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My letter to LHR regarding its refusal to investigate my client’s collection dispute

Just when I thought I’d seen it all. 

I’m getting used to collectors sending letters demanding documentation INSTEAD of complying with the FDCPA. 

They should cease collecting UNTIL they validated the collections after receiving disputes.

Credit reporting is a collection activity.

Collectors rarely verify with the credit bureaus without notice of dispute anymore and it is shocking to see LHR categorically refusing to investigate that an account was paid or settled unless the consumer provides proof.  And that is ABSURD, since the FDCPA clearly states that the collector needs to validate the account after receipt of the dispute. 

Maybe a payment was not properly applied.

It’s amazing how creditors and collectors can make “mistakes” when calculating balances.

So I called LHR last week and I spoke with Noelle Polk.  She claimed to be the manager and INSISTED that “the law” requires consumers to provide proof of payment.  Obviously, I strongly disagree.

Ms. Polk told me that they “researched” me after receiving my power of attorney and they “know all about me”, including that I’m “new” to the business and don’t know what I’m doing. 

So, instead of investigating the consumer disputes, LHR takes the time to “investigate” the people/companies submitting their power of attorney.  You have to be a real genius to not know who I am and what I do even if you spend only 20 seconds searching the web.

From the LHR website:

LHR Inc. named as one of the 5000 fastest growing private companies in America

As usually, the most corrupt companies are successful.  How can a collector who COMPLIES with the law stay in business when most of the large collectors and debt buyers don’t give a rat’s ass about the law?

Of course they can afford to pay more for debts or work for lower commissions when they harass and intimidate consumers into paying and destroy their credit with no regard for the law.

It is so PROFITABLE to ignore the Fair Debt Collection Practices Act and the Fair Credit Reporting Act.

I wish I had started the new FTC complaint site a lot sooner.

I sued IC System, but I doubt that they changed their collection practices.

NCO made the $2,500 offer of judgment, but they’re not going to change who they sell credit reports to over $2,500.  NCO ignored my demand letter for running my credit and I expect NCO to continue to ignore demand letters.  Too few people file the lawsuits.  It’s more profitable to ignore the law.

So I really hope that the “Obama FTC” will start issuing opinion letters again and that the FTC will INVESTIGATE complaints about SYSTEMIC violations.

Here’s my fax to LHR manager Noelle Polk:

Via fax to 716-648-3484 – 3 pages including cover

May 4, 2009

Re: LHR refusal to investigate consumer disputes ([client info redacted])

Dear Ms. Polk,

I spoke with you on 4/29/09 regarding the LHR verification of a collection with the credit bureaus after receipt of my client’s dispute and this letter serves to confirm our conversation and the LHR debt collection and credit reporting practices.

ISSUES:

1. You stated that my client’s dispute was not sufficient to warrant your investigation and that you deliberately verified the account with the credit bureaus without notice of dispute.

However, I’m not aware of a minimum number of words or that any documentation has to be provided with a consumer dispute to require collectors to validate the account as per the FDCPA.

2. You insisted that consumers must prove that they paid the accounts before you investigate.

In this particular case, payment was made to another collector years ago and once my client has the information about the identity of the collector who sold the account to you, her attorney can request the documents from the seller through discovery and hopefully obtain a judgment for fraud against the seller as well as against LHR for the numerous willful violations of the FDCPA and the FCRA.

Additionally, a consumer’s sworn testimony regarding payment or settlement ought to be sufficient in the courts as it is well established that collectors frequently sell paid/settled accounts for collection to debt buyers.

3. The 4/3/09 LHR letter states:

”… Please be advised that we placed your account referenced above with our Dispute Department for investigation for a period of thirty (30) days from the date of this letter.  In that interim period, we will update our trade line with the Credit Bureaus to reflect the account as disputed.

If we do not receive information from you within the thirty (30) day timeframe, we will terminate the disputes [sic] investigation pertaining to this account and our company will no longer treat this account as a disputed account. …”

Contrary to the promise in the 4/3/09 LHR letter, the account was NOT reported as disputed according to the credit reports provided by the credit bureaus.

Ms. Polk, you stated that “the law” requires that consumers provide proof of payment.

Which law is this?

I do NOT believe that a consumer has to provide proof of payment to a debt buyer to warrant an investigation.

Many people don’t keep proof of payment because they don’t know that collectors often sell paid or settled accounts for collection.  MILLIONS have lost their homes, their jobs and just about everything they own.  Houses burn down, are flooded and blown away. 

Even the IRS requires only 3 years of records!

How could one expect consumers to have proof of payments many years ago?

Even IF the consumer actually owes the debt, chain of title MUST be established. 

I recommend you read the 4/17/09 New Jersey court of appeals ruling in Palisades Collection v. Graubart, posted at http://creditfactors.com/faq/kb-faq/file/19/1/

In my opinion, LHR should have provided all available information about the account and of course the identity of the SELLER of the account.

Even if no payment had been made after the account became a collection, the LHR credit reporting can not possibly be correct.  My client never had a $6,500 account with BofA and she certainly has no INSTALLMENT loan with LHR, as reported to Experian.

So maybe this is NOT my client’s account at all.

Please immediately:

1. remove this collection from all credit bureaus
2. provide ALL available documentation for this account
3. provide ALL documentation related to the account purchase.

Please advise of any inaccuracies in this letter by Friday, 5/8/09.

Should I not hear from you, I will assume that my statements and conclusions about the LHR collection practices are factual. I will request that the credit bureaus terminate the LHR account and I will submit my complaint to the FTC, requesting an investigation and an opinion letter.  Please see http://credit-reporting-collection-ftc-complaints.info/ for more information about my regulatory and legislative efforts.

Additionally, I will recommend that my client retain an attorney.

Please contact me by fax or email as time is of essence and I do not enjoy the luxury of postal service at my home/office.

Sincerely,

Christine Baker

c: posted at [this URL] and at other websites

I wonder if there’s anyone at LHR who knows what a FTC opinion letter is.  That’s the pre Bush era.  If you search my OLD forums, you’ll see how those FTC letters really helped consumers and collectors/creditors determine how the law should be interpreted.

LHR manager Noelle Polk really shot herself in the foot when she treated me like an idiot, like any consumer who spent 2 hours reading the free forums and has no clue.

I didn’t even charge my client for the work since the call last week because I took Ms. Polk’s insults personal.  It’ll be a lot more work preparing the LHR letter and credit reporting for posting and explaining what all is wrong (unfortunately a LOT!), but hopefully OTHERS and their ATTORNEYS will find it helpful.  I’ll have to dig up the ruling about the LVNV incorrect reporting of “installment” too.  A collection is no installment loan.

Also, all of you with collections please read the Palisades v. Graubart ruling.

It’s not only about the chain of title (whether the collector can PROVE that it has the right to collect the account), but in the lower court it was already established that Palisades could only document $15,000 of the about $30,000 it was suing for. 

Most debt buyers report amounts FAR in excess of what’s legally collectible to the credit bureaus.  That’s of course because most people are HAPPY to get a discount when they settle.  For example, they report that you owe $10k and then offer to settle for $5k and most people think that’s such a wonderful deal.  In fact, they may really only owe $5k and the collector only paid about $100 or so for the debt.  That’s why many collections can be settled for 10-20%. The collectors are still making a killing.

But, why settle?

A PAID collection reported as such to the credit bureaus will not give you a single FICO score point.

It’s been a LONG time since I settled with a debt buyer and unless it’s for deletion, there’s simply no reason to throw away your money. 

Support your favorite charity instead of a vile collector.

If I don’t hear from LHR next week, there’s no need to contact it with the draft FTC complaint.  However, I’ll notify the credit bureaus of the LHR malicious credit reporting of disputed collections and I’ll request that they TERMINATE LHR for their willful violations of the FCRA and FDCPA.  Most likely, the FTC complaint will be about LHR and the credit bureaus’ refusal to terminate collectors who violate the FDCPA and FCRA.  If you’ve been following my CRA litigation and the DeVry FTC complaint, you know the drill.