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Debt Validation: Force Collection Agencies to
Prove You Owe Them
by rebuildcreditscores.com
Prove You Owe Them
by rebuildcreditscores.com
How Debt Validation Works
According to the FDCPA you have the right to request a collection agency validate the debt
they are trying to collect. Essentially, the collection agency must show that you owe the
"original creditor" the debt, not the "collection agency" attempting to collect the debt.
Debt Validation Documents
Collection agencies must provide proof that you owe the debt to the original creditor. That
proof can be in the form of account statements from the original creditor, payment history from
the original creditor, copy of the original signed loan agreement or credit card application.
Account statements usually fill these requirements. What you are basically trying to get them to
prove is the following:
Assigned Debt
A collection agency does not own a debt that has been “assigned” to them. In this case you do
not owe the collection agency any money and there is no way a collection agency can prove
you owe them. There is no contract, agreement or original application of credit. There are no
statements of the account because your contract is with the original creditor. Some contracts
contain a clause “debtor agrees to be responsible for payment of this debt to creditor or its
assigns”. Under this clause the collection agency is covered in the contract with the original
creditor. In this case you may want to settle the debt because the original creditor’s assigns
(collection agency) is the same as the original creditor.
Purchased Debt
It has become increasingly common for original creditors to sell bad debts to collection
agencies. The collection agencies purchase these debts in large portfolios often for pennies
on the dollar. This does not make them the original creditor. You still have the right to request
debt validation and proof the account belongs to you because if they cannot validate the debt
the collection agency cannot prove you owe the debt. The Federal Trade Commission has
made it clear that a “mere itemization” is not sufficient proof to validate a debt.
How to Request Validation
If the Collection Agency Cannot Validate the Debt
If the collection agency cannot validate the debt they must immediately delete the debt from
your credit files and cease any further collection efforts. If they continue reporting the debt
they are in violation of the FCRA, and you can sue for $1,000 in damages for any violation of
the Act.
Debt Validation Letter
Sample letter to request debt validation from a collection agency.
According to the FDCPA you have the right to request a collection agency validate the debt
they are trying to collect. Essentially, the collection agency must show that you owe the
"original creditor" the debt, not the "collection agency" attempting to collect the debt.
- FDCPA Section 809. Validation of debts [15 USC 1692g]
(b) If the consumer notifies the debt collector in writing
within the thirty-day period described in subsection (a) that
the debt, or any portion thereof, is disputed, or that the
consumer requests the name and address of the original
creditor, the debt collector shall cease collection of the
debt, or any disputed portion thereof, until the debt
collector obtains verification of the debt or any copy of a
judgment, or the name and address of the original creditor,
and a copy of such verification or judgment, or name and
address of the original creditor, is mailed to the consumer
by the debt collector.
Debt Validation Documents
Collection agencies must provide proof that you owe the debt to the original creditor. That
proof can be in the form of account statements from the original creditor, payment history from
the original creditor, copy of the original signed loan agreement or credit card application.
Account statements usually fill these requirements. What you are basically trying to get them to
prove is the following:
- The collection agency legally owns the debt and is authorized to collect it from you.
- The full amount of the debt is documented by the original creditor.
- The original creditor can provide a copy of the original signed legal contract.
Assigned Debt
A collection agency does not own a debt that has been “assigned” to them. In this case you do
not owe the collection agency any money and there is no way a collection agency can prove
you owe them. There is no contract, agreement or original application of credit. There are no
statements of the account because your contract is with the original creditor. Some contracts
contain a clause “debtor agrees to be responsible for payment of this debt to creditor or its
assigns”. Under this clause the collection agency is covered in the contract with the original
creditor. In this case you may want to settle the debt because the original creditor’s assigns
(collection agency) is the same as the original creditor.
Purchased Debt
It has become increasingly common for original creditors to sell bad debts to collection
agencies. The collection agencies purchase these debts in large portfolios often for pennies
on the dollar. This does not make them the original creditor. You still have the right to request
debt validation and proof the account belongs to you because if they cannot validate the debt
the collection agency cannot prove you owe the debt. The Federal Trade Commission has
made it clear that a “mere itemization” is not sufficient proof to validate a debt.
How to Request Validation
- Send the collections agency a certified, return receipt letter requesting debt validation.
You must allow them 30 days from their receipt of the letter to respond. Their failure to
respond within the 30 days is a violation of law and the entry must be removed from your
credit reports.
- If the collections agency responds in writing with sufficient proof according to FDCPA
statutes, you may have to settle the debt, dispute it with the credit bureaus or find out
whether or not the collection agency is authorized to collect in your state. If they are
not authorized to collect send another letter, certified, return receipt stating the violation
and threaten to sue if they do not cease collection actions and remove the item from
your credit reports. At this point you can also send a letter to the credit bureaus alerting
them of the violation of the collection agency and request they remove the collection
item immediately.
- If the collections agency responds in writing but does not provide sufficient proof, write
them another letter stating the violation of FDCPA. Request they cease collections
efforts and remove the collection item from your credit reports. Threaten to sue them if
this is not done within 15 days of your request. If you have to sue, file in small claims
court. The cost is minimal and the court documents are simple to complete.
If the Collection Agency Cannot Validate the Debt
If the collection agency cannot validate the debt they must immediately delete the debt from
your credit files and cease any further collection efforts. If they continue reporting the debt
they are in violation of the FCRA, and you can sue for $1,000 in damages for any violation of
the Act.
Debt Validation Letter
Sample letter to request debt validation from a collection agency.
Debt validation forces a
collection agency to
prove you owe the debt
they are requesting. It
also requires a debt
collector to provide proof
of the amount they say
you owe, including any
added fees and interests.
Debt validation applies to
any law firms which
engage in the practice of
debt collection as well as
all collection agencies.
collection agency to
prove you owe the debt
they are requesting. It
also requires a debt
collector to provide proof
of the amount they say
you owe, including any
added fees and interests.
Debt validation applies to
any law firms which
engage in the practice of
debt collection as well as
all collection agencies.
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A collection agency contacts you regarding a debt. How do you know this is your debt and that
you actually owe the collection agency? Debt buying is a growing, lucrative industry full of
mistakes and errors.
you actually owe the collection agency? Debt buying is a growing, lucrative industry full of
mistakes and errors.
More Resources
Settle Debts with Collection Agencies. Learn to how settle debts for pennies on
the dollars with Collection Agencies.
Settle Debts with Original Creditors. Get tips to settle debts for pennies on the
dollars with Original Creditors.
Student Loan Rehabilitation. Learn how to get your delinquent student loans back
on track and repair your credit rating.
Student Loan Forgiveness. You may be eligible to get your entire student loans
forgiven and never have to pay back one dime.
the dollars with Collection Agencies.
Settle Debts with Original Creditors. Get tips to settle debts for pennies on the
dollars with Original Creditors.
Student Loan Rehabilitation. Learn how to get your delinquent student loans back
on track and repair your credit rating.
Student Loan Forgiveness. You may be eligible to get your entire student loans
forgiven and never have to pay back one dime.
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