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In a 2022 consumer response report by the Consumer Financial Protection Bureau (CFPB), there were 121,700 complaints against debt collectors in 2021. Of this number, 15,500 were complaints related to written debt notifications.
Debt validation is the practice of making a debt collector prove a debt is valid and collectible. These agencies do business out of convincing people in financial trouble that the situation can only worsen unless the debtor does as the collectors say.
If a debt collector or collection agency contacts you about a debt they are handling, you have 30 days to ask for validation. The proper way to ask for verification is by producing a debt validation letter.
Legally speaking, the debt collector must respond to you upon receipt of the letter. The process starts to work in your favor through these rules.
Most collection agencies are playing the odds with the consumer, meaning the agencies are betting the collection efforts will go unchallenged, and the consumer will pay the bill upon first contact or soon after.
In reality, most debt collectors do not have the time or resources to deal with this pushback and meet the deadlines.
Once you send a debt dispute letter, the collection agency has a 30-day period to respond.
The debt becomes invalid if the collector does not respond within that time. If they do respond within the correct amount of time, the response must meet specific criteria for the debt to be valid.
Mixed in with all the different statutes and laws regarding debt, the collector can keep your debt in limbo until the statute of limitations runs out. This situation is why many people attempting to manage this process alone have mixed results.
If a collection company does not adhere to the strict time frames set by the banking laws, the debt becomes void, and the collector cannot pursue further collection activity against you. In this instance, these agencies are not well educated on their business laws.
This opens another area where you can eliminate debt and potentially profit from it. If a collector still attempts to collect old debt already proven invalid, the client can sue the agency for damages, including court costs and attorney’s fees.
Should a collector fail to answer a debt validation letter, they no longer have the legal right to collect the debt further. Doing so can cause the collector to start accruing violations that can turn into a civil suit.
Debt validation and verification are processes for the person on either side of the debt, be it collecting or disputing.
In other words, as the consumer, you must issue a debt verification letter to demand the collector verify the debt. The collection agency must provide a validation letter to prove you owe that debt.
The collection agency must send the validation letter within five days of the first call that leads to contact with you. Debt verification is the process of the consumer’s representative sending a registered letter demanding specific information be provided.
A debt validation letter must meet the following criteria:
The debt verification letter is what you or a representative will write to make the collector prove the debt. This letter must ask for the name of the creditor and proof of the debt. You must also ask for the debt’s age so the collector can prove that what you owe is not outside the statute of limitations.
The validation letter contains info the debt collector is working off to prove the debt belongs to you. Collectors are legally required to send a debt validation letter to you, which outlines what the debt is, the amount of the debt, and other information.
If you are still uncertain about how much you are asked to pay, you can send the debt collector a debt verification letter requesting more information.
With a debt verification letter, the collector may realize if there is an error with their information and possibly remove the negative item from your credit report.
The letter also provides documented proof you took steps to confirm your debt, which can help when you dispute the information with the credit bureaus.
Debt verification and validation letters can help your situation but do not necessarily solve all your debt collection issues.
For example, the collector can still try to collect debt already past the statute of limitations, although they cannot force you to pay that amount.
If you need a template for writing a verification or validation letter, the CFPB website provides a downloadable sample letter for your reference.
You can send your letter by certified mail and request a return receipt to document the correspondence between you and the collector.
Debt verification letters can help determine whether the debt is valid or not. However, if you plan to pay off debt, such as credit card debt or student loans, consider not sending such a letter. You may not want to demand proof of what you owe.
This part is where having an expert in your corner makes all the difference. Sending letters within the correct time frame and with appropriate wording is the difference between owing a debt and eliminating it.
American Debt Enders provides debt validation services and years of experience to help you get out of debt. Contact us for a no-obligation consultation today.
After you receive a debt validation letter, the verification process starts. The information from this letter must be verified and proven.
Read the letter closely and ensure there are no errors. If the debt is yours, you must pay it off.
Disputing a debt’s validity is the process of verifying the information a collector has about your alleged debt to prove you do not owe the debt.
The statute of limitations sets the maximum time for parties involved in a dispute to initiate legal proceedings from the date of an alleged offense. The length of time specified in the statute can vary depending on state laws.
After the deadline, the collector no longer has the legal right to sue the borrower for the debt.
The short answer is yes. The collector can sue you if you do not make an effort to pay the debt or make the collector verify what you owe.
There are a few courses of action if a collector sues you over a debt. First, you must understand that if you wait too long to deal with outstanding debt, there is a good chance you will get sued by the creditor or collection agency.
As a debtor, you have the right to employ a representative to act on your behalf, not be harassed during collection efforts, and demand the collector to verify a debt.
If a verification letter does not help, or if a collector keeps harassing you, you can complain to various consumer protection agencies, such as the CFPB, the Federal Trade Commission (FTC), or your state attorney general.
You can write a note to send that letter and go back to your game, secure in knowing you have real options to defend yourself and your finances.
There are strict rules set forth by the Fair Debt Collection Practices Act (FDCPA) governing what a debt collector can do and say while trying to collect a debt.
For example, a debt collector cannot harass or call you multiple times within a short period. They are also not allowed to contact you before or after certain times of the day.
A common scare tactic is threatening people with actions the collector does not intend to take. Swearing and threatening you or your property with illegal actions are also something the collector cannot do.
If these rules are broken during collection efforts, you can take legal action in the form of a lawsuit.
American Debt Enders is a family-owned and operated firm with one task. To help people get free of their crippling debt. Giving them new life and new hope moving into their future.
We have partnered with law firms to create the most comprehensive, low-cost, and complete debt relief program. ADE has been helping people start new debt-free lives for over 15 years.
Our founder, Steven Ciantro, was one of the original pioneers of the debt invalidation process. He researched the U.S. banking laws and found those created to protect people from bad debt practices.
American Debt Enders has always had the same philosophy. We are in the business of helping people. We are “Consumer Advocates.”
An initial communication is usually a phone call but can also be a debt validation letter.
If you do not receive this notice, the 30-day clock starts ticking.
Debt can be disputed after a validation period. If the 30 days run out, the debt can be disputed and voided.
If you successfully dispute a debt, but it is still on your credit report, there are two courses of action. You can either contact a company to repair your credit. A lot of which can sue on your behalf if there are violations.
The second way to handle it is to dispute the entries yourself. This can be done with a reasonably simple letter.
The FDCPA is a regulatory agency that protects the public from being harassed by debt collectors and other similar agencies. There are a particular set of rules that these agencies must follow.
Most companies that do collections either do not know what these rules are or ignore them and play the odds that the consumer will not consult counsel. Formal complaints can be made directly to the governing body, resulting in disciplinary action.
Included with your debt relief program is the legal support to bring a civil suit against these collectors who violate the rules of conduct. These suits can yield up to $500 per violation.
You can dispute the debt if you do not receive this letter within 30 days of initial contact.
Debt validation letters only work if the agency has kept good records and can prove the debt they are asking you to pay is valid.
By the use of a registered letter.
If you are interested in learning about any program we offer, just call: 1-877-766-2465 for a no pressure, no obligation consult, or visit: FREE CONSULTATION and leave your contact information.
In order for debt to be managed legally, there are obligations on the creditor as well as the debtor. These laws were created in order to achieve fairness in these types of transactions.
Both sides must live up to their obligation. In most cases the consumer is unaware of the laws and protection afforded them to remedy what can be a traumatic impediment on their lives.
In a previous article, we covered the benefits of using a debt validation letter when you receive a notification from a debt collector. By law the collector has to notify you that you are entitled to ask for a validation of the debt within 5 days of contacting you about you owing money.
There are defensive methods that can be applied that are best implemented by a reputable company with a full understanding of the law. This may include notification letters sent to the collection company or response to a legal threat against you.
If you find yourself in these circumstances, there are reputable programs designed to help the consumer navigate through the process and have their debt eliminated. This will help you obtain a much needed fresh start and provide you with an understanding and a clear path forward.
As a point of note, let me remind you that the debt collector has limited number of days to respond to the debt validation. What the response should contain is proof that you actually owe the debt. As well as proof that they have the legal right to collect the debt. Remember they are collectors, and you never borrowed anything from them. They must also prove that they are licensed to collect debts in your state. Also, they need to provide the original contract you signed with the original creditor, or at least credit card receipts that you signed.
If the collector completely fails to respond to the validation letter, again they have 30 days to do so, then legally they must cease collection efforts, and remove negative items placed by them on your credit report. If they have not responded, you need to send them a certified letter stating that they have failed to respond and to cease all collection efforts and remove any negative items they have placed on your credit report, or supply you with a letter stating that the negative items were placed on your report in error. That way, you can have the items removed by contacting the credit bureaus. If they ignore you, you can sue them in small claims court for violations of the Fair Debt Collection Practices Act.
Sometimes, after you have sent a validation request, the collector will send you back a “verification of the debt”. This is not a validation. In a verification the creditor will simply send you the name and address of the original creditor along with the amount owed. This is not what you want from them. You are entitles to a validation if that is what you requested.
As a final note, the collector cannot contact you to collect the debt while the validation process is on-going, so, be sure to monitor any calls you receive and log them. Since collection contact during this period is illegal, violations may be accrued under violation of the FDCPA.
If you enjoyed this article, please visit our blog to read more articles on similar topics. Also, if you need more information, then please get in touch with our team. Please note that we are not attorneys, and this article is not intended to be legal advice, but rather legal information.
If you are interested in learning about any program we offer, just call: 1-877-766-2465 for a no pressure, no obligation consult, or visit: FREE CONSULTATION and leave your contact information.
Usually, a debt collector will take around 1–30 days to respond to your request for debt validation service. However, debt collectors don’t have a deadline to respond to a debt validation letter, and they may take days, weeks, or even months before getting back to you. Until they do, though, you’re free to not pay the debt.
There are defensive methods that can be applied that are best implemented by a reputable company with a full understanding of the law. This may include notification letters sent to the collection company or a response to a legal threat against you. If they ignore you, you can sue them in small claims court for violations of the Fair Debt Collection Practices Act.
If you enjoyed this article, please visit our blog to read more articles on similar topics. Also, if you need more information, then please get in touch with our team. Please note that we are not attorneys, and this article is not intended to be legal advice but rather legal information.
