our identity, current mailing address, phone number, etc. as well as all documentation we have regarding the account that would show an error has been made. But why? The collection agency has this information readily available. And if they do not, the account should be permanently deleted. If the collection agency cannot produce documentation from the original creditor including (1)a contract (2)payment history from original creditor if any (3)proper identification of the consumer (4)proof of purchase of the debt (5)proof they are legally able to collect on the debt in the consumer's state-then there should be laws in place that prevent the debt from being reported. In most cases, it is being reported from the original creditor already. And if it isn't, this should be a red flag to CRA's that the debt is not valid. Collection agencies must be able to show proof that a collection notice was sent, and they should be required to provide the same proof a consumer must provide to prove a dispute was sent (CMRR). If it is required of the consumer, it should be required of all. A debt should be considered validated only when all of these conditions have been met. Without these safeguards, a consumer could end up paying a debt they do not owe. It happens all the time. How many stories have you heard of collection agencies voluntarily providing any information to a consumer before demanding money? They don't. Enough is enough. Take the burden of proof off the consumer and place it with the party that legally owns the debt.

Many disputes are difficult to investigate because it is unclear what the consumer's dispute actually is. If the consumer is specific enough so that there is a clear item to research, we will do so. However, its a vague dispute such as "I dispute this debt" or "I don't owe this debt" (which is incredibly common), then we will provide statements or a contract to attempt to address it. The amount of the investigation is largely lead by the amount of detail the consumer relays, and most of it results in us relying on the documentation the creditor provides to resolve the dispute. Sometimes we may need to ask the creditor to research their records for indication of X, Y, or Z, but most the time the dispute isn't that specific. I find in my practice that we will often ask a consumer to provide information to support their dispute (such as proof of payment), but then the consumer does not provide it, and we are stuck in our efforts to investigate further. Requiring only a "reasonable" investigation without further definition sounds like a punt to the courts to decide the defintion after a lot of litigation. I think at least a broad definition of obtaining documentation to support the position that consumer owes the debt/amount/and creditor is a good place to start. I would love to see consumers use a form letter prepared by the CFPB which spells out a variety of disputes and helps them articulate the dispute better.

I do think one of the toughest hurdles for a collector (and one of the biggest complaints from persons against whom collection efforts are made) is when they get a person that states the debt is not theirs (but someone else's ) with the same name. We do our homework on our end to investigate (we'll attempt to compare the last 4 digits of the social, we may run a skip trace to see if party we contacted lived at the address on the statements, etc) and we will provide verification, but in a mobile world investigating that the John Smith you contacted is the same John Smith you are attempting to resolve a debt with can prove tricky. This is especially tricky if there is NEVER indication that we have reached the wrong person. We never wish to contact the wrong party regarding a debt, but it unfortunately happens because consumers don't always relay updated contacted information to creditors and a collector then has to rely upon the best information available to them. Unfortunately, I don't know what the fix is here. Despite the stories to the contrary, it simply is not the intent of any professional and responsible collection agency or firm to attempt collections from a party that does not owe the debt, but this is a hard one to address without good communication from the wrongly contacted party and the collector.

My concern about a "reasonable" investigation is that it is so subjective. It opens the collector up to an entirely new avenue of prosecution. It is unlikely that a consumer and collector are ever going to agree on what is "reasonable". As it stands now courts have steadfastly maintained that collectors are allowed to rely on information given to them by their clients: ie: a debt for an amount stated against consumer so and so. Beyond that the consumer and the collector have the ability to ask a third party, a judge, to make a determination. By all appearances the FTC and the CFPB would place this burden directly on the collector, with predictable results: more needless litigation over the process and less resolution regarding the debt itself.
One alternative might be for the rule to state a set formula for verification along with the proviso that if the collector follows it they are provided a safe harbor from litigation. However the myriad possibilities for reasonable investigation probably preclude anything so simple. In the end I think it is still a judges purvey to make the final determination.

Any FTC rule regarding verification should absolutely include an exception for frivolous and irrelevant disputes because there are way too many websites out there providing sample dispute letters and the advice to keep using them that the process is abused by enough debtors that we now have a standard letter to address this issue.

Thank you for admitting your illegal practices. This is exactly why we need the CFPB regulating debt collectors.

The CFPB should clarify whether "verify" means verify that you are a legitimate collection agency (not a scam) OR does it mean to prove the legitimacy of the account relative to the debtor's objections. If is the former, some basic information relative to the account--contract, itemized statements, or any other identifying information that only the creditor would have access to would suffice. If CFPB wants "verify" to answer every single objection a debtor can cook up, a collector could never move forward without spending hundreds of hours normally reserved for litigation.

As to a time frame on answering, I think the current system of stopping collection action until verification is provided is appropriate. Normally, sending the information to the debtor is not the hard part. Getting the info from the creditor and then circling back around to this particular account is what takes the time.

I don't think disputes should be limited to the first 30 days, but should be prohibited once suit has been filed. The Court rules and discovery process provide the debtor all the access to this information they could ever need or want and the provide this access under pretty strict penalties from the Court if the creditor/plaintiff does not provide the info requested.

The CFPB should absolutely adopt rules concerning substantiation of purported debts and, where a consumer timely disputes the existence or amount of a purported debt, alleged creditors and debt collectors should be prohibited from reporting any adverse information to CRAs about the debt and CRAs should be prohibited from including any adverse information on a consumer's credit report about the debt until after the debt collector or creditor obtains a final non-appealable judgment substantiating that the debt is in fact owed and the amount of the debt. Currently, debt collectors are attempting to collect upon purported debts and reporting negative information to CRAs based solely on assertions by creditors that a debt is owed. Further, the "verification" of a debt is usually nothing more than a piece of paper from the purported creditor stating the amount of the debt that the purported creditor asserts is owed. Even where the consumer has disputed the existence of the purported debt in light of, for example, legitimate legal defenses and counterclaims, the creditor or debt collector often times reports negative information to the CRAs thereby damaging the credit profile of the consumer. Although the FCRA requires that the CRA notate that the debt is disputed by the consumer, the damage to the consumer's credit standing is already complete as potential lenders and/or employers will see the negative information on the credit report and may take adverse action in connection with their lending or employment decisions based solely on the fact that negative information appears on the consumer's credit report. As a result, the threat of negative reporting by debt collectors to the CRAs can be highly coercive, unfair and deceptive in that a consumer may feel forced to pay a purported debt, even if the debt is legitimately and in good faith disputed, to avoid adverse information appearing on their credit report. I have recently personally encountered this exact situation after I became involved in a dispute with a property management company as to whether a lease termination fee was due under the terms of the lease for an apartment that I had vacated prior to the expiration of the lease. The property management company and I disagree as to whether the express terms of the lease require the payment of a lease termination fee. After I refused to pay the property management company for any lease termination fee, the property management company contacted a debt collector and asserted that I owed a debt notwithstanding that I have repeatedly disputed by notice to both the alleged creditor and the debt collector the existence of the debt under the express terms of the lease. The debt collector has proceeded to report negative information to the CRAs which has negative impacted my credit standing even though there exists a legitimate ongoing dispute as to whether the debt even exists in the first place. Further, the debt collector's "verification" of the debt was nothing more than an invoice from the property management company indicating the amount that the property management company asserts is owed. Under circumstances where a consumer timely disputes the existence of a debt or the amount of the debt, creditors and debt collectors should be prohibited from reporting adverse information to CRAs and CRAs should be prohibited from including adverse information on a consumer's credit report about the purported debt until the creditor or debt collector obtains a final non-appealable judgment so as to avoid the highly coercive, unfair and deceptive consequences to consumers. Further, a "verified" or "substantiated" debt should not be deemed to exist until a final non-appealable judgment is obtained under circumstances where the consumer timely disputes the existence or amount of debt. Such a rule would ensure that creditors and debt collectors only pursue litigation for debts they believe actually exist and avoids adverse impacts to consumers prior to the time the debt is verified and substantiated by a final non-appealable order of a court of competent jurisdiction.

Credit bureaus are responsible for 95% of identity theft and inaccurate consumer credit files. It's because their revenue comes from businesses who pay for access to their databases including phony ones. I have a letter from a credit bureau that says the only thing they do to investigate/verify accuracy is ask the entity that initially reported the information if it's true. New rules have to put tighter restrictions and procedures on credit bureaus because they are the root of the actual problem. Secondly, because they are private companies who should not be able to collect or retain any financial information without consumers permission. Submission of proof of debt or other evidence/documents should be required. Retention of the identity of the actual [business] persons reporting the account information should be required. Credit bureaus and debt collectors should not be allowed to sell lists of accounts especially after the accounts are disputed. One creditor, one debt collector. All debt collectors should be required to register on a national database, including phone numbers, that's publicly available online which they must update within 5 business days regarding any changes. All lawyers should not be banned from becoming debt collectors. Here is a a group of people that are trained, licensed in their State, but they lie to circumvent the law and the courts. At the heart of the mortgage fiasco were unethical lawyers who acted strictly for greed. None of them were prosecuted or disbarred because they hid themselves as representing lenders.

Correction to my first comment. I meant to say, "all lawyers should be banned from being debt collectors." They are unethical and work strictly out of greed to circumvent the laws that are supposed to protect consumers. Verification of debts should require the creditor to provide written proof of the initial debt instrument with the consumers' signature. There should be a notarized statement of authenticity along with it. This gives a consumer the documents to file a civil suit for fraud, if needed.

Welcome to RegulationRoom, beforejava. At this stage, CFPB is looking for more information from consumers and responsible debt collectors about the problems they are having. As CFPB moves to the next stage (coming up with specific proposals for new rules), it will be carefully considering what commenters say here. Federal law also requires the agency to weigh costs and benefits in any rules it might make, so we would welcome any detail you can add about your personal experiences and the reasons for your suggestions.

Would it help consumers if there was more information in the validation notice, so they can tell whether an account is accurate before having to dispute it? CFPB has specific ideas and questions about how validation notices can give consumers the information they need. We hope you will visit the topic page on the "validation notice" sent to consumers and tell us what you think would help and why.

New rules should allow consumers to resolve, discuss, or negotiate the matter strictly with the creditor. In other words, consumers should be told that they can refuse to speak to debt collectors about their account(s).

I have had several doctor/laboratory debts placed on my credit report. These are debts that I never rec'd a bill for or even a phone call from the hospital or facility. I have very good health insurance that paid over $14k when I had my baby...3 months go by and I start getting notified by my credit monitoring agency that my credit score is going down. Why? things such as a (pediatric audiology test $83) when my baby was 1 day old. apparently the audiologist doesnt bill through the hospital....subsequently, they also dont bill the patients..they outsource their billing to a 3rd party collection agency who immediately reports it to all 3 credit bureaus. Maybe i missed that forumn on this sight, but what about further regulating the credit reporting agencies that can destroy your credit without any proof. A company can send a $100 bill to Transunion and say I owe it, and credit score takes a 10 point dive.
Agencies should not be able to put something on your credit report without first having not only validated the debt and provided any and all documents that prove you owe the debt, but they must be required to have attempted to collect the debt. I have had businesses tell em that its cheaper to put the bill directly on your credit report than it is to hire a 3rd party to collect the debt. This is a horrible injustice to the people who pay their bills, maintain health iunsurance and who will pay their outstanding debts. The system is set up to force the consumer to prove their innocence (if you will) verus the creditor proving they are owed a debt.

Some years ago, a debt collector was trying to collect a debt for an emergency room visit that included foot/leg xrays. The problem was that the only time I had ever been to the hospital in question was a worker's compensation covered workplace injury and it involved only my hand (sliced open, six stitches). I had contacted the collection agency and informed them that I did not owe anything and the circumstances of the visit. Although that did not work, once I contacted all three credit bureaus with the same information, the debt collector was unable to verify the debt and they removed it from my credit report - and stopped contacting me.

From 1999 - 2004 I worked on a number of online identity authentication initiatives. At that time the only available solution was to ask "out of wallet" questions based on the consumer's credit file.

For example, the credit report might show that the consumer lived on Elm Street 20 years ago. Since an old address would not be easy to find (e.g. in a lost wallet) the idea is that if the consumer knows that they lived on Elm Street 20 years ago, there is greater confidence that this is indeed the person that they claim to be.

The problem with this approach is that the information in credit reports has a reliability problem. Reports indicating low error rates are misleading: they only look to "material errors" and they are often funded by credit industry groups.

If it is commonly accepted that credit reports are filled with errors - then it is incumbent upon collectors to validate and verify the debt prior to pulling a credit report or contacting the consumer.

I agree with MER. I have experience as a debtor, pro-bono attorney and debt collector. You can't expect collectors to be judge or jury. The cease communication right is meant to to force the collector to sue or go away.

I believe reasonable will depend on the circumstance of the dispute and the type of debt. A formal checklist should be created for various scenarios and the analyst reviewing the dispute should be able to enter comments against the checklist which would be part of the eoscar transcript.

There should be clear guidelines on what constitutes "irrelevant and frivolous". In my own experience, the CRA's consistently refused to delete trade lines not belonging to me even when I had provided documentation from the original creditor validating the debt was not mine. They falsely claimed they received additional information from the original creditor that superseded the documentation I had. When I circled back to the original creditor, I had learned the debt was sold to a junk debt buyer which leads to a separate issue. If the junk debt buyer is reporting to a credit reporting agency, why are they misrepresenting themselves as the original creditor. Junk Debt buying should be prohibited all together. The original creditors should know their vendors just as the law mandates they know their customers. If the vendor is violating the law on the original creditor's behalf the original creditor should hold responsibility to some extent.

Here's what the federal government laws should mandate how the collection companies and CRAs should investigate disputes(1) All collection actions and reporting actions should stop immediately.(2) The time line should be equal on the consumer,collection company,CRAs reporting period.(3) The original debt owner or collection company that purchase the account, should produce the original copy of the signed contract, court documents, and any verifiable records relating to the dispute.Forward those documents to the disputing party within the set aside timeline.(4) Any and all verification letters would have to state and indicate such findings.(5) Once the dispute could not be verified by,name,social,signed document copy of original agreement, it should be immediately deleted. The collections companies and original debt owners are responsible for the validity of information they get,buy,receive,send or share.So, if they buy good or bad debt they should be held responsible. The number,types,unclear,clear,collections disputes should all be investigated the same

4|What should happen with unverified debts? - 16

Agency Proposal

According to the FTC, as many as half of disputed debts might not be verified (See the 2013 FTC Debt Buyer Report, p. 40). Some kinds of debts – medical, telecommunications and utility, debts more than 6 years old, debts bought from another debt buyer rather than the original creditor – are more likely not to be verified.

  • What do debt collectors do now when they can’t verify a debt? If the collector's investigation reveals errors or misrepresentations about the debt, do collectors usually report this to the consumer? How do they do that?
  • What, if anything, should a new federal rule require them to do?

Industry certification standards of the Debt Buyers Association prohibit selling a debt with an unresolved dispute.

  • How common is it for owners of unverified disputed debts to sell them? Or place them with new debt collectors? Or report them to a consumer reporting agency?
  • Should a new federal rule make debt sellers tell debt buyers or new collectors that a debt is disputed and unverified? Should the new buyer or collector have to verify the debt before starting collection?

Once the consumer disputes a debt, federal law (FCRA 15 USC 1681s-2(a)(3)) prohibits sending information about it to a consumer reporting agency without also saying that the consumer disputes it. But now, collectors don’t have to wait the 30 days before reporting the debt. This means the information might go to the CRA before the consumer has had time to dispute it. Should a new federal rule prohibit a collector from reporting information to a CRA during the 30-day window?

Read what CFPB says in the ANPRM about Reporting of Un-Validated Debts.


Commenting is now closed.

Suspend further action to collect or re-sell. Placing a rule that prohibits a collector from reporting information to a CRA during the 30 day window would be a nightmare from elm street and only cause more problems. Unresolved disputes should not be sold and should be removed from collection..Period.

Thanks, RBell. Could you provide more specific information about why prohibiting a collector from reporting information to a CRA during the 30 day window would be a nightmare?

RBell might have mistakenly written that. I endorse that NO disputed account should be eligible for inclusion in CRA reports.

My first experience with a debt collector was for a medical bill - which I had paid on receipt, nearly a year earlier - so I was very confused to receive a call from anyone suggesting that I was irresponsible. In the course of the conversation, when the caller was pressed to offer more detail, I recognized the circumstances, told the caller that it had been paid and was never even late. I think some unscrupulous person had sold this debt collector false information.

There should be a federal rule prohibiting collectors from reporting information to a CRA during the 30-day window.

There are automated processes in place with many collectors where they will generate 4 collection letters at one time, including the one where they tell you that they have reported you to a CRA. And then they will mail all those to letters (all dated on the same day) to you at the same time.

And this is done without any debt verification whatsoever.

I have a debt that is past NJ statued of limitation so I can not be taking to court over it. The collection agency calls me, I ask for verification they say they will send me a letter. I never receive letter, I never hear from them again. It is sold to a new agency, my credit score takes a hit. The cycle begins again. How is this fair to consumers. I could pay but I read nightmare stories of people who have to keep sending out copies that they paid to every new collection agency and CRA.

Welcome to Regulation Room, D.Davis, and thank you for sharing your experience. Was the CRA notified that the debt was disputed? What do you think of kathryn’s comment above that “no disputed account should be eligible for inclusion in CRA reports?” Because you've had experience trying to dispute a debt, you may want to read and comment above on what CFPB is saying about what should count as a dispute.

First, a third party collecting on behalf of a lender isn't, nor should be, defined as a furnisher of information. While the FDCPA requires notice specific to the validity of the debt, the FCRA has requirements for users of consumer reports. Combining two statue requirements in the initial notice of a debt serves no purpose. Sending during the 30 day notice would create confusion in the event the consumer responds, for example, to the validity of the debt and does not include a request about a credit report accuracy. I believe the issue is whether a third party debt collector or debt buyer should report an account to a credit reporting agency which would overlap the original lender's last report on the consumer account. In my opinion they should not. I have seen confusion due to lack of rule clarity. For example, if a consumer files a bankruptcy petition who should report that event? If a third party opts to report then the third party would be required to report events that take place during or after the bankruptcy filing. To date, Title 11 offers no direction to reporting and neither does the FCRA other than a credit reporting agency removing after 10 years.

"Verify" needs to be thoroughly defined. It should be no less than documented court admissible evidence that the consumer is responsible for the debt. If the debt collector cannot produce this evidence, he should be barred from reselling the debt or reporting it to the CRAs.

I strongly endore drose977's response. Currently, debt collection agencies can sell debt without proper validation. Or they can sell the debt if a consumer disputes the debt and the agency can't product the proper validation. These things should not be allowed and are very detrimental to the consumer. Consumers should be protected above collectors and other agencies as they, typically, have far less resources to fight inaccurate information. Additionally, the inaccurate information adversely effects consumers more than any other group in these situations.

Collectors should not be allowed to report a debt as 30 days late if the debt isn't 30 days late. The law should include stiff enforcable penalities to deter collectors from pre-dating debt. These rules should apply for any debt reported late at any time, not just the first 30 days.

If our client(s) can't provide any verification of the debt, we close the account and send the debtor a letter that we are doing so. Note: this has only happened once or twice in 20 years.

an unresolved dispute account should NOT be sold. If so, seller should be liable.

Currently, CRA's deny responsibility for "reporting" inaccurate information given to them. CRA's should be liable for both actual and punitive damages caused by "reporting" inaccurate information.

Hi phillipschaper, thank you for your input and welcome to RegulationRoom. It sounds like you have had personal experience with CRAs reporting inaccurate information -- could you share more details about this? What would help CRAs know when information is inaccurate?

In the section above, other commenters have talked about how disputes should be investigated and resolved. Would CFPB's suggestions, or those of other commenters, help solve the problem you identified?

Question: How often are accounts sold by original creditors to collection agencies with unresolved disputes? Specifically, if Company X billed $100 and I state it should be $75 based on reasonable means and Company X closes out the dispute in their systems because they disagree or give partial credit, should they be allowed to transfer the debt to a collection agency?

Complex issue's require different strategies and tools which most often are largely not interchangeable...........

In all seriousness what does verifying debt accomplish? Except allowing an easy "get rich quick" scheme to continue. Why bother attend college for a medical or engineering degree when all you have to do is buy "junk debt". For a few pennies and a few phone calls "you can get rich to"!! It is that easy. Simply buy a spreadsheet with a name and an amount.
So not to bore you I will put my suggestions for change first. If you are curious how I came up with them then read the rest of this comment.

What to do?

1st. Return all credit card debt back to the original banks and change the 6 month charge off rule existing today. ( they most likely never attempted to worked it out anyway because of the 6 month charge off rule)

2nd. All the returned accounts should be examined for the multiple bad, abusive and deceptive practices the banks implemented the last 15 years and then recalculated. Believe it or not, a practice fairly common 10 years ago was to send consumers multiple 0% offers (free cost money) but if you were to pay 10 minutes late online the rate would go to 29.9% and there was no recourse. So if banks offered "free cost money until the balance was paid off" and the debtor only paid late once or twice then the amount owed should be recalculated at the original 0%. Of course there would be limitations but more often than not the debtor simply paid late by a 1/2 day or day. Another example was when online payments were first introduced. Many times there were technical glitches yet the fault always fell on the consumer not the bank.

3rd. Once a new amount is recalculated then the banks should make a good faith attempt to work it out with the consumer. If after recalculation, it is determined there was an over payment from the consumer for more than or equal to a 25% return to the bank then a refund should be issued.

Anyway.. Verification should all ready be a given.

Verification simply verifies an amount. My guess is a large part of the outstanding debt today consists of debt from the bank's past abusive practices. Do we know today what percentage of debt outstanding is simply leftover from the 32.9% insane and abusive interest rates? How much of the outstanding debt is leftover from the many abusive practices considered illegal today?

In my case how does a consumer with 15 years of periodic statements marking in detail how the principal amount and more than fair interest has already been paid off but yet still has a collector calling?

What good does verification, objection to debt in a lawsuit or disputes do? This means nothing... For example, I have copies of letters sent, spreadsheets of interest rates going back to 2000 supported by statements and recorded phone calls. Calls consisting of attempts to work it out with a bank in 2009 -2010. The result? A junk debt buyer trying to squeeze out more money today above the 16% ROI the bank already made. I already liquidated my retirement account to contribute to this 16% return for the bank in 2010 . How much more do these banks and junk debt buyer's need over and above the principal and a generous interest ?

When a consumer can prove using spreadsheets, graph's and power-point presentations showing the abusive practices who out there is going to listen? The banks did not listen in 2003 or 2005 or 2007 or 2010 . Who here really thinks the 3rd or 4th generation junk debt buyer is going to sit down and examine 15 years of periodic statements. Who here thinks junk debt buyers will be appalled to see an offer of 4.9% jacked up to 29.9% because of a 10 minute late payment and forgive the debt? How come folks like me are dealing with these junk debt buyers on issues like these and not the original banks?

Feel free to contact me for documentation dating back 15 years including bi-weekly mailed offer's (ledger sized) of 0% interest rate cost "free" money. (god forbid you might pay 10 minutes late online because your rate will go to 29.9%) Multiple copies the banks have yet no avenue of recourse for the American consumer!!

There is nothing written above to allow "debtor's" to get out of paying debts. (a typical debt buyer comment). Just correcting an egregious "David and Goliath" that got out of control.

Surely there are enough new debts daily to make having to purchase old ones prohibitive? Oh wait....greed!

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