Ever gotten the surprise of denied credit at a department store when you applied for their 15% extra discount if you charged your new purchases on their in store credit card? This runs right up there next to the scenario where you are using your credit card that you always use and it is denied and when you called it seems that payments have been incorrectly reported as missed. Or how about this scenario: at home eating dinner with the in-laws and a bill collector calls from out of nowhere and you lose your temper?
What Is Debt Validation?
Debt validation is when you ask a bill collector to validate the debt that they are trying to collect from you. A collector must be able to prove that you owe what they say you owe or they cannot collect from you and they cannot negatively harm your credit. If they have harmed your credit, and they cannot provide you with proof that you owe them money then they must correct their errors on your credit report.
The Fair Debt Collection Practices Act spells out your rights and how you are protected as a debtor against collection companies and their efforts to collect money from you.
How To Validate Debt – Certified Letter To The Collector
The best way and most recommended way to validate your debt is in the form of a validation letter to the collection agency or bill collector. In the case where you have a lot of bad debt in collection status and are considering debt settlement or bankruptcy you may want to get your debt validated. If you didn’t know this, a collector must be able to prove that you really owe what they say you owe…and they might not be able to show you proof.
Just remember, if they cannot prove it then they cannot collect it. Nor, can they report it negatively or even at all in many cases.
Debt Validation Letter Gives You Control Of The Situation
Before we get into the content of the letter, you will want to make sure that you mail this letter certified mail requiring a signature by the collection company. The second thing you want to do is to document everything you do surrounding preparing and sending this letter, interactions with the collector etc.
The Debt Validation Letter is important as it gives you a sense of control in the situation. It also provides the collector with the knowledge that they are dealing with someone who knows what they are talking about. Many consumers do not know how to handle speaking and interacting with debt collectors and cave in pretty easy even in cases where they should not have caved.
What Do I Say In A Debt Validation Letter?
In this letter you want to specifically address the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b). This section of the FDCPA stipulates that you may dispute the collector’s claim and that you are asking for verification of their claim against you. At a minimum include the following:
- ask for the amount of debt that you owe
- the name of the creditor and account number to whom the money is owed
- how did the collector determine the amount owed
- copies of the original creditor credit contract showing your signature
- proof that the statute of limitations has not lapsed pertaining to the account in question
- proof that the collector is licensed to bill collect in your state – proof of license
- Mention that you will not hesitate to file a lawsuit against the collection agency if they harm your credit in any way, or that you find any negative information on your credit as a result of their actions. Mention this as it pertains to them violating provisions of the Fair Credit Reporting Act, the Fair Debt Collection Practices Act, and defaming your character and good name.
- Let the collector know that they have 30 days to provide you with the information that you seek.
- Also, let them know that if they send you proper proof of the debt they are trying to collect that you will want your own 30 days to investigate their information
- That during all of this correspondence and research periods that phone calls, letters etc. shall cease and desist or harassment charges will be filed.
This should about cover what you want to send the bill collector to validate your debt with them. Original creditor in-house collection departments are not held to these same rules. You will need to consult an attorney for further guidance on working with original creditors. Good luck and always remember to keep your cool. Collectors want you to get upset. The more upset you get the more you are likely to have a knee jerk moment and pay them something when maybe you should not have.
