What Is Considered as Verification of a Debt?

The Fair Debt Collection Practices Act forces debt collectors to prove the validity of a debt when challenged by a debtor under certain circumstances. The process is verification of a debt, with the debt collector proving written documentation to the debtor. By law, the debt collector must stop debt collection efforts if it cannot verify the debt. Or a debt collector unable to verify a debt may not have enough documentation to win a debt lawsuit in court.

Process

Delinquent accounts end up with debt collectors after the original creditor gives up on collecting. The creditor sells or assigns the account to a debt collection agency. The debt collector must then send the debtor a written notice announcing the new status of the debt. The debtor can challenge the notice in writing within 30 days of receiving it, however, and that forces the debt collector to verify the debt. In the letter, the debtor must declare that he is disputing the debt under the terms of the Fair Debt Collection Practices Act and is requesting documentation verifying the debt.

Response

There is no time limit on how long debt collectors have to respond to the debtor's request. However, in the meantime, the debtor cannot contact the debtor to collect on the debt. The debt collector can resume collection efforts after sending the debtor proper documentation, such as a copy of the credit application signed by the debtor or copies of billing statements. The law considers such documentation as an indicator that the debt is legitimate and the debt collector has the right to collect the full amount.

Challenges

Verifying debts isn't always easy for debt collectors. Debt collectors working on assignment must request the information from the original creditor, and that can slow down the collections effort as the debt collector waits for a response. Debt collectors collecting on purchased debts face other challenges. In some instances, they are unable to obtain proper documentation from the original creditor, making collection efforts difficult.

Strategy

Debtors receiving initial notices from debt collectors should exercise their right to receive verification of the debt. Theoretically, a dishonest debt collector could attempt collecting on a debt without authorization from a creditor. Verifying the debt reduces the possibility of making payments to the wrong collector.