A debt collector is required under the Fair Debt Collection Practices Act (FDCPA) to notify a debtor in writing within five days after initial communication. This written communication is commonly referred to as a dunning letter. The dunning letter must state the name of the original creditor, account number and amount of the debt. The letter must contain a disclaimer that states that the letter is a communication from a debt collector, that it is an attempt to collect a debt, and that any information obtained will be used for that purpose. The letter must also state that the debtor has 30 days to dispute the validity of the debt and that the debt collector will assume the debt is valid if no response is received within the 30-day time frame.
When Creditors Dispute
According to the FDCPA, a debt collector must honor a debtors written request to cease all communication or to limit communication to U.S. postal mail. A debtor may demand an immediate cease of all calls to his place of employment or to family members. A collector who disregards this written request faces federal fines and civil legal action.
Prove Debt Ownership and Amount Owed
A debt collector must provide proof that a debt belongs to the debtor and not someone else. They must provide documentation showing the debt is on record under the debtors name, on file with the original creditor and under the correct current address and social security number. A debtor may also request detailed information regarding the amount of the debt, such as an explanation of how the original creditor arrived at the stated amount. Refusal to supply this information to the debtor constitutes a failure or refusal to prove the debt is valid.
Prove Debt Collector Can Collect
A debtor can take the extra step of ensuring that the debt collector is a legitimate collector that is licensed to collect in the state where they reside by requesting license information. Many debtors take this extra precaution as a safeguard against scammers who pose as bill collectors in attempt to bilk unsuspecting people out of their money.
No Validation, No Payment Required
Failure to respond to all or any part of a debtors request for debt validation immediately renders the debt invalid and relieves the debtor of any financial obligation. Some debt collectors will send the debtor a letter absolving him of all liability if they cannot properly validate a debt. Debt collectors may report a disputed debt to a credit reporting agency (CRA), however, reporting unvalidated debts could land them in hot water. Debtors can request CRAs to remove invalidated debts from their credit reports.
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