FACTA and guidelines for an effective FRCA 623 attack based upon inaccurate information in your credit report

Technorati Tags: Facta,FCRA 623,investigation,credit repair

Disputed information in your credit file must be Validated by original creditor. There have been many articles written about the FCRA and how it can be used to help consumers repair their damaged credit files. One Google search will turn up literally hundreds of articles on the subject. Much of the information is either too difficult to understand, or is woefully incomplete. Many of the authors of such articles have an ulterior motive; give the reader a tid-bit of information designed to gently lead them to their website where they then offer to give the reader the “whole story” for a price, or solicit other costly credit repair services.
 While I don’t necessarily blame them for trying to make a buck, I,like other consumers of credit repair information would like to simply get the whole story without all the underhanded marketing tactics that are so abundant on the Internet. I promise all of my readers that the information in my posts is “pure” and without strings attached!! Just knowledge, no fat, no bad information, and no marketing! While I do own and run a credit repair agency, the information I post is for CONSUMPTION, not to market my credit repair services.
By its very name, the Fair and Accurate Credit Transactions Act places new emphasis on accuracy of information in consumer reports. Two FACTA sections aim to improve the accuracy and integrity of information as well as give consumers a new right to dispute data included in reports directly with the company that furnished it. These sections are:

Accuracy guidelines for financial institutions and creditors that furnish information to credit bureaus. (FACTA §312(a), FCRA §623(e)(1)). Ability of consumers to dispute information with companies that report to credit bureaus. (FACTA §312(c), FCRA §623(a)(8)).

Like other FACTA sections, the accuracy and dispute sections call for rules to be adopted by the federal banking agency and the FTC. On March 22, 2006, the agencies jointly issued an Advanced Notice of Proposed Rulemaking (ANPR), a means of gathering information prior to a rule proposal. The ANPR can be viewed at www.ftc.gov/os/fedreg/2006/march/060322accuratecredittrans.pdf Public comments received in response to the ANPR can be viewed at www.ftc.gov/os/comments/FACTA-furnishers/index.shtm

While case law has established for the past few years that the Original Creditor (O.C.) can be held liable for reporting inaccurate information (Richardson vs. Fleet, Nelson vs. Chase Manhattan ), the FACTA legislation passed recently allows the consumer to go directly to the original creditor and dispute information which the original creditor (called the information furnisher in the FCRA), has supplied to the credit bureaus. However, before disputing with the original creditor, the CONSUMER MUST HAVE DISPUTED WITH THE CREDIT BUREAUS first. Following this step is crucial.

Again, when you write the Original creditor, you are asking for an INVESTIGATION, not verification. Under the laws, the OC’s are not required to verify an account, only to conduct an investigation. If you want to get results, you must invoke the right laws. O.C.’s are NOT required by law to “verify” anything. Basically, you can dispute information placed on your credit report by an O.C. in the same way as you would with a credit bureau. An original creditor must:

1. Conduct an investigation of the dispute
2. Review all information provided by the consumer relating to the dispute
3. Respond within 30 days to the investigation
4. If the information is inaccurate, they must notify the credit bureaus of the mistake and tell the credit bureau to correct it.

Some of you might remember the very popular slogan used by one of the major parcel delivery services: “We move at the speed of Business” Well, that slogan was not only true, but it was also prophetic. Large companies in the US are constantly buying each other out, merging with larger companies, and selling parts of their departments to vendor companies. This means that information can and does get lost in “translation.” As anyone who has ever taken an economics course knows, US companies are more concerned with profits than complaints.
It has been my experience as a credit repair professional that most companies (original creditors) do not adequately staff their dispute resolution departments until they are facing a class-action type lawsuit. That’s when the lawyers are brought in to clean things up and resolve whatever dispute occurred through litigation. One consumer complaint is rarely given the attention it deserves because of the simple, yet profound fact that the man-hours to resolve every complaint cannot be justified in a profit-driven environment. Bottom line: they don’t keep their records very well. In fact, most credit card companies only keep records for 13-18 months! Fortunately for consumers, the FACT-ACT now requires any issuer of credit to validate all information it reports to the three major credit bureaus. Section 623 (a) (8) D) of FACTA which is titled: SUBMITTING A NOTICE OF DISPUTE states:

• A consumer who seeks to dispute the accuracy of information shall provide a dispute notice (letter) directly to such person at the address specified by the person for such notices that:
• identifies the specific information that is being disputed
• explains the basis of the dispute, and
• includes all supporting documentation required by the furnisher (original creditor) to substantiate the basis of the dispute.

(E) DUTY OF PERSON AFTER RECEIVING NOTICE OF DISPUTE- After receiving a notice of dispute from a consumer pursuant to subparagraph (D),the person that provided the information in dispute to a consumer reporting agency shall–
(i) conduct an investigation with respect to the disputed information;
(ii) review all relevant information provided by the consumer with the notice;
(iii) complete such person’s investigation of the dispute and report the results of the investigation to the consumer before the expiration of the period under section 611(a)(1) within which a consumer reporting agency would be required to complete its action if the consumer had elected to dispute the information under that section; and
(iv) if the investigation finds that the information reported was inaccurate, promptly notify each consumer reporting agency to which the person furnished the inaccurate information of that determination and provide to the agency any correction to that information that is necessary to make the information provided by the person accurate.
§ 623. (b) Duties of furnishers of information upon notice of dispute.
(1) In general. After receiving notice pursuant to section 611(a)(2) [§ 1681i] of a dispute with regard to the completeness or accuracy of any information provided by a person to a consumer reporting agency, the person shall
(A) conduct an investigation with respect to the disputed information;
(B) review all relevant information provided by the consumer reporting agency pursuant to section 611(a)(2) [§ 1681i];
(C) report the results of the investigation to the consumer reporting agency;
(D) if the investigation finds that the information is incomplete or inaccurate, report those results to all other consumer reporting agencies to which the person furnished the information and that compile and maintain files on consumers on a nationwide basis; and
(E) if an item of information disputed by a consumer is found to be inaccurate or incomplete or cannot be verified after any reinvestigation under paragraph (1),
for purposes of reporting to a consumer reporting agency only, as appropriate, based on the results of the reinvestigation promptly –
(i) modify that item of information;
(ii) delete that item of information; or
(iii) permanently block the reporting of that item of information.


I won’t provide an interpretation here because that is as straight-forward as it gets. You can call up (or write) your credit card company, or any “furnisher” of credit and demand that they investigate your account for inaccuracies and by law they must comply or be found liable in a court of law. Remember what I wrote above, that the consumer must first dispute with the credit bureaus BEFORE they dispute with the original creditor. Why? Because when you dispute the debt with credit bureaus first, they will almost always verify the debt as legit and accurate (they are supposed to do this by contacting the above mentioned original creditor, but in most cases they don’t). When the debt is verified by the bureaus you then have standing to dispute with the original creditor who then will be liable for verifying a debt with the credit bureaus, but did not (could not) verify it with you - proving no investigation ever occurred!! When you write your dispute letter threatening to sue for damages they will immediately stop reporting the debt to the credit bureaus, who then in turn must delete it from your credit file.

What is E-Oscar??

Technorati Tags: e-oscar

 

e-OSCAR is a web-based computer software that data furnishers (creditors, banks, etc.,) use to communicate with the credit reporting agencies. The system enables Data Furnishers (DFs) and Credit Reporting Agencies (CRAs) to create and respond to dispute letters.

If you are positive a mistake has been made on your credit report, it may be that the e-Oscar investigation system is the reason the mistake was verified as correct. Credit reporting agencies (CRAs) have created an automated computerized system of dealing with credit disputes.

The e-Oscar (Online Solution for Complete and Accurate Reporting) system is used even when consumers send in detailed disputes, with supporting documents. The dispute is broken down into a two or three digit code and sent to the original creditor to verify a simple code, failing the duty to investigate

e-Oscar and disputes

As of 2004 the big three CRAs; Equifax, TransUnion, and Experian-require mandated use of e-Oscar. When a dispute is sent to a CRA by a consumer it is coded from among 26 different dispute reasons such as Not his/hers, claims inaccurate and sent to the data furnisher without any human intervention. The furnisher is than suppose to investigate the dispute and respond with the dispute result to the CRA. When the furnisher conducts an investigation they will look at their files to see to assess the accuracy of the information disputed by the consumer. If they determine the information is reporting incorrectly they will send an update to the CRAs with the correct information. If the furnisher never even responds within the 30 days the CRA must delete the information.

Problems with the e-Oscar System

From the surface e-Oscar is a great idea and will enable consumers to get their dispute resolved faster. The reality seems to be quite different. Two major problems exist with e-Oscar. First, disputes are shoved into a single dispute reason code. This is unfair because often disputes have many reasons. Nevertheless it still gets put into a single dispute code by a low paid employee who is scanning the dispute letter. The second problem is very little documentation is included.

The CRAs are NOT including all relevant information like they are suppose to. The FTC’s Report to Congress on the Fair Credit Reporting Act Dispute Process notes TransUnion typically does not supply copies of consumer-supplied documentation to furnishers but added that, if the documentation can be reasonably verified as being authentic, the account is automatically updated based on the documentation, in lieu of sending an ACDV (Automated Credit Dispute Verification). So if you send a copy of an account statement or some other proof that an account item is reporting incorrectly it rarely makes it to the data furnisher. Why? Because transmitting that information is not easy or cost effective for the CRAs. It requires them to mail it or fax it which costs money. As a result, the supporting documentation is left out.

Introduction

Q: How does the CRA convey a dispute through e-Oscar?
A: The CRA will notify the data furnisher by ACDV. ACDV stands for Automated Credit Dispute Verification. The Automated Consumer Dispute Verification (ACDV) is a consumer dispute that is routed to a data furnisher (DF) from a Consumer Reporting Agency (CRA) via e-OSCAR. ACDVs are sent to the data furnisher on behalf of the consumer.
The data furnisher returns the ACDV once the proper investigation has been completed. AUD stands for Automated Universal Data form. AUDs are initiated by the data furnisher to process out of cycle modifications and updates, and are sent to the CRAs with whom the data furnisher has a reporting relationship.

Batch Interface

Large data furnishers such as MBNA or Chase get lots of disputes. Going through each dispute manually is an expensive and resource intensive process. E-Oscar’s solution is to send all the disputes over in a batch computer file. Hundreds, even thousands, of disputes can be sent from the CRA to the data furnisher at one time.
The data furnisher can then send the computer file back to the CRA with the dispute results of the entire batch. One inappropriate feature is the “reply all” function. This allows the data furnisher to select a response, saying “Account Verified” and respond to all disputes at once.

So if 20 disputes came in, the data furnisher could respond to all 20 disputes with the result “Account Verified” without even looking at any of the disputes! That’s right, the data furnisher is able to respond to all disputes with a single click without even conducting an investigation or even looking at the dispute.
In fact, this is a feature e-Oscar is very proud of and has a section on their web site all about it.

Here s a quote taken from e-Oscar’s web site:
The Batch Interface is an exciting product offering that allows Data Furnishers with large volumes of

Automated Consumer Dispute Verification (ACDV) requests to receive a batch file in an XML format

Once the file is delivered, each Data Furnisher can further automate the development of responses to

ACDVs. The development effort by the Data Furnisher to achieve the benefits of the Batch Interface, will

vary depending on the Data Furnishers internal business and compliance requirements.
For example, one Data Furnisher may choose to auto-populate the response fields automatically for staff

review prior to submission. This business plan would save your staff the time and potential errors of data

entry. Another Data Furnisher may elect to automate only certain response types.
For example, A Data Furnisher might only automate “delete” responses and require that staff review

responses on all other disputes.(emphasis added)
The FCRA states that the furnisher must perform a reasonable investigation. However if the data furnisher is able to automate the investigation process without even looking at the incoming disputes, doesn’t that seem like a violation of the FCRA? How is this considered a proper and legal investigation!?

How long does the furnisher have to conduct an investigation?

A common misconception is that the furnisher has 30 days to perform an investigation of the dispute. This is not true. The 30 day clock begins when the CRA receives the dispute letter from the consumer. The CRA then needs time to send the data furnishers’ response to the dispute to the consumer once it is complete. Therefore the furnisher has around 15-20 days to conduct an investigation.

What happens if a furnisher does not respond?

This is often a desired outcome. Depending on what type of dispute it is, the CRA might update the account in favor of the consumer, or it might delete the trade line off the credit report.

Consumer Protection Bureau Brings Lawsuit against Cash America Pay Day Loan company

Revenge is a dish best served...by the CFPB!  Today the Consumer Financial Protection Bureau brought an enforcement action against giant pay day lender Cash America, one of the largest short-term loan sharks in the US.  Cash America agreed to pay $14 Million to 14,000 people for robo-signing practices related to debt collection lawsuits.  They will also pay 5 million for the violation and other misconduct, according to a CFPB report released today. 

CFPB has caught the scent of Pay Day loan sharks!!

Some of the "misconduct" mentioned in the enforcement action included destroying documents before the CFPB could examine them which is a big no-no in the legal world.  “We are also sending a clear message today to all companies under our watch that impeding a CFPB exam by destroying documents, withholding records, and instructing employees to mislead examiners is unacceptable.”CFPB Director Richard Cordray said.

Within months of the CFPB discovering the robo-signing, Cash America dismissed pending collections lawsuits, terminated all post-judgment collections activities, cancelled all judgments obtained, and corrected information it furnished to credit bureaus for the nearly 14,000 wrongful cases filed in Ohio.

These guys are scum.  The whole model of pay day lending is predatory in nature and promotes a vicious cycle of getting paid, paying off your loan, then not having any money so you have to get another loan.  Their victims are usually those who can't afford the terms and conditions of the loan, but are forced to accept them in order to eat or put gas in their car to get to work.  Once you decide you want out of the cycle, you end up on the receiving end of a lawsuit which is litigated illegally by the pay day lender - hence the CFPB enforcement action.

In the US, pay day loans are a multi-billion dollar industry.  In California, pay day lender Money-Mart settled a class-action lawsuit where they agreed to pay its customers $7.5 million.  The Money Mart settlement will resolve a class action lawsuit, entitled Dennis Herrera v. Check N’ Go of California, Inc., et al., that alleges Money Mart offered to California consumers CustomCash loans with interest rates that exceeded the limits set by California Law and Cash ‘til Payday loans that did not comport with the California law. Check n Go allegedly charged California customers up to 400% interest on loans which is far above what California law allows. 

If you are a victims of a pay day lender, you should contact your state Attorney General's Office and file a complaint immediately.  You may be entitled to money somewhere down the road because you can bet the CFPB has "released the hounds" so to speak, on pay day lenders.  They smell blood and are going for the kill. 

Share |

Are You Facing Foreclosure? The Foreclosure Fairness Mediation Program can help!

Technorati Tags: foreclosure,HAMP program,mandatory foreclosure mediation,Wall-street,loan servicers,foreclosure fairness mediation program,department of financial institutions

In response to the subprime mortgage foreclosure crisis of 2007, the Obama administration passed legislation to create the Home Affordable Modification Program (HAMP). The HAMP program was supposed to help homeowners facing mortgage foreclosure with loan modifications.  HAMP was touted as a government ‘knight in shining armor’ for those facing foreclosure.  Under HAMP, mortgage servicers (lenders) are provided with the opportunity to enter into contracts with the Federal Government to modify homeowners’ mortgage loans in a particular and uniform fashion and receive incentive payments in return.

The first big mistake of the HAMP program was that the government actually trusted the banks to participate in HAMP program almost exclusively on their own terms and by their own free will.  For example, in the HAMP Handbook for Servicers of Mortgages from the US Treasury requires participating servicers to actively solicit borrowers to participate in HAMP before referring a loan to foreclosure or conducting a scheduled foreclosure sale. Of course, the banks were reluctant to go outside of their traditional foreclosure models because those models usually lead to the borrower being cheated out of a legitimate chance to refinance with affordable terms and additional earnings for the bank once the defaulted loan is securitized and sold on Wall-Street.

The second blunder of the HAMP program was that the incentives for the loan servicers weren’t enough to get them on board if they weren’t doing loan mods prior to the HAMP program.  The latest mortgage news is that the government has worked out a settlement deal with the five biggest banks accused of mortgage foreclosure malfeasance.  For a comprehensive report on just how ridiculous the government settlement with the banks go to here.  The five banks involved in the fraudulent activities and are required to pay approximately $25 billion to states, individuals and the government are :

• Bank of America
• Citi-Bank
• Wells Fargo
• Ally/GMAC
• JP Morgan Chase

The agreement settles state and federal investigations finding that the country’s five largest mortgage servicers routinely signed foreclosure related documents outside the presence of a notary public and without knowing whether the facts they contained were correct.
Because of this litigation and the abject failure of the HAMP program, more than 30 states have implemented their own mandatory foreclosure mediation programs.  The states that are participating in mandatory mediation are:

• California
• Connecticut
• Delaware
• WA. DC
• Florida
• Hawaii
• Idaho
• Illinois
• Indiana
• Kentucky
• Maine
• Maryland
• Massachusetts
• Michigan
• Nevada
• New Hampshire
• New Jersey
• New York
• New Mexico
• Ohio
• Oregon
• Pennsylvania
• Rhode Island
• Vermont
• Washington State
• Wisconsin

In Washington State, the Governor signed into law the Foreclosure Fairness Act of 2011. The law provides Washingtonians facing foreclosure the opportunity to be referred by a housing counselor or an attorney to mediation with their lender to review available options to keep their home. This mediation is mandatory for all lenders before they foreclose on any home in Washington State.

If you live in one of the state listed above, contact your state Attorney General and ask about a similar program.

Debt Settlement: Fraudulent, Abusive, and Deceptive Practices Pose Risk to Consumers

Share

Sure, we can settle your debts!

As consumer debt has risen to historic levels, a growing number of for-profit debt settlement companies have emerged. These companies say they will negotiate with consumers' creditors to accept a lump sum settlement for 40 to 60 cents on the dollar for amounts owed on credit cards and other unsecured debt. However, there have been allegations that some debt settlement companies engage in fraudulent, abusive, or deceptive practices that leave consumers in worse financial condition. For example, it has been alleged that they commonly charge fees in advance of settling debts or without providing any services at all, a practice on which the Federal Trade Commission (FTC) recently announced a proposed ban due to its harm to consumers. The Committee asked for an investigation of these issues. As a result, GAO attempted to (1) determine through covert testing whether these allegations are accurate; and, if so, (2) determine whether they are widespread, citing specific closed cases. To achieve these objectives, GAO conducted covert testing by calling 20 companies while posing as fictitious consumers; made overt, unannounced site visits to several companies called; interviewed industry stakeholders; and reviewed information on federal and state legal actions. GAO did not use the services of the companies it called or attempt to verify the facts regarding all of the allegations it found.


GAO's investigation found that some debt settlement companies engage in fraudulent, deceptive, and abusive practices that pose a risk to consumers. Seventeen of the 20 companies GAO called while posing as fictitious consumers say they collect fees before settling consumer debts--a practice FTC has labeled as harmful and proposed banning--while only 1 company said it collects most fees after it successfully settles consumer debt. (GAO was unable to obtain fee information from 2 companies.) In several cases, companies stated that monthly payments would go entirely to fees for up to 4 months before any money would be reserved to settle consumer debt. Nearly all of the companies advised GAO's fictitious consumers to stop paying their creditors, including accounts that were still current. GAO also found that some debt settlement companies provided fraudulent, deceptive, or questionable information to its fictitious consumers, such as claiming unusually high success rates for their programs--as high as 100 percent. FTC and state investigations have typically found that less than 10 percent of consumers successfully complete these programs.

Other companies made claims linking their services to government programs and offering to pay $100 to consumers if they could not get them out of debt in 24 hours. GAO found the experiences of its fictitious consumers to be consistent with widespread complaints and charges made by federal and state investigators on behalf of real consumers against debt settlement companies engaged in fraudulent, abusive, or deceptive practices. Allegations identified by GAO involve hundreds of thousands of consumers across the country.

 Federal and state agencies have taken a growing number of legal actions against these companies in recent years. From these legal actions, GAO identified consumers who experienced tremendous financial damage from entering into a debt settlement program. For example, a North Carolina woman and her husband fell deeper into debt, filed for bankruptcy in an attempt to save their home from foreclosure, and took second jobs as janitors after paying $11,000 to two Florida companies for debt settlement services they never delivered. Another couple, from New York, was counted as a success story by an Arizona company even though the fees it charged plus the settled balance actually totaled more than 140 percent of what they originally owed.

Applicability of the FDCPA – It matters if the listing is from the original creditor or collection agency

 

Technorati Tags: Consumer Protection Laws,Fair Debt Collections Practices Act,Collection agency,Credit card,Creditor,Debt buyer,Debt validation,Fair Debt Collection Practices Act,FDCPA,United States.

The FDCPA does not cover collection tactics employed by original creditors (like credit card companies who issue credit cards). It only governs the actions of a debt collector (collection agency). Let’s look at the definition of these two groups as defined by the FDCPA.

TITLE VIII – DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]
§ 803. Definitions [15 USC 1692a]
As used in this title –
(4) The term “creditor” means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another.

What does that mean? It means that, as far as the FDCPA is concerned, a creditor is the original entity which loaned money to a consumer. It is not a collection agency. The definition of a debt collector is as follows:

TITLE VIII – DEBT COLLECTION PRACTICES [Fair Debt Collection Practices Act]
§ 803. Definitions [15 USC 1692a]
As used in this title –
(6) The term “debt collector” means any person who uses any instrumentality of interstate commerce or the mails in any business the principal purpose of which is the collection of any debts, or who regularly collects or attempts to collect, directly or indirectly, debts owed or due or asserted to be owed or due another.

So when a collection agency is assigned, or has purchased, your debt, they are NOT the creditor. They are the debt collector and the actions they take are all governed by the FDCPA.

What if “Bob” is a lawyer?

Under the FDCPA, even if Joe hires a lawyer or law firm to collect a debt from you, the lawyer or law firm is still considered a collector and must adhere to the FDCPA.

What does a debt collector need to provide as debt validation?

• Proof that the collection company owns the debt/or has been assigned the debt. (Bob is legally entitled to collect this particular debt from you.) This is basic contract law. It is very difficult to get a judgment without a direct contract between collection agency and the original creditor.
• At a minimum, some account statements from the original creditor. If you really want to get sticky, you can pin them down on the amount of the debt by requiring complete payment history, starting with the original creditor. (How the heck did Bob calculate this debt? What fees/interest Bob has tacked on to this debt and how he determined these fees?) This requirement was established by the case Fields v. Wilber Law Firm, Donald L. Wilber and Kenneth Wilber, USCA-02-C-0072, 7th Circuit Court, Sept 2004..
• Copy of the original signed loan agreement or credit card application. (Your contract with Joe establishing the debt between you.) However, account statements from the original can fulfill these requirements.

What Bob gets out of the deal

It use to be that in most cases, creditors assigned, not sold, its debts to a collection agency. But not any more.

Creditors hire collection companies (like Bob) to collect debts for them, because they simply don’t have the time or resources to chase down all of their severely overdue accounts. Collection agencies have cheap labor and a streamlined system to pursue such accounts. When a creditor hires a collection agency, the debt has been assigned to the collection agency. If a collection agency is successful at collecting the money on the account, they usually keep a percentage of what is collected as payment for services.

Original creditors sometimes sell debts in large portfolios to collection agencies. This is starting to be the norm, and several of these companies, called Junk Debt Buyers (JDBs), are now being traded on Wall Street. The companies do not spend much money at all for these debts, sometimes paying less than 1 cent on the dollar. Even if the debt is not a large debt, they often hire attorney to send out mass form-letters to debtors in the hopes of collecting. As you can see, even if they get a small percentage of the debtor to pay, profits are enormous. For more on JDBs, you can read our article here.

Assigned or purchased debt (How do you know Bob is the right guy to pay?)

Why should you care if a debt is purchased or assigned? In an assignment, the collection agency does not own the debt, and therefore you do not technically owe them any money. There is no way for a collection agency to prove that you owe them money because there is only an assignment of the debt and not a contract between you and the creditor.

One loophole: Some contracts have the wording “debtor agrees to be responsible for payment of this debt to creditor OR ITS ASSIGNS.” This IS a contract between you and the debt collector as well as the creditor and if they can provide you with a copy of a contract that states this (with your signature!), you are pretty much stuck and need to negotiate.

What if the collection agency (Bob) proves they purchased the debt? Is he now the original creditor and no longer subject to the FDCPA?

If they do purchase the debt, this does not make them the original creditor. They are still a debt collector and covered by the FDCPA.

Continue to treat any collection agency, junk debt buyer or law firm who says they own the debt as a collection agency subject to the FDCPA. You can still request validation and proof of the purchase, because if they can’t validate it, the collection agency can’t prove you owe the debt. Often a JDB will tell a consumer that since they purchased the debt, they are not subject the the FDCPA. It’s simply not true

The Right to Validate Your Debt

Under the FDCPA, you are allowed to validate this debt, and the creditor (in this case, the collection agency) must show you proof that you owe the debt to the collection agency (not to the original creditor.)

The specific section of the FDCPA:

FDCPA Section 809. Validation of debts [15 USC 1692g](b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

Plus, they must show proof positive that you owe them this debt. It’s not enough to send you a computer-generated printout of the debt. There is an opinion letter from the FTC to back this up:

http://www.ftc.gov/os/statutes/fdcpa/letters/wollman.htm

Nor can they ask you to pay for digging up records of your debt:

http://www.ftc.gov/os/statutes/fdcpa/letters/krisor2.htm

So, if a creditor can’t verify a debt:

• They are not allowed to collect the debt,
• They are not allowed to contact you about the debt, and
• They are also not allowed to report it under the Fair Credit Reporting Act (FCRA). Doing so is a violation of the FCRA, and the FCRA states that you can sue for $1,000 in damages for any violation of the Act.

The opinion letter from the FTC which clearly spells out that a collection agency CANNOT report a debt to the credit bureaus which has not been validated:

http://www.ftc.gov/os/statutes/fdcpa/letters/cass.htm

It also states that you can sue in federal or state court. So if you have them on a violation, then you have damages of $1,000 for the incident plus damages. Small claims court, anyone?

When a collection agency responds to your request for validation with a summons to appear (meaning they are trying to get a judgment against you)

1/17/2002: These sneaky collection agencies are starting to catch on to the debt validation concept. (No doubt there is some kind of collection agency newsletter going around telling these folks about the whole process.) I’ve heard from my readers that some collection agencies are starting to respond to validation requests with summons to appear in court. There is precedent which says that a collection agency cannot even file suit against you if they haven’t validated the debt within the initial 30 day period. If this happens to you, you may cite the case:

Spears vs. Brennan

The appeals court determined:

“Brennan (plaintiff collection agency attorney) violated 15 U.S.C. § 1692g(b) when he obtained a default judgment against Spears (defendant) after Spears had notified Brennan in writing that the debt was being disputed and before Brennan had mailed verification of the debt to Spears.”

This means that you have an absolute defense in court to deny them judgment if they still have not validated the debt. Once you get your FDCPA dispute letter in, the collector cannot even get a judgment until they satisfy the FDCPA law. The appeals court overturned the default summary judgment in part because the collection agency lawyer did not meet the rules of the FDCPA.

This could be grounds for getting a default judgment vacated. It’s also another violation of the FDCPA and you can collect $1,000 from them.

The Debt Validation Strategy

It might be helpful to look at our illustration of the process before you get started. You might also want to read this, sort of our own “validation” of the process given here.

1. Send a letter requesting validation to the collection agency (our buddy Bob in the preceding example).
2. If you don’t know the address of the collection agency, here is a tip to help you find it.
3. Dispute the collection with the credit bureaus.
4. Wait 30 days to hear back from the collection agency. Most likely they will not respond or they will respond saying that they received your letter. Only a letter which includes:

o Proof that the collection company owns the debt/or has been assigned the debt,

o Complete payment history, starting with the original creditor, and

o Copy of the original signed loan agreement or credit card application

is satisfactory.

5. If they haven’t sent you satisfactory proof, send a copy of your receipt for your registered mail, a copy of the first letter you sent and a statement that they have not complied with the FDCPA and are now in violation of the Act. Tell them they need to immediately remove the collection listing from your credit report or you are going to file a lawsuit because they are in violation of the FDCPA, section 809 (b).

6. Wait 15-20 days to hear back after this second letter to the collection agency. They will either remove it or not respond.

7. If they do provide a contract with a signature from the original creditor showing that you owe the debt, there is one more thing you can try: see if they are legally licensed to collect the debt in your state. Here is a good site to begin your search.

Not all states require licensing, however. Here’s a little cheat sheet (Word Doc) to see what the collection licensing laws in your state are. It’s got other handy dandy state law information as well.

If you believe that they are not licensed, and licensing is required in your state, write them another letter and tell them they are in violation of your state’s collection laws and are subject to prosecution and fines. Cite your state’s fines and procedures in the letter. This is a last ditch effort, but has worked in some cases.

8. Typically, your work will stop here, as most collection agencies will bow down to your demands and send you a letter agreeing to remove the listing. Now all you have to do is send a copy of the letter to the CRAs.
If the collection agency did not agree to remove the listing, then you need to continue to the next steps.

9. File a lawsuit in small claims court against the collection agency on the basis of violating the FDCPA.

10. Have the papers served to the collection agency. (You can find a paper server on the internet for about $25). Here is a good link. And here is another: http://www.1-800-serve-em.com/servicemap.html

11. In the meantime, in a parallel effort with your lawsuit against the collection agency:

12. If the collection comes back as “verified” from the credit bureaus, you now have proof of further collection activity from the collection agency. (The assumption is that the credit bureau contacted the collection agency to verify the debt.) Since the collection agency did not validate the debt, further collection activity is a violation of the FDCPA.

13. Contact the credit bureaus, and tell them that the creditors did not verify the debts under the FDCPA, and send copies of your proof. Request the method of verification, which is your right under the FCRA. It is crucial to contact the credit bureaus before filing a lawsuit. Make sure you state that the collection agency did not respond to your request for debt validation.

14. You can try sending them this letter to see if they will budge. They may tell you that the request needs to come from the creditor. This is baloney. If they can’t give you reasonable information on how they verified the information and the collection agency has provided you none, you can conclude there was no reasonable investigation performed. They are teetering on the edge of “willful non-compliance” under the FCRA. Tell them so.

15. File a suit in either small claims, state or federal court. The basis of the lawsuit should be that the credit bureaus could not provide a satisfactory method of verification, or did not conduct a reasonable investigation.

16. Have the papers served. (You can find a paper server on the internet for about $25). Here is a great link where you can search for the local office of the credit bureau near you. http://www.llrx.com/columns/roundup14.htm

17. Notify the bureaus that you are suing them. You can use this letter. The credit bureaus will call the creditors and find out that there is a question about whether the debt is legitimate. They should delete it immediately. If you want more legal ammo, you might also try looking up similar cases to cite. We have a list of online resources here.

I hope these tips have encouraged you. Good luck on pursuing financial freedom!

How to Raise Your Credit Score in 2-3 months

Technorati Tags: credit repair,secured loan,secured cd loan,raise your credit score

When I was a kid, my uncle told me something that I will never forget.  It was a simple truism that has stuck with me since he said it.  I came home from school one day and my uncle had come by to visit us. He lived in a different state, so I rarely got to see him as much as I would have like to. 

My mom had already gone to work because she worked swing-shift.  My Uncle was in the kitchen when I got home.  I had brought a free lunch form home from school for her to sign and needed to return it to school the next day.  Fearing she would forget to sign it, I asked my Uncle to sign it for me.  When I handed it to him he looked it over and looked back at me and said, “Kirk, there’s no free lunch.”  Puzzled at his statement, I retorted, “yes there is, all you have to do is sign the form and I get free lunch at school.”  Again, my Uncle said, "No boy, there’s no free lunch, someone is paying for this – it might not be you, but someone is paying for it.”  “Nothing in this world is free.”

I told that brief story because as I grew up and started living my life I learned that his words were very true.  Nothing in this world is free – and that includes raising your credit score.  There are lots of ways to improve your credit and all of them take time – there are no super-fast ways to increase your fico score outside of becoming an authorized user on someone else’s account (I wrote an article on that a few months ago) or purchasing seasoned trade lines.  Both methods work, and both can raise your fico score fast.  However, becoming an authorized user can be difficult if you don’t have a family member or friend who is willing to do it, and purchasing a trade line is flat out expensive. 

Furthermore it is difficult to know which companies are reputable and which ones are scams. 
The method I am going to share here will cost you approximately $500 - $1,200 but it doesn’t involve dealing with family or a shady trade line seller who might take you for a bunch of your hard-earned money.  Just follow the steps below and you will see a significant increase in your fico score in 2-3 months, possibly even sooner!

Step one: Purchase a CD for $1000.00 –$1200.00. A Certificate of Deposit allows the owner to deposit a certain amount of money, (usually a minimum of $1000) as an investment for a fixed length of time, ranging from three months to five years. CDs are federally insured and pay higher rates of return than simple savings accounts.

Step 2: Ask the loan officer how long it will take them to process the CD.  Once you find out, come back to the bank after the CD has been processed and ask for a loan using the CD as collateral.  The bank will cut you a check in the amount of the Cd. Deposit the check into your saving account and arrange with the loan officer to allow for automatic withdrawals in the agreed upon monthly payment for the term of the CD. That’s it. 

Rates vary, but typically, the borrower will pay a premium of several percentage rates to borrow their own money. In other words, if the CD is paying 6 percent, for example, the cost of borrowing might be 9 percent.

Secured loan method

1. Deposit $300 – $500.00 into your bank account. 
2. Take out a secured loan for that exact amount.
3. Either deposit the money immediately into a saving account and arrange for automatic monthly withdrawals to pay back the loan or take the money and make monthly payments on your own (if you trust yourself to make the payments on time every month).

OR. Take that money from the first loan and go to another bank and do the exact same thing, taking out another secured loan.  Do this with as many banks as you can manage. I suggest no more than three or four.

Remember, you absolutely must be disciplined and organized enough to make your payments on time each month or this will blow up in your face.  I suggest you organize it so the money your using to do this is exclusively for this and this ALONE.  This is going to raise your fico score fast.  In six months you are going to see big jump in your score. 

Know and understand the factors that affect your FICO score. 

 

·         Payment History: 35% Capacity/Utilization

·         Amounts Owed: 30%

·         Length of Credit History: 15%

·         New Credit: 10%

·         Types of Credit in Use: 10%

Look at the factors listed on the pie chart above.  The chart represents the factors that generally make up how your credit file is scored.  You will see that your payment history makes up the highest percentage (35%).  In any analysis of the fico algorithm, payment history usually carries the most weight of all the factors that make up your score. It is important to point out that these figures provided by Fair Isaac are supposedly for the “General Population,” and because there are different score cards, as mentioned above, the relative importance of each category can be different depending on where the fico system categorizes you. 


Each of these categories also represents some very typical thresholds for disbursement of better or worse interest rates and for approval. For example, a person with a 400 credit score would probably not be approved for any kind of loan, whereas a person with a 775 would not only be approved for most any loans, but they would also probably not require much (if any) documentation and would get the best market interest rates available. Some lenders will vary the above categories, but the concept is almost universal: the higher your score, the better your interest rates and the increased likelihood you will be approved—because your score represents a numerical figure that indicates how likely it is that you will repay a credit obligation. 


So, what goes into a score? Obviously if you've ever seen a credit report, the bureaus have lots of information about your finances and credit history, as well as personal information. Still, many people are unfamiliar with how each of these items weighs in with respect to credit scoring, and for a very long time consumers were left COMPLETELY in the dark about how FICO scores are calculated then, due to many FTC complaints by customers, FICO released a little bit of information. While this information is vague, there is a great deal of research that has expanded upon this knowledge base. A basic breakdown of how FICO Scores are calculated is as follows:

Another important point to make on this subject is that score cards can change. For example, if someone right out of bankruptcy pays their bills on time for two full years, they may see their score as high as 720+, but a few months after that their score could significantly drop as they are placed back among people who pay their bills on time always, since now they will seem relatively worse than the others in their score card. Over time as one's financial circumstances remain static and their payment behaviors remain the same, the likelihood of score card 'jumping' is significantly reduced.  Because of the different impact of each category, and because different score card profiles will often result in varying credit scores, the cleanest credit report is not always the highest scoring one. 

 

What is Debt Validation and does it actually work?

Technorati Tags: debt validation,fdcpa section 803

Most people who try to fix their own credit will sooner or later run across information on debt validation. The first mistake people make when trying to validate a debt is to confuse it with debt “verification.” Let’s get this confusion clarified before we actually get into what validation actually is and how it can be used to repair a credit report.

• Debt validation refers to the process of a COLLECTION AGENCY providing a consumer with proof that a debt actually belongs to that consumer.

• Debt verification refers to the process of a CREDIT REPORTING AGENCY verifying with an original creditor or a collection agency that a debt actually belongs to a consumer.

Now that we know who the debt validation process refers to – collection agencies and NOT CRA’s (credit bureaus), we can now find out how the process works with credit repair.

The debt validation process can be found in Section 803 of the Fair Debt Collection Practices Act (FDCPA). It provides:

Section 803 (b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

Plus, they must show proof positive that you owe them this debt. It’s not enough to send you a computer-generated printout of the debt. They must prove in writing that they actually purchased the debt from the original credit grantor. In addition to that, they must also foot the bill for the cost of obtaining the information from the original creditor.

One way of looking at it is like this: Suppose you borrowed $50.00 from your best friend Lisa, then her friend Brian came up to you and said he bought your debt from Lisa and you now owe him the money you once owed to Lisa. These might be some of the thoughts you would have:

1. How do you know that Brian is actually collecting for Lisa? What legal documents does Brian have to prove that he is legally authorized to collect?

2. How much is the actual debt? What payments have already been made on the account? Where is the accounting of the debt, including all interest and fees? Are these fees and interest amounts legit?

3. Do you really owe Brian the money? Or was it actually a third party, James? Where is the contract showing that you made a deal with Brian and not James?

4. How do you know if you pay Brian, Lisa won’t come back and ask for the money you originally owed her?

It works the exact same way when a collection agency sends you a letter stating that you owe them a debt you once owed an original creditor. They must prove you owe them the debt. Their word on official looking letter-head or a phone call is not enough. If the collection agency cannot provide legal proof, they are in violation of the FDCPA and can be sued. Further, they cannot continue to report the debt the CRA’s, who in turn cannot continue to list the debt on your credit report. The listing must be immediately deleted. You have this right as a consumer and the law is on your side should you choose to use it.

Is 'rapid re-scoring' better than long-term credit restoration?

Mortgage companies use 'rapid rescore' to quickly boost FICO scores.


"We've never seen a legitimate credit repair operation" is the quote I read in bold large type on a website called Credit technologies, Inc. (credittechnologies.com). The website was quoting C.Steven Baker, who is the Director of the Federal Trade Commission's Chicago Regional office.  Honestly, when I saw that quote I was a little shocked and offended.  First, let me say a little something about credit technologies, Inc.  The company was founded in 1990 by Thomas Conwell III.  Their official business listing is a 'consumer reporting agency'.  They actually offer an impressive array of services including: credit reporting, credit re-scoring, automated credit analysis, and access to many types of public records.  According to their website they also offer mortgage, Realtor referral services. 
Only after reading through the 'Services' page of their website did I realize why they used that quote from Mr. Baker.  Their main service is rapid re-scoring of credit files which basically entails the same type of work credit repair companies do, except they claim to do it faster and better.  After more research, I found that while there are less of that type of company than there are credit repair agencies, the same warnings should apply to them: watch out for the scammers!

This company (Credit technologies, Inc.) claims that a consumer can get their credit report rapidly re-scored without providing any documentation.  If you read the article that I reference below in this post, you will see this type of service is regulated by the same laws (CROA) as credit repair companies.  That means they ultimately must  operate by the same rules.  The main rule to which I am referring is section 611 of the Fair Credit Reporting Act (FCRA) - duties of furnishers upon receiving dispute from a consumer. While the turn-around time is faster because of the contractual relationship between the credit reporting agency and the mortgage company, the responsibilities of the consumer disputing the information are the same: they must provide documentation that indicates proof that the information contained in the credit file is either, wrong, erroneous, or incomplete.  If the consumer cannot provide that proof, it does not matter how fast the turn-around time is, the information will be verified by the original creditor and the consumer's FICO score is not going to change.

Now I would like to put some context around that startling statement from Mr. Baker.  It just so happens that I was doing some internet surfing looking for information on the Credit Repair organizations Act and found a news article from 2010 indicating 9 Chicago area credit repair agencies were indicted and sued by the FTC for fraud and deceptive practices.  On top of that, most of the agencies that were sued were not even registered with the State of Illinois to be doing business.  They had no Illinois state business licenses!  It's no secret that there are a lot of so-called credit repair companies that commit fraud in order to deceive their clients.  The nature of credit repair itself makes it easy for someone to put up a website, and claim that they can clean up someone's credit when they know next to nothing about consumer protection laws. 

Credit repair, at its core,  is simply the act of telling a credit repository (better known as credit reporting agencies) either in writing or on the phone that you don't agree with something in your credit file.  That's it.  It has been my experience, along with finding tons of empirical evidence from organizations like the creditinfocenter and  National Consumer Law Center that the credit repositories are the ones who complicated things by not being responsible with our private financial information.  So I would beg to differ with Mr. Baker.  Maybe he's never seen a legitimate credit repair agency in Chicago and other places under his jurisdiction, but I know of several legit credit repair agencies personally, including the one I own and operate.

What  is Rapid Re-scoring?

Rapid re-scoring is a service that is exclusive to mortgage companies, Brokers, and Realtors who contract with the 'big three" credit bureaus on behalf of their clients who want to raise their FICO score in order to qualify for a loan or a better interest rate on a loan.  The service is not available to the general public and costs about $30.00 per tradeline.  The basic process is the same for each credit provider.  Once a tradeline has been identified, an updated statement or letter from the account holder is obtained.  Paperwork from the credit provider is filled out and returned along with the proof of change to the account.  The credit provider researches and verifies the validity of the update and adjusts the score based on the updated information.  The credit provider then notifies the lender of the change. This entire process can take little more than a few days.  For a more details on how rapid re scoring works visit this site.

Is rapid re-scoring better than traditional credit repair?

It depends.  Assuming both the credit repair company and the rapid re-scoring company are legit and do good work, it really depends upon which type of tradeline you are dealing with, and how fast you want the tradeline(s) investigated, and whether you have documentation that can prove the tradeline is erroneous or incorrect.  For a list of the types of tradelines eligible for rapid re-scoring please see the website I referenced above.  If you are only 20-30 points from a certain score and you are well into the process of buying a home, I would go with a rapid re-score.  If you are six months out and just have started looking to buy a home, I would definitely go with a reputable credit repair agency.

Technorati Tags: Rapid rescoring,credit repair organizations act,CROA,credit repair

Related articles

• In FTC Study, Five Percent of Consumers Had Errors on Their Credit Reports That Could Result in Less Favorable Terms for Loans (FTC.gov)
• 25% Of All Credit Reports Are Inaccurate (helpwithdebtnow.com)
• In Settlement with FTC, Debt Collectors Agree to Stop Deceiving Consumers and Pay Nearly $800,000 (FTC.gov)
• Your credit report may be wrong (abcactionnews.com)
• American Debt Enders Said Watch Out For Credit Report Errors Belief Now Confirmed By NY Times Article Discussing Long Awaited FTC Report (freecreditcounselingblog.com)
• FTC Study Details Inaccuracies in Credit Reports (insideprivacy.com)

The 'Least Sophisticated Consumer' Rule

Share |

 The "Least Sophisticated Consumer" Standard

Okay folks, time to put on your legal-eagle hats.  It's time for some heavy stuff!!  This post is about a legal principle that most people do not know about, and is a term you will only hear during FDCPA litigation.

You lazy readers better run!!  I'm going to be using the dreaded enemy of the non-critical thinker: legal citations to case law!!  But seriously, this post is not for the faint of heart.  It's jam-packed with A LOT of legal terms and information for those of you who might have the ability to represent themselves pro-se in a court of law.  And away we go...

Most debt collectors are mean, abusive and intimidating individuals.  The rest are scum. I can understand they have a job to do, but many of them use tactics so horrible that Congress had to create a whole body of law just to regulate how they conduct business.  One of the deceitful and abusive tactics they use is sending you a dunning letter that looks like a legal pleading, or gives the indication that you are being sued by a lawyer because the letter-head looks like it is from a lawyer's office. 

The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd. This standard is consistent with the norms that courts have traditionally applied in consumer-protection law. 



The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious.
 To serve the purposes of the consumer-protection laws, courts have attempted to articulate a standard for evaluating deceptiveness that does not rely on assumptions about the "average" or "normal" consumer. This effort is grounded, quite sensibly, in the assumption that consumers of below-average sophistication or intelligence are especially vulnerable to fraudulent schemes. The least-sophisticated-consumer standard protects these consumers in a variety of ways. First, courts have held that collection notices violate the FDCPA if the notices contain language that "overshadows" or "contradicts" other language that informs consumers of their rights. See Graziano, 950 F.2d at 111 (notice of right to respond within thirty days is not effectively communicated when presented in conjunction with contradictory demand for payment within ten days); see also Swanson v. Southern Oregon Credit Service, Inc., 869 F.2d 1222, 1225 (9th Cir.1988)

The least sophisticated consumer standard is derived from 15 USC § 1692e of the Fair Debt Collections Practices Act under the heading False and Misleading Representations.  The most widely accepted test for determining whether a collection letter violates § 1692e is an objective standard based on the "least sophisticated consumer." This standard has been widely adopted by district courts in this circuit. See, e.g., Johnson v. NCB Collection Services, 799 F.Supp. 1298, 1306 (D.Conn. 1992); Rabideau v. Management Adjustment Bureau, 805 F.Supp. 1086, 1094 (W.D.N.Y.1992); Britton v. Weiss, 1989 WL 148663, at *2, 1989 U.S.Dist. LEXIS 14610, at *6 (N.D.N.Y. Dec. 18, 1989); cf. Riveria v. MAB Collections, Inc., 682 F.Supp. 174, 178 (W.D.N.Y.1988) (using "unsophisticated consumer" standard).

This standard has also been adopted by all federal appellate courts that have considered the issue. See Smith v. Transworld Systems, Inc., 953 F.2d 1025, 1028 (6th Cir.1992); Graziano v. Harrison, 950 F.2d 107, 111 (3d Cir.1991); Jeter v. Credit Bureau, Inc., 760 F.2d 1168, 1174-75 (11th Cir.1985); Baker v. G.C. Services Corp., 677 F.2d 775, 778 (9th Cir.1982). But see Blackwell v. Professional Business Services, of Georgia, Inc., 526 F.Supp. 535, 538 (N.D.Ga.1981) (applying "reasonable consumer" standard). We now adopt the least-sophisticated consumer standard for application in cases under § 1692e. In doing so, however, we examine in some detail the purposes served by this standard as well as the extent of the liability that it creates.

In addition, courts have found collection notices misleading where they employ formats or typefaces which tend to obscure important information that appears in the notice. See Baker, 677 F.2d at 778 (required information must be "large enough to be easily read and sufficiently prominent to be noticed"). Finally, courts have held that collection notices can be deceptive if they are open to more than one reasonable interpretation, at least one of which is inaccurate. See Dutton v. Wolhar, 809 F.Supp. 1130, 1141 (D.Del.1992) ("least sophisticated debtor is not charged with gleaning the more subtle of the two interpretations" of collection notice); Britton, 1989 WL 148663, at *2, at *6 (deceptiveness of collection notices "should be assessed in terms of the impression likely to be left on the unsophisticated consumer").

It should be emphasized that in crafting a norm that protects the naive and the credulous the courts have carefully preserved the concept of reasonableness. SeeRosa v. Gaynor, 784 F.Supp. 1, 3 (D.Conn. 1989) (FDCPA "does not extend to every bizarre or idiosyncratic interpretation" of a collection notice but "does reach a reasonable interpretation of a notice by even the least sophisticated"). Indeed, courts have consistently applied the least-sophisticated-consumer standard in a manner that protects debt collectors against liability for unreasonable misinterpretations of collection notices. One court has held, for example, that collection notices are not deceptive simply because certain essential information is conveyed implicitly rather than explicitly. See Transworld Systems, 953 F.2d at 1028-29 (collection notice that does not expressly inform debtors of right to contest portion of debt is not misleading, because that right is "implicit" in right to challenge entire debt). Other courts have held that even the "least sophisticated consumer" can be presumed to possess a rudimentary amount of information about the world and a willingness to read a collection notice with some care. See Johnson, 799 F.Supp. at 1306-07 (finding that "even the least sophisticated debtor knows that a `Revenue Department' may be part of a department store or other commercial creditor just as it may be a governmental body"); Gaetano v. Payco of Wisconsin, Inc., 774 F.Supp. 1404, 1411 (D.Conn.1990) (approving collection notice even though required disclosures were printed only on the back of the notice, since language on the front directed consumers to read the reverse).

It should be emphasized that the use of any false, deceptive, or misleading representation in a collection letter violates § 1692e— regardless of whether the representation in question violates a particular subsection of that provision. If one portion of the letter is deceptive, and another portion is not - the whole letter is deemed deceptive.

Federal Trade Commission v. Standard Education Society, 302 U.S. 112, 116, 58 S.Ct. 113, 115, 82 L.Ed. 141 (1937) (finding encyclopedia-selling scheme in violation of Federal Trade Commission Act). We subsequently sounded the same theme in our consumer-protection cases, holding that the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 41 et seq., was not made "`for the protection of experts, but for the public — that vast multitude which includes the ignorant, the unthinking and the credulous.'"  Charles of the Ritz Distributors Corp. v. Federal Trade Commission,143 F.2d 676, 679 (2d Cir.1944), quoting Florence Manufacturing Co. v. J.C. Dowd & Co., 178 F. 73, 75 (2d Cir.1910). This basic principle of consumer-protection law took on its modern formulation several years later, when we held that "in evaluating the tendency of language to deceive, the Federal Trade Commission should look not to the most sophisticated readers but rather to the least." Exposition Press, Inc. v. Federal Trade Commission, 295 F.2d 869, 872 (2d Cir.1961).

In recent years, as courts have incorporated the jurisprudence of the FTC Act into their interpretations of the FDCPA, the language of Exposition Press has gradually evolved into what we now know as the least-sophisticated-consumer standard. See, e.g., Jeter, 760 F.2d at 1174-75; Baker, 677 F.2d at 778.