Why Is LVNV Funding Calling Me?

LVNV is one of the largest debt-buying firms in the United States. LVNV primarily buys credit card debt and debts from finance companies. If you fail to pay LVNV, it will usually sue you in small claims court. After that, companies like LVNV will get a wage garnishment against you or take money out of your bank account. 

LVNV is only fifteen years old. LVNV is involved with a large web of different LLCs, limited partnerships, and corporations. Most of these companies were founded between 2005 and 2008.

LVNV Funding LLC Is Calling to Collect a Debt

LVNV Funding, LLC is a debt-buying firm. It specialized in buying charged-off debts from original creditors. LVNV is an unusual company for many reasons. Though the name suggests that it is a Las Vegas company, it's actually located in Greenville, SC. According to Bizapedia LVNV shares an address with eighteen other companies. These companies that have one location and one president are organized as LLCs under the laws of several different states. It is right to be suspicious of such a company, but there are probably a couple of legal reasons for this. 

The first is to shield different parts of the enterprise from the liability caused by another part of the enterprise. This may also be the reason that the debt-buying firm, LVNV, and the collection administration firm,  Resurgent Capital Services, LP, are separate entities. Even though these are separate companies, the President of LVNV and the manager of Resurgent are the same person. Besides these jobs, the same man is listed as CEO of Sherman Financial Group located in New York. This court document shows a small part of the tangled web of different entities from Sherman to LVNV to Resurgent to several other entities. It's worth noting that at least two of the top executives in this web of companies live in Charleston, SC. It appears these guys have long commutes to work every day.

The second reason for this tangled web of companies is to hide who owns the companies. This is legal, but one has to wonder why a group would go to such lengths to hide their true owners. 

LVNV outsources it's collection activities to the related entity known as Resurgent Capital. A good guess for why they do this is to separate the high liability collections business from the debt buying investors at LVNV. Large amounts of money are probably kept at LVNV for the purposes of buying debts across America. On the other hand, the only money at the collection agency part of the group is probably enough to pay the expenses of the businesses. Many of the debt collectors that make phone calls are lower-wage workers.

How Do Debt Collection Agencies Work?

LVNV is a third party debt buyer. It buys charged-off debts from the original creditors such as credit card companies. When a company buys your debt from another company, they have the same rights to collect as the original creditor. Since the debt is charged off, companies such as LVNV are able to buy these debts for pennies on the dollar. Even though these companies only pay pennies for these debts, they are able to collect the full amount of the debt. This is a very profitable business. The founder of the company that owns the company that owns LVNV is listed as being worth $3 billion on his Wikipedia page. That ultimate "owning" company was only founded in 1998 and LVNV was formed in 2005. LVNV is one of the top filers of debt collection lawsuits in America. LVNV along with its associated companies are among the largest debt-buying outfits in America. Associated companies are companies that own each other or have the same management teams.

LVNV will sue you, but it uses other associated companies such as Resurgent Capital to call you and send you collection letters. Resurgent Capital may hand off some of these collection efforts to other associated companies. LVNV, the debt buyer, and Resurgent, the collection agency, are both third-party debt collectors. Since neither is the original creditor, they are both subject to the Fair Debt Collection Practices Act (FDCPA).

Your Rights Against Harassment by Debt Collectors

The FDCPA protects you from certain illegal debt collection practices. Many states have a similar law. The New York Attorney General's office has pursued LVNV's related entity, Sherman Financial for many violations. The Attorney General fined Sherman for filing lawsuits for debts that it didn't have the legal right to collect. Check out this press release for more on that legal action. It should be noted that debts that are time-barred by the statute of limitations are debts for which there is no legal right to collect.

The FDCPA prevents third-party debt collectors who are attempting to collect consumer debt from:

• Calling you outside of the hours between 8:00 AM and 9:00 PM and,  

• Harassing you and,  

• Contacting you if you are represented by an attorney or a law firm and,  

• Contacting you if you give written notice not to contact you.

The FDCPA also requires debt collectors to provide you with written notice of the creditor they are collecting for, the amount owed, and that you can dispute the debt within thirty days of the receipt of the notice from the collector. The letter must also inform you that you can request the name and address of the original creditor if it's different from the current creditor. 

If you do dispute the debt within thirty days of receiving the letter, the debt collector must stop contacting you until they have verified the debt. If you dispute the debt after the thirty day period, the collector can continue to contact you, but still must verify the debt. 

It's a good idea to send your written request via certified mail with a return receipt requested. Doing this will provide proof of the dates for any subsequent legal proceeding. The CFPB has this collection of sample letters that you can use for your written response to the debt collector.

One interesting question is what constitutes harassment for purposes of the FDCPA? Some examples of harassment^[1]that are mentioned on the CFPB website include:

• Repetitious phone calls that are intended to annoy, abuse, or harass you or any person answering the phone  

• Obscene or profane language  

• Threats of violence or harm  

• Publishing lists of people who refuse to pay their debts (this does not include reporting information to a credit reporting company)  

• Calling you without telling you who they are

The FDCPA also prevents the debt collector from engaging in false, deceptive, or misleading practices. Some examples provided on the CFPB website of misleading behavior by the debt collector include: 

• Lying about the amount owed.  

• The debt collector saying they're an attorney or law firm when they're not.  

• False threats to have you arrested.  

• Threats to do things that can't legally be done.  

• Threats to do things that the debt collector has no intention of doing.  

If a debt collector violates the FDCPA, you can sue the collector. If you think you have suffered from improper collection practices, you need to contact a consumer law firm that specializes in lawsuits against debt collectors. These attorneys can be found on the website of the National Association of Consumer Advocates.

Collection Accounts on Your Credit Report

15 U.S. Code § 1681c(a)(4) says,  "No credit reporting company may report accounts placed for collection or charged to profit and loss which antedate the report by more than seven years." This raises the question, when does the seven-year period begin to run? Do the seven years start again when the debt is bought by a debt-buyer? The answer is that the seven years begins to run from the date of the delinquency that caused the negative notation on your credit report. The seven years don’t start over when a debt buyer such as LVNV buys your debt. 

It's important to check your credit report at least once a year. The Fair Credit Reporting Act (FCRA) requires the credit bureaus to provide you with a free credit report at least once per year. Putting old debts on credit reports has been a common tactic debt-buyers use to collect a debt. If this happens to you, you need to do some credit repair by disputing these items with the credit bureaus. The best method to dispute errors on credit reports is to send a written letter via certified mail. This method provides better evidence should you decide to pursue legal action. You might be able to sue both the debt collector and/or credit bureau under the FDCPA and/or Fair Credit Reporting Act (FCRA).

Note that both Chapter 7 and Chapter 13 bankruptcies are subject to be reported up to ten years under the FCRA instead of the usual seven years. All three of the major credit bureaus have a policy of reporting a Chapter 13 for only seven years. Yet, the law allows the credit bureaus to change their policies at any time. The ten years allowed by law begins with the filing date of the bankruptcy. It's important to realize that though bankruptcies can stay on your credit report for up to ten years, bankruptcies dramatically improve your financial situation by eliminating your debts. This improvement in your financial situation usually leads to having a better credit score a year after filing for bankruptcy than the credit score you had on the day before you filed for bankruptcy.

Conclusion

Even though they are a shady organization, LVNV generally has the legal right to sue you if they properly own your debt. If LVNV, Resurgent, or any other debt collector is attempting to collect from you, it's time to look at potential debt solutions. The solution could be a debt consolidation, debt management plan, debt settlement, or bankruptcy. A good place to start with your quest for debt relief is a free consultation with a non-profit credit counseling agency. These credit counselors can help you decide on the best solution for you.

If bankruptcy is the best solution for you, Upsolve is here to help you. If your case calls for a straight-forward simple Chapter 7 bankruptcy, Upsolve has a free tool to help you file your own bankruptcy. In more complex cases that require an attorney, Upsolve can help you find a bankruptcy attorney in your area.