The Fundamentals...

I'm not an expert by any means, but I've had cause to do a lot of research over the past year. I'll try and be concise as possible to conserve space, but will provide links to resources that I've found very valuable...

CREDIT REPORTING

As is commonly known by credit-saavy consumers, there are 3 major consumer credit bureaus: Equifax, Experian and TransUnion. All three bureaus keep a database of information acquired from companies that pay them a membership fee (their subscriber base). These can be companies like your mortgage lender, your credit card issuer, your utility company, or when things get bad financially - debt collectors.

It all starts out when you apply for credit. Most times a lender will want to pull a credit report from one or all three bureaus in order to gauge your "credit-worthiness". This report contains information on what kind of credit has been extended to you, what your payment history is like, how much you currently owe, or where you've been shopping for credit.

For those that have been unfortunate or irresponsible with their finances, it will also contain information on any bankruptcies, debt judgements and collection accounts. A collection account gets reported to a person's credit report after a debt goes into default and gets charged off by the original creditor. An outstanding debt can then either 1) be assigned to an internal collections company or a third-party collections company, or 2) be sold to a debt purchaser that makes a living by collecting on defaulted debt. But bear in mind that a defaulted debt purchaser is STILL a debt collector in the eyes of federal and most state laws (and supported by caselaw) and is subject to following those laws while reporting and collecting debts.

THE FAIR CREDIT REPORTING ACT

When reporting a debt on a consumer's credit report, debt collectors are considered "data furnishers" and must follow the mandates of the Fair Credit Reporting Act. This law regulates exactly how a credit report can be used, what types of information can be reported (and for HOW LONG), as well as stipulates exactly how a data furnisher should handle consumer disputes.

The law provides consumers with a measure of protection against inaccuracies and fraudulent credit reporting, by mandating accuracy in reporting and by giving consumers the right to sue the pants off of companies that violate the law.

THE FAIR DEBT COLLECTIONS PRACTICES ACT

When "collecting" on a debt, debt collectors must follow the mandates of the Fair Debt Collection Practices Act, which sets guidelines on exactly what a debt collector CAN and CAN NOT do while attempting to collect a debt.

Among the many mandates, a debt collector may not do things like: be untruthful with you or misrepresent themselves to you, harrass you, threaten you with actions that they can't legally take, or make inconvenient telephone calls to you at your home or work. It also stipulates that they have to provide you, in a timely fashion, with certain legal notices that inform you of your right to dispute the debt and how to go about doing it.

Here again, the law provides consumers with the right to sue violating companies in federal court.

STATE LAWS

Each state offers its own set of consumer protections that can govern such things as: when a consumer CAN and CAN'T be sued and made to pay an outstanding debt, called the Statute of Limitations; state licensure and bonding regulations; debt collection practices and credit reporting practices.

The list is far too vast to detail, but a great resource to start your research can be found at Lawdog.com.

Now on to the part where I show you how Sherman, LVNV and Resurgent violated these federal and state mandates...

A Dark Day...

Well, it all started out on September 22, 2005, when I pulled up my 3 credit reports from Suze Orman's FICO Kit at http://www.myfico.com/ . Upon reviewing my reports, I knew I was in WAY over my head! There were accounts that I didn't recognize and accounts that I knew were wrong, and personal information that was completely off-track.

The nice thing about Suze's package is that her online software will walk you through disputing any information on your report. Well, needless to say, I had quite a few disputes - one of which happened to be for a company listed on my report as LVNVFUNDG. The funny thing about it was that it appeared under the regular accounts section of my Equifax report (along with all of my currently revolving accounts) as an "Open" account that was 120+ days past due, and NOT in the collection accounts section.

So, I'm thinking to myself....this has got to be wrong (right?)....so I do a little investigation and come up with a sensible answer. This LVNVFUNDG is obviously making some sort of mistake in their reporting. Their reported "Credit Limit" matched a charged-off credit card balance dating back to a card from 1999. However, I never opened an account with LVNVFUNDG directly and the original creditor still appeared on my report. So, I figured they were just reporting the account as a current derogatory by mistake.

I took it upon myself to notify Equifax of their error via a letter [show 9/22 dispute letter] dated the same day, specifically stating that the LVNVFUNDG account must be a duplicate (since the original creditor still appeared). I have 30 days of waiting for my dispute results, so in the meantime I do a little investigating about this account holder and discover their name was really LVNV Funding LLC out of Houston, Texas and they were tied in some way to Sherman Acquisitions, LP. This was confirmed by pulling an online copy of my credit report directly from Equifax's website. This report showed a lot more detail and listed specific contact information for the data furnisher. Funny thing was that LVNV Funding was showing up as the account holder in the Summary [insert pg 3 from 10/13 rpt], but back where the account detail was it showed up as a Sherman Acquisition, LP account.....hmmmmm.

Being the detail-oriented person that I am, I send a letter [show 10/7 letter to Sherman] to Sherman Acquistion dba LVNV Funding (just to cover all the bases) at the Houston, Texas address listed on my report. Within the letter, I dispute the validity of the debt and requested that they either forward validation of the account to my attention, or delete the account off of my credit report. I figure that there's NO WAY this company could be in their right mind by reporting a collection account as something that is currently past due. It's gotta be an error that they will rectify just as soon as I let them know of their mistake. YEAH, RIGHT!

To be continued...