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Page Title: Referral to Service Member Debtor
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judgment,  the  correspondence  must  contain  a  certificate of compliance (or its equivalent) and proof that the credit transaction was made following the Truth in Lending Act and its Standards of Fairness. The creditor also  must  submit  a  Statement  of  Full  Disclosure showing  the  terms  of  the  transaction  disclosed  to  the service member when the contract was executed. If the debt collector is in violation of the Fair Debt Collection Practices Act or a state statute regulating debt collection  practices,  return  the  correspondence  to  the sender, along with a letter similar to the sample letter in figure  14-1. REFERRAL TO SERVICE MEMBER DEBTOR Normally a division officer or you, as the senior LN, refers  a  qualified  indebtedness  complaint  to  the  service member  at  a  conference  where  the  member  is confronted  with  the  alleged  debt.  If  the  service  member acknowledges the debt and his or her ability to pay, instruct the member on the fact that he or she is expected to make good on the debt as soon as possible. If the service member disputes the debt or states an inability to pay, refer him or her to the nearest legal assistance officer. CORRESPONDENCE WITH THE CREDITOR When you refer a complaint to a service member debtor, you should notify the creditor of the referral and some indication of the debtor’s intentions. Prepare and send a letter similar to the sample letter in figure 14-2 to the creditor and make sure the member’s intentions reach the creditor either directly or through a legal assistance  officer. When  the  correspondence  shows  the  complaining creditor has no judgment, is subject to the Truth in Lending  Act,  and  contains  no  evidence  of  the compliance-disclosure  requirements  already  discussed, prepare and send a letter similar to the sample letter in figure  14-3,  enclosing  a  copy  of  the  Standards  of Fairness and forms for a Statement of Full Disclosure and the Certificate of Compliance. Hold the complaint in  abeyance  pending  reply  from  the  creditor. If the creditor resubmits the complaint and includes the completed, required forms, or their equivalent, the complaint  is  considered  qualified  and  you  should Dear  Sir/Madam: This is in reply to your letter of (date) concerning the alleged indebtedness of (rate, name). The policy of the Department of the Navy concerning indebtedness is that members of the naval service shall honorably discharge their just debts.   The Department of the Navy, however, has no authority to enforce settlement of any private claims made against members of the naval service, nor is adjudication of disputed claims a matter under the cognizance of the Department of the Navy. The  Navy  will  foward  complaints  of  indebtedness  to  members  advising  them  to  communicate  directly with the claimant regarding their intention in the matter, provided that the letter of indebtedness complies with statutory and regulatory requirements. A careful review of the contents of your correspondence suggests that it is in violation of (statute [federal or state or both]), in that (brief description of apparent violation, for example, correspondent is a member of the class of persons prohibited from contacting third parties). Therefore, the correspondence is returned to  you  without  action. You are advised to communicate directly with (rate, name) about this matter. Sincerely, Figure 14-1.-Sample letter to debt collector in violation of Fair Debt Collection Practices Act or state statute. 14-6

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