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Third Party Debt Collectors



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Sub: Third Party Debt Collectors
Thu, 05/02/2009 18:30

There are three variations of Third Party debt collectors, and two are regulated by the Fair Debt Collection Practices Act.

The first involves the Third Party Debt Collector purchasing your information (the account number, your name, and the amount allegedly due).

The second involves a company that purchases the account when it was in default.

The third involves a the Third Party Debt Collector purchasing the actual account that is not in default. When a Third Party Debt Collector purchases your actual account that is not in default, they are regulated by the Fair Credit Billing Act, and those rules apply.

The Fair Debt Collection Practice Act prohibits a Third Party Debt Collector who purchased your information and a Third Party Debt Collector who purchase your account that is in default from certain things:

 They cannot contact you once they know or have reason to know you are represented by an attorney.
 They cannot contact you if you refuse to pay the debt.
 They cannot contact you at an unreasonable time or an inconvenient place.
 They must “validate” a debt upon demand within a specific time period and cannot contact you during the validation period.
 They cannot use abusive language or threaten to do something that they cannot legally do.

In the scenario where they purchase your information, they act as the “agent” of the creditor.

An agent is a person or business entity that is really an extension of a “principal”.

For example, a police officer is an agent of the particular city (principal) he or she works for. Everything he does unlawful, he and the city are responsible for, unless he is acting upon a specific written policy developed by the city. In that instance, if the city’s policy is illegal, the police officer is “immune” from a law suit, but the city is “liable”.

The same rules apply with Creditors and their Agent Debt Collectors. If a Debt Collector violates the Fair Credit Billing Act, without having knowledge that he is violating the Fair Credit Billing Act, the creditor is liable, but the debt collector is not. However, if the third party debt collector has knowledge that he is violating the Fair Credit Billing Act, then he and the creditor are liable.

Thus, if an account is in dispute under the Fair Credit Billing Act and the creditor does not resolve the dispute but instead sells your information to a third party debt collector and the third party debt collector violates the Fair Credit Billing Act without knowledge, then the creditor could be sued for violating that act but not the debt collector.

If an account is in dispute under the Fair Credit Billing Act and the creditor does not resolve the dispute but instead sells your information to a third party debt collector and the third party debt collector violates the Fair Credit Billing Act with knowledge, then the creditor and debt collector could be sued for violating that act.

In almost all instances, Third Party Debt Collectors violate both the Fair Credit Billing Act with knowledge, and Fair Debt Collection Practices Act.

When a third party debt collector purchases your information you have no contractual relationship with them nor any financial obligation with them, unless:

YOU ESTABLISH A RELATIONSHIP WITH THEM
BY MAKING A PAYMENT OR AGREEMENT TO PAY



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Sub: #1 They are supposed to report that the account is paid but some doThu, 02/05/2009 - 18:30



They are supposed to report that the account is paid but some do not. If you pay a charge off it should be updated as a paid charge off.


If they do not then you can dispute it to the credit reports as paid in full and send proof of payment, that should fix everything.


Unregistered

Sub: #2 Debt CollectorsThu, 02/05/2009 - 18:23



Once someone agrees to settle with a debt collector, does that company report it as settled to the credit agencies?


cajunbulldog
cajunbulldog

Posts: 4785
Credits: 42356.4

Sub: #3 This is funny. If you will read most loan docs or cc statement oWed, 02/21/2007 - 15:37



This is funny. If you will read most loan docs or cc statement of terms it states you agree to assignments. If they buy the paper,they are the creditor.Since they bought bad debt paper,they fall under the fdcpa and the fcra as well as applicable state laws. Please check your advice before posting in public. If you can offer me proof that what your lawfirm is saying is true,I may be swayed to believe this(Caselaw,courtcase #'s from pacer,etc.) I do agree in part to your term of relationship. By agreeing to pay you admit the debt and take a good chance of resetting the statute of limitations for legal action and definately reset for bureau reporting.

Cajunbulldog
Keeping an eye out for consumers.
http://www.ftc.gov/os/statutes/fdcpa/fdcpact.htm#809
http://www.ftc.gov/os/statutes/fcrajump.shtm
http://www.debtconsolidationcare.com.../about216.html
Use this letter to protect your rights under the FDCPA
myfairdebt.com & myfaircredit.com-Good source of case law in forums.


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