In Alabama, there’s a problem with debt collectors who knowingly put false information on to consumers’ credit reports which violates Section 1692e8 (sometimes written as 1692e(8)) of the FDCPA (Fair Debt Collection Practices Act).
There are also debt collectors who may claim to not know that they’re reporting falsely, but if they had common sense they would know that what they’re reporting isn’t accurate. Section 1692e(8) also prohibits this type of bad conduct.
A 1692e(8) violation under the FDCPA allows us to sue debt collectors for false credit reporting.
This part of the law tells debt collectors not to falsely report, or report something that they should know is false.
Let’s say a consumer disputes an account.
If the debt collector is going to report, then they need to tell the credit bureau that they need to report that the account has been “disputed.”
Otherwise, the debt collector is breaking the law.
Why is this important?
Usually, if we’re dealing with credit reporting errors, we would file a lawsuit under the FCRA, or Fair Credit Reporting Act.
If we do this, however, it requires us to dispute through the credit bureaus first, then the credit bureaus will notify whoever gave them that information.
The people who give (or furnish) that information are called the furnishers. A debt collector is a furnisher if the debt collector provides reporting information on you to the credit reporting agencies (Equifax, Experian, Transunion, etc).
If we use the FCRA, the only way we will be able to sue the debt collector is if they don’t fix our reports.
This becomes a problem when you’re dealing with debt collectors who insist on falsely reporting on your credit.
Their idea is to do all of this false credit reporting, which most people won’t know about.
Even if they did know, most of them wouldn’t do anything about it.
Since that’s the case, the debt collectors think they will get a bunch of money that they’re not even entitled to.
They’ll get “pure profit,” as they call it.
Then, if the consumer disputes it through the credit bureau, they’ll take it off of the credit report so that they won’t be sued. So in the dark places in their heart, they think they have “gamed” the system to never be sued. All reward and no risk, right?
Well, not quite because of Section 1692e(8)….
The FDCPA tells consumers that there’s another path to make sure these debt collectors follow the rules.
If they know that they’re reporting falsely, or they should know that what they’re doing is false, then they will be sued because of it.
Let’s say that they send us a letter that says, “If you pay us $1,000, then you won’t owe us any more money.”
We pay them money, and we think the issue goes away.
Six months later, the debt collector is saying that we owe them $1,000.
When we dispute this and remind them of our agreement, they say, “Oh, well we didn’t do this intentionally.”
Well, they didn’t do this on accident either.
So when we see false credit reporting where there is no valid excuse, we need to look at suing.
Here’s another example from a recent case.
A debt buyer (LVNV) sued us and agreed to drop the case with prejudice. This means the case is over and we did not owe the money.
The debt buyer LVNV decided to start credit reporting on this debt that it lost on in court. And to send the account (that was not owed) to a debt collector.
So we could have disputed under the FCRA but we knew that LVNV knew what it was doing so we sued under the FDCPA.
Section 1692e8 of the FDCPA is important because it provides a more direct way to deal with these abusive debt collectors.
With this option, the debt collectors can’t hide behind the credit bureaus anymore.
The FDCPA says they we can go after them the second they do false credit reporting when they know what they are doing or should know.
If you have any questions and you live in the state of Alabama, you can reach us by phone at 1-205-879-2447.
I look forward to hearing from you!
Have a great day.