Here’s an example of financial services industry related poor decision making skills that create problems instead of helping to resolve them. The Department of Education’s business partner Action Financial Services, LLC contacted me in 2016 with a collection letter regarding alleged student loans. This case has been going on since 2011 and has produced ample of evidence that no loans exist. So, I requested debt validation from Action Financial Services, LLC. Just like it has been in the past in other similar situations, Action Financial Services, LLC did not provide any validation that would demonstrate that the disputed lending and borrowing transactions actually took place, that I actually received the allegedly borrowed money either directly or indirectly as tuition support, that any legally binding promissory note debt instruments exist in this case that meet the Uniform Commercial Code (UCC) requirements, and that the Department of Education is the legal owner of any alleged debt.
Now, in 2017, Action Financial Services, LLC contacted me again with another collection letter. So, I have to request debt validation again. However, as is specified below, during our communication processes Action Financial Services, LLC did also offer to perform financial services in the form of debt validation. So, if Action Financial Services, LLC again fails to provide the debt validation that I requested below, I have no choice but to hold this company liable for false advertising and breach of contract.
Rebecca L. Dillon, CEO
Action Financial Services, LLC
4894 N Runway Dr. Suite 103
Central Point, OR 97502
Dear Rebecca Dillon:
I am responding to your company’s letters and am requesting debt validation and not to be contacted by phone. This is an open letter that I may publish on StopExtortion.org and on other websites.
Your company has promised in writing to provide debt validation but so far has failed to do so. Despite of that, your company continues to make unvalidated monetary demands that are accompanied with threats.
It seems that your company’s employees are not taking their obligation to verify the debt seriously enough and are attempting to forcefully collect nonexistent debt. Accordingly, as is specified below, if your company fails to provide the requested debt validation, I will hold your company liable for false advertising and breach of contract.
However, I do believe that if your client, the Department of Education, is willing to be reasonable, we can find a constructive solution to this case. So, if your company wants to participate in finding a constructive solution to this case, please send a constructive written proposal for doing so. In the process, please keep in mind the following:
Thus, letters like the one dated 04/08/2017 that your company sent to me are not constructive. Such unvalidated monetary demands that are accompanied with threats do not benefit your company either, because now I must pursue this incident further as a debt validation case and I must hold your company liable if you fail to provide debt validation that you have promised to provide.
Further, please note that your company does not have any legal right to pursue collection activities in this case. I have already requested debt validation from your company and your company has failed to validate that the disputed lending and borrowing transactions actually took place, that I actually received the allegedly borrowed money either directly or indirectly as tuition support, that any legally binding promissory note debt instruments exist in this case that meet the Uniform Commercial Code (UCC) requirements, and that the Department of Education is the legal owner of any alleged debt.
That is, the material that you sent me does not validate that any loans and debt actually exists and that your company has the legitimate right to pursue collection activities.
The Department of Education creating internal records 12 years after I as a student graduated from college and doing so without existence of any lending and borrowing documents, without existence of any records or documents that would demonstrate that as a student I actually received the allegedly borrowed money, and without any documents that meet the Uniform Commercial Code (UCC) requirements for legally binding promissory note debt instruments, and without any fully legitimate documents that prove that the Department of Education is the legal owner of any alleged debt does not grant your company the legal right to pursue collection activities of non-existent debt regardless of any authorization that you may receive from the Department of Education.
I attended state owned Rhode Island College between 1990 and 1996 as an honors student. As far as I know, as a student I did not qualify for bank loans because I was in the U.S. on a temporary visa when I first attended college, and then on Green Card until graduation, without any credit history, co-signer or collateral. Further, initially I did not have any work experience and work history either. While I was a student my income was extremely low and did not support borrowing from a bank tens of thousands of dollars.
According to publicly accessible sources the in-state cost of tuition to attend the state owned Rhode Island College from 1990 to 1996 ranged from $1,703 to $2,838 a year. The Department of Education insists that I borrowed $46,354.00 as principal from Fleet National Bank. The amount of money that the Department of Education claims that I borrowed is several times higher than I possibly could have received as loans, even if I would have borrowed money. As a student, I did not live on campus. The Department of Education is unable to explain, how the $46,354.00 supposedly was used or where did it go. No relevant lending and borrowing related records exist that show that I actually borrowed this money and that I received it either directly, or indirectly, as tuition support.
I received Rhode Island College Honors Scholarship, Pell Grant and work-study financial aid that covered the cost of my attending Rhode Island College. The Department of Education does have information on this, but has knowingly forced me to work on this debt validation case for 5 (five) years against my will.
Please forward the enclosed invoice and letter to your client, the Department of Education. For 5 years your client has forced me to work in involuntary servitude conditions on this case that is intended to benefit the Department of Education financially and its employees professionally. In the process the Department of Education has been relying solely on the special powers granted to the Department of Education and has proceeded without furnishing proof that the actual lending and borrowing transactions have occurred and that I actually received the student loans in question either directly or indirectly, as tuition support.
I have invoiced your client for usage of my labor and will continue to do so. The Department of Education has not disputed the validity of this debt. Due to your client’s failure to honor its obligation to pay for usage of my labor, the entire unpaid invoiced balance is due and payable immediately.
I am thereby instructing your company’s representatives not to contact me by phone. Any communication with me must be handled by mail. Do not call me and do not contact any third parties such as my employer, neighbors, friends or family members.
Please note that failure to comply with the above may be a violation of State and Federal Fair Debt Collection Practices Acts and/or other statutes, and may also be grounds for civil action, regulatory sanction, and/or other action. Further, release, transfer, and/or disclosure of personal information such as phone number, address and/or other privileged, confidential, and/or private personal data may be a violation of Massachusetts debt collection laws and regulations, such as MGL c. 93, s. 49: Debt collection in an unfair, deceptive or unreasonable manner, 209 CMR 18: Conduct of the Business of Debt Collectors and Loan Services, and 940 CMR 7.00: Debt Collection Regulations (Current).
I dispute the validity of the debt in entirety and every portion of it. This is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and debt validation is requested.
Your client, the Department of Education, claims that it holds legally binding promissory notes. Your client is responsible for validating such claims and the corresponding monetary demands. In accordance with case law, (citing)
Please note that the above citation is applicable to the time period during which I attended college and the alleged loans were made. Accordingly, I request that your client furnishes copies of the following documents:
Based on the available information, qualifying Promissory Note documents in this case do not exist at all, and your client does not have even the original two-sided (duplex) financial aid Application and Promissory Note documents in its possession. Thus, based on the available information, your client has partial copies of irrelevant documents, created internal records and now claims ownership of an alleged debt.
Further, based on the available information, the “loan” records were created after I graduated from college, by picking approximately 80% of the amounts from the financial aid applications, without existence of the corresponding lending and borrowing transactions and the relevant documents. Such internal record creating does not create debt.
I have requested debt validation in this case since December of 2011. Your client has repeatedly failed to validate that (1) I received student loans and that any debt actually exists, and (2) that your client holds valid legally binding promissory note debt instruments, and (3) that your client is the legal owner of the alleged debt.
If you and your client are unable to validate the debt as requested above within 30 days of your receipt of this letter, you and your client must stop making any further monetary demands and state in writing that the Department of Education will not under any circumstances make any further demands regarding the specific previously claimed alleged debt, and will not authorize any individual, company, organization or institution to make any kinds of further demands regarding the specific previously claimed alleged debt.
Please furnish the requested debt validation documents by 06/01/2017. For each listed debt validation item for which the requested documents do not exist, please state separately in writing that the requested documents do not exist.
Your company can fulfil its obligations in one of the following three ways:
If by the deadline stated above you fail to furnish either the requested debt validation documents or the requested written statements, I will hold your company liable for false advertising and breach of contract on the grounds specified below.
The letter dated 06/28/2016 that your company sent to me lists monetary demands and states the following:
Further, the same letter also states what your company’s fees are regarding this case.
Within 30 days from receiving the above letter I did notify your office in writing that I dispute the validity of this debt and requested debt validation. Your office received this debt validation request on 07/27/2016. Yet, your office has not obtained and sent me verification of the debt. Instead, your company sent me partial copies of financial aid applications and other similarly irrelevant material.
Further, please note that with the letter that your company sent, your company made an unconditional promise to provide financial services in the form or debt validation, which also qualifies as a contract.
So, if your company in response to this debt validation request once again will send me partial copies of financial aid applications without furnishing qualifying proof that I ever actually received any of the alleged loans, then your company clearly is not providing verification of the alleged debt. Filling in financial aid applications and receiving bank loans are two different sets of financial transactions. Further, the alleged loan principal is about 20 times higher than was the cost of the relevant average annual tuition, and I received Rhode Island College Honors Scholarship, Pell Grant and work-study financial aid that covered the cost of my attending college.
Thus, without furnishing the relevant debt validation and without clear indication that your company actually tried to obtain and furnish the relevant debt validation, your company is liable for false advertising and breach of contract.
Further, if your company in any way participates in reporting the unvalidated loan records to a credit bureau as if these were actual loans in collection, I will hold your company responsible as accessory to extortion attempts that are enforced through usage of fabricated documents, involuntary servitude, harassment, abuse of power and bullying. Resolving these charges will become a much longer process than other alternatives for handling this case will be.