Consumer complaint received 2025-02-18 00:00:00
Product: Debt collection — I do not know
Issue: Written notification about debt — Didn't receive enough information to verify debt
Company: UPGRADE, INC.
State: IL

Complaint narrative:
Both Upgrade Inc. ( as a data furnisher ) and XXXX XXXX XXXX ( 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 XXXX U.S.C. XXXX, data furnishers like Upgrade and XXXX have strict obligations when reporting consumer debts to credit bureaus. Their violations include : A. Failure to Provide Accurate Information ( XXXX U.S.C. XXXX ( a ) ( XXXX ) ) Upgrade and XXXX 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 ( XXXX U.S.C. XXXX ( 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 ( XXXX U.S.C. XXXX ( a ) ( 3 ) ) When a consumer disputes a debt, the furnisher must notify credit bureaus that the debt is disputed. 
If Upgrade and XXXX 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 ( Metro 2 Compliance Violation ) XXXX was not licensed in Illinois until XX/XX/XXXX, 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, XXXX XXXX XXXX had legal obligations under the FDCPA ( XXXX U.S.C. XXXX ). Their violations include : A. Failure to Validate the Debt ( XXXX U.S.C. XXXX ( 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 ( XXXX U.S.C. XXXX ( 5 ) ) XXXX was not licensed in XXXX until XX/XX/XXXX, 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 : XXXX may be fined, sued, and forced to remove negative reporting. 

C. Making False or Misleading Representations ( XXXX U.S.C. XXXX ) 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 ( XXXX U.S.C. XXXX ) XXXX 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.

Company response to consumer: Closed with explanation