If you have received a notice about a debt from DNF Associates LLC or have seen a credit report entry from this company, you are not alone. Many consumers are caught off guard by a debt they don't remember or recognize.
Let's explore what you need to know about DNF Associates and how to approach this situation.
What is DNF Associates LLC?
DNF Associates, which also operates as Diverse Funding Associates, is a debt purchasing company. They do not lend money or issue credit directly. Instead, they purchase debts that are charged-off, meaning they have gone unpaid for so long the original creditor no longer expects to collect them.
DNF Associates buys these debts at a significant discount and then attempts to collect the full amount from consumers. They also profit from suing consumers and obtaining judgments against them.
Contact Information for DNF Associates LLC
Company Name: DNF Associates LLC (also known as Diverse Funding Associates, LLC)
Address: 2351 North Forest Road, Suite 110, Getzville, NY 14068
Phone Number: (716) 901-0748
Toll-Free Number: 1-855-366-8584
Compliance Email: dmaczka@diversefundingllc.com
Years in Operation: Since 2004, incorporated as DNF Associates LLC in 2014
BBB Rating: B (1.0 out of 5 stars from customer reviews)
Industry: Debt Buyer
What's the Record on DNF Associates?
Over the past three years, DNF Associates has had 135 complaints filed against it with the Better Business Bureau (BBB), with 42 of these complaints occurring in the past year. Only 8 of these complaints were successfully resolved. That equates to a resolution rate of 5.9%. The vast majority of consumers who filed complaints against DNF Associates did not have a positive resolution to their complaint.
Furthermore, DNF Associates has been involved in at least 16 federal lawsuits concerning violations of the Fair Debt Collection Practices Act (FDCPA). Two of these cases were heard by federal appellate courts.
In both cases (one in the 9th Circuit and the other in the 8th Circuit), it was determined that DNF Associates qualifies as a debt collector under the FDCPA despite the company's assertions that it outsources collection activities to other agencies and law firms. The U.S. Supreme Court declined to review the Ninth Circuit decision in October 2020.
DNF Associates purchases debt for as little as 8 cents on the dollar. For example, if someone owed $5,000 on a credit card, DNF Associates might buy that debt for $400. Then, they attempt to collect the full $5,000 from the consumer. This is their business model.
Why You Should Question the Debt
The Nature of the Debt Buying Process
When debts are sold from the original creditor to a debt buyer like DNF Associates, information can get lost. Sometimes, the history of the account is incomplete, fees have been added by the original creditor without your knowledge, or you may have already paid the debt. The information DNF Associates has on your debt may not accurately reflect the debt you owe, if you owe it at all.
A study conducted by U.S. PIRGs found that 79% of credit reports contain errors or other major issues. This means that if there is a collection account on your credit report from DNF Associates, it is likely that it contains some level of error.
Law firms that represent consumers against DNF Associates have noticed a pattern of the company's behavior. "Most of the time, when DNF files a lawsuit, they do so without attaching the assignment or title documents necessary to establish their right to sue, and if consumers don't raise the issue, the court will not address it," one law firm shared.
Another firm noted, "In most cases, DNF doesn't have the documentation necessary to prove their cases, and they're suing thousands of people hoping they don't show up in court so a default judgment can be entered."
The Presumption of Accuracy
There is an underlying assumption that if you have a collection account on your credit report, you must owe the debt. This assumption works to the advantage of the debt collector and to your disadvantage. In reality, when a debt buyer purchases a debt, it is part of a package of thousands of debts. The debt buyer has no direct knowledge of whether your specific debt is valid or not.
We have learned from class action suits against DNF Associates that the company files a high volume of lawsuits. For instance, in Cook County, Illinois, DNF Associates filed more than 1,500 collection lawsuits, and in Maryland, the company filed over 500 lawsuits since March 2019. A company that files this many lawsuits cannot verify the validity of each debt before filing suit. When they sue this many people, mistakes are inevitable.
What DNF Associates is Counting On
They're Counting on You to Pay Because You're Scared
Debt collection works because of fear and urgency. When consumers get a letter or phone call saying they owe a debt, their immediate reaction is to pay it to avoid further action. Collectors know this and use it to their advantage.
In complaints filed with the Consumer Financial Protection Bureau (CFPB) against collection agencies used by DNF Associates, consumers have stated that they were told by representatives to call back by a certain time or DNF would file a lawsuit against them.
One consumer reported being asked to pay the debt with a different credit card because it had an available balance. These tactics aim to scare you into paying without taking the time to verify whether the debt is valid.
Paying a debt out of fear is one of the worst things you can do as a consumer. When you pay a collection account, it still shows up on your credit report as a paid collection. The negative mark continues damaging your score for years. The best resolution for a collection account is to have it completely removed from your report. This is not likely to happen when you react out of fear.
They're Counting on You Not to Say Anything
Their business model relies on consumers not responding when they file a lawsuit. If the consumer does not respond, the court will issue a default judgment in favor of DNF Associates. With a default judgment, DNF can pursue wage garnishment, bank levies, or place a lien on your property. However, if you do respond, their strategy falls apart.
One consumer who filed a complaint with the BBB said he called DNF multiple times, left voicemails, and emailed the company through its website. He never heard back but then was served with a motion for default judgment. This consumer had fallen into debt due to COVID-19 and had been living in his car for weeks.
While this illustrates how not saying anything can hurt you, there is a difference between not saying anything in a lawsuit and choosing not to engage with a debt collector directly. You have the right to control how debt collectors communicate with you. You can limit your interactions, and it's not rude or an attempt to avoid the situation. It's a protection provided to consumers under the FDCPA to prevent harassment and to protect you from saying something that may be used against you.
Why You Must Dispute First
You Cannot Negotiate Until You Investigate
You cannot talk about paying a collection account, settling a collection account, or resolving a collection account until you have fully investigated the status and accuracy of that account first.
This means you have to obtain your credit reports from each of the three major credit bureaus to see exactly how DNF is reporting the account to them and to compare whether the balance, account number, date of first delinquency, and name of the original creditor are accurate and verifiable.
DNF only reports delinquent accounts to TransUnion, so the listing may appear on that credit report but not on the others. Any discrepancy between what DNF is reporting and what is reported elsewhere is a potential dispute opportunity. If the balance is incorrect, the account number is wrong, the date of first delinquency is inaccurate, or the original creditor's name does not match, you can formally dispute the listing with the credit bureau.
The Fair Credit Reporting Act says that when you dispute an entry, the credit bureau must initiate an investigation, and the furnisher of the information (in this case, DNF) must verify that the information is accurate within 30 days or the bureau must delete the entry. Since DNF purchases debts for pennies on the dollar, the company does not have the original creditor agreements, the full payment history, or the chain-of-title documentation to withstand a properly executed dispute.
Collectors Will Not Invest More in an Account than It is Worth
Every dispute, every request for validation, and every procedural challenge costs the collector time and money. Debt buyers make enormous markups on the debts they purchase, but those profits are based on the enormous volume of accounts they pursue. Each account individually receives very little attention. When you force a debt collector to actually invest time, money, or both into your account, you begin to change the economics of the equation.
DNF paid an average of 8 cents for every dollar of debt it purchased. That means if it bought your $3,000 account, it paid about $240 for it. Paying lawyers to respond to disputes, producing the chain-of-title documentation, and defending against FDCPA counterclaims eats into that profit margin in a hurry. At some point, it simply costs the debt collector too much to continue pursuing you.
That is why a professional dispute strategy works. It forces the debt collector to incur costs it would prefer to avoid. The more comprehensive and aggressive the challenge, the more it costs the debt collector to pursue the account. It is not about waiting for the debt collector to slip up; it is about making each step of the debt collection process so expensive that eventually it just makes more sense for the debt collector to walk away. That is how you win.
The Licensing Issues That Create Dispute Opportunities
DNF Has Been Caught Operating in States Without Licenses
One of the most important things to emerge from the investigative record is the fact that DNF has been caught operating in some states without the requisite debt collection licenses.
In the Viernes class action complaint filed in Hawaii, the court ruled that DNF had filed collection lawsuits in the state without first registering as a debt collector with the Hawaii Department of Commerce and Consumer Affairs, as required by state law. The court denied DNF's motion for summary judgment and certified the class.
There were similar issues with DNF's licensing raised in the Bittinger class action complaint filed in Maryland, where the plaintiffs alleged that DNF had filed in excess of 500 lawsuits against Maryland residents without first obtaining a state debt collection license. The company's license with the New York DCA has also shown as inactive at times.
These are not minor technical infractions; they are material failures of compliance that go to the heart of whether the collection activity in question was legally valid in the first place.
What This Means for Your Dispute
If DNF was not properly licensed in your state when it started collecting on your debt, that could invalidate the legal basis for the collection activity. State licensing laws are designed to protect consumers, and debt collection companies that disregard them should not get a free pass simply because they have since become compliant.
A credit repair expert can research the status of DNF's license in your state at the time of the initial collection contact and factor that into your dispute strategy if necessary. This is exactly the kind of information that individual consumers almost never discover on their own.
The information imbalance between debt buyers and their targets is extreme. DNF has lawyers and compliance officers and third-party collection agencies at its disposal. You have your phone, your web browser, and a growing sense of panic. A professional advocate helps level that playing field by bringing to bear the specific knowledge necessary to identify and exploit these kinds of licensing issues.
The Account Can Be Disputed and Maybe Deleted
DNF Associates LLC has a long history of consumer complaints, federal court defeats, licensing problems, and a complaint resolution rate of less than 5 percent. None of that means the collection account on your credit report is going to magically delete itself. What it does mean is that there are legitimate reasons grounded in the facts to dispute the accuracy, the validity, and the legality of the way DNF is reporting that debt on your credit report right now.
Collection accounts that contain any inaccuracies, that cannot be verified within the statutory time limit, or that were originated by a company that was not properly licensed in your state at the time can all be disputed properly through the credit bureaus. The key is to do it with the right strategy, the right documentation, and the right professional guidance.
Let FightCollections.com Handle This for You
At FightCollections.com, we know companies like DNF Associates LLC inside and out. We investigate the accuracy of every collection account, root out compliance issues and documentation weaknesses, and develop dispute strategies specifically designed to force the debt collector to prove its case or risk having the account deleted.
You do not have to go through this process by yourself, and you should not make the critical error of paying a collection account before you have determined whether it actually belongs on your credit report in the first place.
Contact FightCollections.com today for a free consultation and take the first step toward reclaiming your credit report from debt collection companies that are counting on you to do nothing at all.
