Product: Debt collection

Both XXXX XXXX ( as a data furnisher ) and Velocity Investments LLC ( as a debt collector and data furnisher ) violated multiple federal laws by failing to validate the debt upon request while continuing to report and attempt collection. 

1. FCRA ( Fair Credit Reporting Act ) Violations Under 15 U.S.C. 1681s-2, data furnishers like XXXX and Velocity have strict obligations when reporting consumer debts to credit bureaus. Their violations include : A. Failure to Provide Accurate Information ( 15 U.S.C. 1681s-2 ( a ) ( 1 ) ) XXXX and Velocity reported an invalid or unverified debt, violating their duty to ensure the accuracy of reported information. 
Penalty : Civil liability and potential damages for willful violations. 

B. Duty to Investigate and Correct Errors ( 15 U.S.C. 1681s-2 ( b ) ) Once a consumer disputes a debt, the furnisher must conduct a reasonable investigation and provide evidence supporting the debts validity. 
They failed to validate the debt upon request and continued reporting. 
Penalty : Each instance of failure to investigate can lead to actual damages, statutory damages ( {$1000.00} per violation ), and punitive damages for willful violations.

C. Failure to Notify Credit Bureaus of a Dispute ( 15 U.S.C. 1681s-2 ( a ) ( 3 ) ) When a consumer disputes a debt, the furnisher must notify credit bureaus that the debt is disputed. 
If XXXX and Velocity continued reporting the debt without marking it as disputed, this violates FCRA. 
Penalty : Civil liability and possible FTC or CFPB enforcement action. 

D. Reporting a Debt That Can not Be Legally Collected ( XXXX XXXX Compliance Violation ) Velocity was not licensed in Illinois until XX/XX/year>, yet they reported and attempted to collect the debt before obtaining legal authorization. 
Penalty : Removal of tradeline, damages, and possible fines from state and federal regulators. 

2. FDCPA ( Fair Debt Collection Practices Act ) Violations As a debt collector, Velocity Investments LLC had legal obligations under the FDCPA ( 15 U.S.C. 1692 ). Their violations include : A. Failure to Validate the Debt ( 15 U.S.C. 1692g ( b ) ) Once a consumer requests debt validation, a debt collector must cease collection until they provide sufficient proof of the debt. 
Velocity failed to validate the debt but continued collection efforts. 
Penalty : Up to {$1000.00} per violation in statutory damages, plus actual and punitive damages. 

B. Attempting to Collect a Debt Without Legal Authorization ( 15 U.S.C. 1692e ( 5 ) ) Velocity was not licensed in Illinois until XX/XX/year>, but they attempted to collect the debt before that. 
Unlicensed debt collection is illegal, and falsely representing they had the right to collect is a violation of FDCPA. 
Penalty : Velocity may be fined, sued, and forced to remove negative reporting.

C. Making False or Misleading Representations ( 15 U.S.C. 1692e ) Debt collectors can not misrepresent the status of a debtwhich includes reporting a debt as valid when it is not.

Penalty : Up to {$1000.00} per violation plus additional damages.

D. Continuing to Report or Collect After a Dispute ( 15 U.S.C. 1692f ) Velocity continued reporting the debt despite lacking proper validation.

Penalty : Removal of the debt from credit reports and monetary damages.

See Pre-Arbitration Settlement Demand Letter enclosed in the attachments. You have 5-10 business days to accept.