Cassandra, This might interest you
Banks are prohibited from loaning. They can't loan other depositor's money because of the matching principle under GAAP. They can't loan out nor risk any of their own assets because of Federal Reserve regulations.
In order to accept a credit application or promissory note, the banks must convert the customer's note into a check and give it back to him. Only they can do this because they have a monopoly on negotiable instruments. It is the customer who creates the currency and funds the line of credit to himself. The customer is the depositor (creditor). The banks conceal this fact by carrying out what appears to be a loan approval process for each customer. There is no loan from the bank.
The object in defending yourself against a creditor that has not assigned the account to a debt collector is to manipulate the creditor into a new agreement and/or force the account into collections.
Send the creditor a notice of final payment with the expectation that the creditor will not dispute the payment or its terms in writing, thereby accepting it as payment in full. Do not write "payment in full" on the check or money order. Send only with first class mail because you do not want to draw attention to it. Get proof of delivery receipt if you want.
When the final payment is accepted, and the creditor has failed to respond or object to the notice of final payment, no claim against the account holder can be maintained.
In practice, the creditor will call you to ask about late payments. Make a record of the caller's name, company, mailing address, phone and fax numbers, date and time of call, and then request that the caller limit communication with you only to writing. Disconnect the call after you obtain this information and send a written correspondence making the same request.
If the calls continue, do this again or make a complaint with your state's attorney general's office.
In most cases, the creditor assigns the account to collections. Once this happens, the third party collection efforts are regulated under the Fair Debt Collections Practices Act.
The assignment of a debt without the consent of the debtor is null and void. If the creditor assigns, sells or transfers the rights to sue or collect to a third party, without the consent of the debtor, it will be a relinquishment of that right to sue or recover from damages.
The third party assignee usually has no agreement with the debtor, so in order to recover the loss that it chose to incur, it needs the debtor's consent. This is usually obtained by deceit, by tricking the debtor into accepting a new obligation.
Request a validation of the purported debt. Because the collector never provided any services or products, there is no obligation to pay.
When the collector responds with anything but some written agreement, evidence of your consent or evidence of consideration (e.g. payment) they have failed to validate.
Most collectors who receive this request will never pursue the collection.
Send a cease further communications notice only if it is quite obvious that the collector will not sue.
If the collector persists in ignoring your request for validation, a complaint to the Federal Trade Commission may be appropriate. Just listing the address for the FTC on the second notice is likely to get positive results.
Larry Kilburn
Big K Towing & Repair
