Is Credit Reporting an Attempt to Collect a Debt?



I have been asked this question frequently. Yes, Credit Reporting is an attempt to collect a debt. Until now, I have not pasted any case law. I was doing research and stumbled upon this is a case against my BFF, Midland:

Credit reporting constitutes an attempt to collect a debt. See, e.g.,
Rivera v. Bank One, 145 F.R.D. 614, 623 (D.P.R. 1993)(a creditor’s report of a
debt to a consumer reporting agency is a “powerful tool, designed, in part,
to wrench compliance with payment terms from its cardholder”); Matter of
Sommersdorf, 139 B.R. 700, 701 (Bankr.S.D. Ohio 1991); Ditty v.
CheckRite, Ltd., 973 F.Supp. 1320, 1331 (D.Utah 1997).
There’s some case law for you! Please forward me more or post more to this blog post if you run across more. This is likely more than you will ever need.
…and yes calling Midland my BFF was sarcasm.
Still fighting the essential fight,
  1. Hi Boiler, another great case law is one from last year. Haddad v. Alexander, Zelmanski, Danner & Fioritto. The court said that credit reporting may be considered collection activity, so debt collectors shouldn’t furnish information to the credit bureaus until the validation/verification period has expired and the debt collector has not received a dispute. Then the debt collector won’t have to request deletion of the trade-line to avoid violating § 1692g(b) in the event it cannot validate the account.

    • Shannon,

      Nice! Thanks for posting this. It is amazing how many different cases we can use as case law when we know abut them.

      Best wishes, Boiler

  2. Good job I am the whistleblower that exposed the credit card collections and litigation industry banks, debt buyers to attorney networks and I never saw someone try this approach. And Jamie Dimon is Midlands best friend he gives them a billion dollar revolving line of credit and when I forced his NCO Attorney netowork of 154 firms and 800 or so attorneys that was hit little game on the side to do his dirty work he had Midland expand from not only bottom feeder debt buyers and collection agency but now an attorney network too same guys same crimes. They didn’t even have to move or change anything. Actually it is pretty much that same group of firms and attorneys that get placements from all of the attorney networks and debt buyers to them just a different company name prints on the legal paper work filed which they never see anyway since it is all digitized and minimum wage employees do any actual talking or action most of the time. So Midland, Trak, Alliance, Unifund, Hanna, Zwicker and whatever other names of the day they have same people, process systems and not only credit card same guys all products, auto, medical, foreclosure mill. The important thing to remember they all have contracts with the various attorney networks not with any creditors. Why would they do that that makes a middle man taking half just contact with the creditors? Easy nearly impossible to force accountability or compliance. The bank is never the client the network is like in your case Midland but managed by Chase and BOA former executives. So they have not attorney contract with the creditor, not really any attorney client priveledge and contractually they are not allowed to have contact with any bank employee or access to their systems or docs only the handful of fields they receive in their placement files which isn’t much. The 30 validation letter and original complaint is filed all digitally the account isn’t even in their work que yet so much for attorney review. All collection calls and letters once with a firm and that 30 day letter dropped no one from the creditor or collection agency can make a call, talk to the consumer or attorney, provide information or documentation actually the account and info is moved to a different file or system so usually they can’t even see the account. So all of those network attorneys are subject to FDCPA for themselves and all actions that happen to the account once they are sent the placement file. I know a lot of attorneys good and bad but they all have one thing in common they are terrible at trying to set up, run or manage anything operationalized and this is almost closer to a manufacturing environment due to volumes. They all have to have their own call centers which actually not so easy to run and manage, 70% turnover, high cost to hire and train, not the top of the line employees want to make 300 collection calls a day, there is the IVR constant coding and management, dialer, ACD, coding and workfows, performance management gotta make sure they are banging out those calls and all of the letters and even most court docs magically come out of some printer in some location usually in this country and a letter vendor handles it and mail them. All them have some things in common like the no contract always ask “who is your client?” first you flustered them next they go into a rampbling about client confidentiality and so on simply state you feel it is very important as what laws and procedures apply vary by the answer we wouldn’t want to work under the assumption the original creditor is the client if that is not try and how would we be able to properly prepare the case you need to be able to identiy defects and mistakes in the credit bureau reporting and since you enter all cases where you find issues into the CFPB, FTC and AG databases who then do a 30 day investigation and provide me documentation which I typically use in court if an assumption is made that the creditor is their client then I am giving false information to government regulators who then send items to wrong locations that do not have or cannot access the information which interferes with their investigative and tracking functions for these government regulatory agencies. Also, it is needed for the purposes of discovery if there is no contract with the creditor that limits what I can ask for in discovery or what they can even produce no matter who orders it, same with who is the owner of the account and the full sale contract or contracts depending on the number of buyers because depending on the contract language they may not even have an ability to ask for information, account history any docs or proof of ownership nothing. And if they filed this suit already knowing they cannot meet the basic rules of civil procudure and discovery, the consumer will have already sustained damages and continue to daily. When a lawsuit is filed it is not just a judgment on a credit bureau impacting them or the charged off tradelines often wrong and duplicated which always ads real and actual damages often in the past, present and future. But the we will call FICO universe which isn’t just a credit score that massive database of data that updates by the minute adding data doesn’t only pull data from the three credit bureaus for all of the scoring, modeling and decisioning that it does then runs through an algorythyn that the math and formulas behind it I can only describe as looking like Einsteins theory of relativity. Another place of many it grabs data from which receives a heavy weight in the various products and models they offer is public records. This mega database extracts from all public court records and identifies some codes in the court systems which all have meanings and are behind the scenes. A biggie in this area is lawsuit filed for collection as soon as that hits whether it is showing or reported to the three credit bureaus in the modeling for everything from credit scores, to the underwriting and risk modeling which there are various models that go to 800-900, the banko score, risk scores everything depending on the number of trade lines and history could impact a credit score anywhere from 75- say 200-300 points in various models. Limiting access to credit, impacting availability and rates for mortgages, refis, mods, auto loans, credit cards car insurance everything. That one impact eventually as new credit is established and that input is in there everything in their life will be a higher rate. Which is why you saw Jamie with the big smile explaining to regulators it isn’t there fault they aren’t lending as much as everyone wants them to. Regulators said to tighten underwriting and reduce risk. So we can lend if you are telling us to but understand these are lower credit scores the average I think 675 so as we all learned we will be taking more risk and will have to charge more in interest and fees but will are willing to do that for you and to help people. And trust me he knows exactly what he is doing every law that they put out, guideline tightened etc. there are teams working on the counter move. All of this credit card litigation and debt sales is all due to one thing the signing of the Credit Card act and an industry retailiation that was months in the planning. Another important item even if you or they dismiss the account that consumer will still continue to be damaged for up to a decade even if you get the tradeline roomed, they pay in full or settle in full. Because the mega database that grabs the suit filed as an input and is built into the algorythym has no pull or input to case dismissed with or without prejudice or paid or settled in full, it isn’t extrated or factored so those actions are irrelevant and don’t mitigate the long term impact on the consumer and the long term impact of jacking rates and more free play for the bank. Always vacate, delete the tradeline, first thing pull all credit bureaus and check public record if one ofter more they don’t know about and always take the couple of minutes to go to the compaint websites for the CFPB, FTC and your AG first no better ammo for you the same way I made it to the FTC and explained it all only to find out they were only empowered for items on the third parties books and never anything in litigation, got to the OCC launched the highly publicized investigation on site and one of the most detailed OCC Consent Orders out there from it that came with a get out of jail free card for the great cooperations and stopping all of the litigation in house and external and deb sales without documentation and the toxic legacy portfolios. And had to go back to 1/1/09 and remediate and refund can’t find a court in the country not full and the dismissed about 1000 accounts and just sold them tand had the same attorney now garnishing and levying. There is more than $300 billion in bogus default judgments jamming the courthouses and it isn’t obvious or shows in reporting to the regulators because they are actively collecting on them all not Chase or any of them. That would raise red flags all over go garish or levy more than half of all adults in the country at the same time. They call it their retirement funds they can reach in and with little effort grab whatever dollar amount they need that quarter anytime. Now as I learned when the SEC referred my case to the OCC and my testimony, meetings and evidence let to not only the highly publiceised Chase OCC investigation but the industry as a whole due to the NCO role I had the first hand knowledge and evidence for nearly all of the major banks even the emails with me and their executives. That is why I ended up with the full picture no one else did. After testifying and working with those two I asked a simple question now the OCC can only touch what is on bank books and the FTC only third parties and no one anything in litigation then who is on base for the other 75%. After some thought “the CFPB” but at the time it was Elizabeth Warren and a blank board had to wait two years but during that time worked on thse multi year series in the American Banker, Rolling Stone, and all the others. These complaint databases same problem I had getting to each regulator all of them touch it but all in different systems, departments and entities. If you sent to all and you can even scan everything in too that helps they push out digitally to the proper locations for what their agency is empowered for and just like what I first was trying to explain and expose and learned with the agencies I have yet to see one where the same account and information entered when it goes to all three comes back the same or close. They all give different answers, amounts, excuses etc. they don’t have access to eachothers items to reconcile and often none match the lawsuit filed or if it does one of three. Now you name your price in damages and geek it up and the opposing counsel has nothing to say you have more information than he is capable of getting and he knows it. Always pull all three credits just before some started as soon as one of the complaint incestigation flags hit an account they have some one go into eoscar and make it disappear from all credit bureaus but they were already impacted with it there and guaranted if not spelled out will come back. All the hard with of me and so many others to get all the right orders into the CFPB, FTC, OCC orders and updated laws tougher penalties everything was for nothing if those complaint systems aren’t used they will lose their budgets and resources, all the illegal fraudulent models will grow faster than ever because there was no accoutability and they will never worry about an audit or anything again. That is why me and others are focusing on the violations in the orders and need to gather every account in violation we can for a meeting in DC next month to untie their hands and prevent the banks and third parties who are much more skilled at this now than before knock it all out laughing the full time. That’s why Jamie and others are being so cocky with Elizabeth and others. Consumers and Attorneys need to utilize those websites and complaint portals it is the only way your voice is heard, anything is tracked or ends up in reporting. Not so much any lawsuits they don’t track the details in them these databases is where they pull from, look for trends, nail violations and drop heftier fines and make them go back and refund tens of thousands more like BOA a couple weeks ago with the $30 million for violations. And intentional violations takes the gloves off from the deals they can prosecute.

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