Are you seeing LVNV Funding LLC on your credit report? If so, you're dealing with one of the largest debt buyers in the country. This isn't the original company you borrowed money from. They bought your debt from someone else for pennies on the dollar and are now trying to collect from you. Here's what we found in the case file:
Company Name: LVNV Funding LLC
Address: 355 S Main Street, Suite 300-D, Greenville, SC 29601
Mailing Address: PO Box 10497, Greenville, SC 29603
Phone Number: (866) 453-0039
Years in Business: 20 years (formed on April 13, 2005)
Parent Company: Sherman Financial Group, LLC
Collection Servicer: Resurgent Capital Services LP
LVNV Funding is a passive debt owner. That means they own the paper but aren't making the collection calls. Instead, they hire an affiliated servicer (Resurgent Capital Services) to do the dirty work. Resurgent may then contract out to other third-party collection agencies and law firms.
What We Found During Our Investigation
The Consumer Financial Protection Bureau has received more than 5,500 complaints about LVNV Funding LLC. Another 26,000 complaints have been filed about their affiliated servicer, Resurgent Capital Services. This makes the Sherman Financial Group family one of the most complained-about debt collection companies in the country.
The Better Business Bureau's profile on LVNV isn't any more encouraging. Despite an A+ accreditation rating, their customer review rating is only 1.19 out of 5 stars. The disconnect between their accreditation and review scores is worth noting.
In 2012, the state of Maryland fined LVNV and Resurgent Capital Services $1 million for violating debt collection regulations. Their offenses included filing false affidavits, collecting debts without a license, and attempting to collect unauthorized fees. The state ordered the dismissal of 3,564 pending collection cases and required them to credit affected consumers approximately $4.8 million.
A jury in Maryland later awarded $38 million in damages against LVNV Funding for collecting debts without a license and obtaining default judgments against consumers. The evidence at trial revealed that the company continued to collect debts without a license for years.
The Business Model Used By LVNV Funding
How They Work
LVNV Funding buys charged-off debts from original creditors (credit card companies, medical providers, etc.). According to a report by the Federal Trade Commission (FTC), Sherman Financial Group (the parent company of LVNV Funding) was the largest purchaser of charged-off credit card debt directly from the original creditor for most of the years between 2005 and 2011.
When they purchase debts, they typically pay between 1-10% of the face value. That means the $5,000 credit card debt they're pursuing you for may have only cost them $200 or less. That fact has significant implications for how aggressively they pursue collection.
The FTC report expressed concerns that debt buyers are often acquiring debts with incomplete or inaccurate information. Original creditor records typically don't include all of the documentation needed to establish that the debt is owed by the person they're contacting.
Their Aggressive Tactic
Debt collectors make money when you're reacting under pressure. They're counting on you to respond emotionally rather than strategically. The minute you call them up and start negotiating, you've already lost leverage.
LVNV Funding files thousands of lawsuits every year. In fact, research revealed that they filed the most debt collection lawsuits in Chicago and suburban Cook, DuPage, and Lake counties. Between 1996 and 2011, they filed nearly 26,000 lawsuits in Maryland alone.
However, there's a difference between filing a lawsuit and actually winning. Court records show that LVNV often can't provide all the necessary documentation, including the original contract and a valid chain of title. When consumers push back on these lawsuits, they discover that the documentation needed to support the alleged debt often doesn't exist.
Why Consumers Typically Pay When They Shouldn't
The Information Disconnect
Debt collectors know something you don't. They maintain detailed records about your financial situation, your payment history, and your psychological makeup as a debtor. You don't know anything about them, their documentation, or their legal weaknesses. This information disconnect is their most powerful tool.
They know that when most people get a collection letter, they'll either ignore it or pay it. In either scenario, the collector wins.
A study by U.S. PIRG found that 79% of credit reports contain errors or major mistakes. That means there's a good chance the debt that LVNV Funding is pursuing you for contains incorrect information about the balance, dates, or even identity of the borrower.
The Payment Myth
Here's a little secret that LVNV Funding isn't telling you. If you pay a collection, it will be updated to a paid collection on your credit report. However, the account will still remain for seven years. You pay them, and you still have a collection on your credit report.
The best outcome isn't a payment. It's the complete deletion of the tradeline from your report. That's the difference between thousands of dollars in interest on your next loan or credit card.
Some consumers try sending a goodwill letter asking the collector to remove the account as an act of goodwill after they pay. However, collection agencies almost never honor these requests. Their entire business model is based on collecting money, not doing favors.
The Dispute-First Approach
Why Disputing Often Works
Federal law requires the information on your credit report to be accurate, complete, and verifiable. When you dispute a collection, the credit reporting agencies must investigate. If the collector can't verify the account within a reasonable amount of time, they're required to delete it.
Keep in mind that LVNV Funding doesn't pay much for the debts they pursue. In most cases, the documentation is incomplete. Pursuing a lawsuit, conducting a thorough search of their records, and engaging in repeated validation attempts is expensive. In many cases, it's cheaper for the collector to simply write off the account than spend more than the debt is worth validating it.
One consumer reported the following experience with LVNV Funding: They reported an account, I disputed it, and it was deleted. Then a month later, they pulled the same stunt again.
As one reviewer put it, this practice of reinserting previously deleted tradelines without notification points to systemic problems with their credit reporting practices.
What Makes LVNV Funding Accounts Particularly Vulnerable
Federal courts have found LVNV Funding in repeated violation of the Fair Debt Collection Practices Act (FDCPA). The Eleventh Circuit Court of Appeals determined that their behavior was deceptive, misleading, and unconscionable.
Several state courts have vacated judgments awarded to LVNV Funding because they couldn't provide the proper documentation. The top complaint filed with the CFPB is attempts to collect debts not owed. Consumers have reported debts that were already paid, debts owed by someone else, and debts previously discharged in a bankruptcy. These issues all represent grounds for a dispute.
Other consumer complaints point to issues with credit reporting, including: re-aging debts to make them appear more recent, failure to report original creditor information, and reporting the same debt multiple times with different balances.
Time Is On Your Side
The Statute of Limitations
Every debt has a shelf life for collection. Once the statute of limitations has passed in your state, the collector can no longer legally sue you for the debt. At that point, the debt is considered time-barred.
The New York Attorney General launched an investigation into Sherman Financial Group and discovered that they were attempting to collect from at least 400 borrowers whose debts were no longer legally collectible because the statute of limitations had expired. This practice of pursuing time-barred debts is a recurring problem for the company.
The state of Texas directly addressed this issue with a new law that prohibits debt buyers from filing suits on time-barred consumer debts. The law clarifies that subsequent payments do not revive the expired debt. Other states have enacted similar laws.
Why This Makes Old Debts Less of a Threat
As debts get older, it becomes more and more difficult to track down the necessary documentation. Witnesses are no longer available. Records have been destroyed or misplaced. The original creditor has gone out of business or purged their files.
LVNV Funding has even faced legal challenges based on this weakness. In Maryland, the court found that the company's affidavits were irregular because the employees signing them had no personal knowledge of the underlying claims. Employees were signing between 200-400 affidavits a day without reviewing the underlying documentation.
That means even though LVNV Funding may be sending you letters and making threatening phone calls about an old debt, their ability to actually prove that debt in court gets weaker with each passing year.
What You Should Not Do
Don't Engage Directly
Calling LVNV Funding directly is a losing proposition. Their representatives are trained to get information and commitments from you. Anything you say can (and will) be used against you.
You don't have to engage with them. You don't have to explain your situation. You don't have to negotiate. Let someone else handle the communication for you while you keep your distance from their tactics.
As one frustrated consumer reviewer put it: You cannot contact them directly, they send their junk debt to other collection agencies to collect, they will not provide validation of the debt once they take it over.
Don't Make a Partial Payment
Making a partial payment can reset the clock on a time-barred debt in some jurisdictions. It can also be interpreted as an admission that you actually owe the money, which complicates future disputes.
You may get a call from a debt collector who offers you a settlement deal. Pay us half of what you owe, and we'll consider it paid in full. Not only will you still have a collection on your credit report afterward, but you'll still be paying for a debt you may not actually owe.
When consumers dispute successfully, the outcome is often that they never have to hear from the collection agency again and never have to pay a dime. That's not the exception. That's the rule.
Conclusion
Getting Help
LVNV Funding has been hit with a $38 million jury verdict, a $1 million regulatory penalty, multiple federal court rulings that they violated the FDCPA, and thousands of consumer complaints. Their history demonstrates that they are vulnerable when challenged properly.
You are entitled to accurate and verifiable information on your credit report. If LVNV Funding can't provide it, federal law requires them to delete it. That's not a loophole. That's your right.
Professional credit repair specialists understand the documentation issues that plague debt buyer accounts. They understand which disputes get results and how to escalate if a collector is unresponsive.
Time to Take Action
If you have an account from LVNV Funding on your credit report, you don't have to pay it or live with it. The dispute process is in place for exactly this kind of situation where a debt buyer doesn't have the documentation and is relying on intimidation rather than facts.
FightCollections.com specializes in fighting debt collectors by disputing unverifiable, inaccurate, and erroneous information on consumer credit reports. We've already reviewed the LVNV Funding case file. We know their tactics, their weaknesses, and which strategies will work.
Contact us for a free consultation to review your report and talk through your options. The debt collector is counting on you to do nothing. Prove them wrong.