Debt Validation - First Bank of Delaware/Praxis
Date: Fri, 03/18/2011 - 07:07
I had taken out an installment loan with First Bank of Delaware for $500. From what I recall, according to the terms of the contract, I paid $80 every other week (for a total of around $1000). I took this early in 2010, so the details are fuzzy. Near the end of my pay-off time (I believe I only had one or two payments left - I already paid close to at least $800), I revoked my ACH because of fraud on my account (due to another payday lender). I am sure the most I could have owed at this time was $60-$100 (even though I had already paid back the entire principal amount - not sure these types of loans are even legal in Nebraska).
That being said, I don't know for sure whether the $60-$100 was paid off because I never received a phone call or letter or anything from First Bank of Delaware. I assumed this entire matter was settled last August/Sept of 2010.
Then, in Feb 2011, I received a letter from Praxis Financial indicating that the debt had been sold to them from "Think Cash/FBD". The said I owed $490. I sent a debt validation letter (certified mail with return receipt requested) asking for the noraml things (and specifically a breakdown of how they arrived with the dollar amount they did). (Of course, in the mean time, their collection agents have not stopped calling me at work - annoying!).
I received the return receipt back a few days ago. I know I have to give them sufficient time to answer the request - but how long is that usually? 30 days? If they don't respond, what are the next steps? Do I give them a 2nd chance letter to respond? Or just "demand" that they remove it from my credit report?
Thanks for any help!
Debt Validation - First Bank of Delaware/Praxis
The Debt Validation Strategy
If the debt is not past the statute of limitations, send a letter requesting validation to the collection agency.
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 one of the following:
Proof that the collection company owns the debt/or has been assigned the debt,
Copies of statements from the original creditor
Copy of the original signed loan agreement or credit card application
is satisfactory.
If they haven't sent you satisfactory proof, and are still reporting this on your report, 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).
Wait 15-20 days to hear back after this second letter to the collection agency. They will either remove it or not respond.
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. Not all states require licensing.
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.
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.
File a lawsuit in small claims court against the collection agency on the basis of violating the FDCPA.
Have the papers served to the collection agency. (You can find a paper server on the internet for about $25). In the meantime, in a parallel effort with your lawsuit against the collection agency:
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.
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.
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. Theyare teetering on the edge of "willful non-compliance" under the FCRA. Tell them so.
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.
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.
Notify the bureaus that you are suing them. 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.
Think Cash was an installment loan lender and are legal. What m
Think Cash was an installment loan lender and are legal. What most likely happened is that interest on the unpaid balance has accumulated and they turned it over to a collection agency. You can request validation as the post stated above to give you time to secure the funds to pay them. Possibly you can work out a settlement with the collection agency, but this is a legal debt.
This is your fault
this isn't really a question is it? Here is the obvious! First, you admit to taking out a loan, and paid majority of the loan as scheduled. Why ask them to provide validation of debt? Then you admit to only having only two payment left of although you stopped payment on your scheduled ach payment due to anothers company fraud you didn't feel the need to pay your final balance or make other arrangements. Now after repaying 95% of the loan you are asking if it's legal in your state? All loans incur interest, whatever the terms you agreed to them and the last two payment incurred late fees and now the balance is over $400.00 . This could have been resolved by just calling the company early on. This is no one's fault but yours the consumer:rolleyes:.
Pay your bills.
Validation of debt letters to First Bank of Delaware is a COMPLETE waste of time. This letter is for collection agencies. They are not a collections agency. they have the right to collect on there debts owed to them. If you waste time going to court on this you will look like a complete idiot. The judge will see you loan disclosure you signed personally or electronically, all your payments being deducted from your account with all your personal information and it will definitely cost you more than you last payment.Call them and make payment arrangements for goodness sakes!!!