Validation of Debt Letters

If a consumer does not pay her debts on time, the lender may send the account to a debt collector. Debt collectors must follow the provisions in the Fair Debt Collection Practices Act (FDCPA). The FDCPA allows debtors to ask the debt collectors for written validation of a debt.

Fair Debt Collection Practices Act

Congress enacted the Fair Debt Collection Practices Act (FDPCA) to protect consumers against "abusive, deceptive and unfair debt collection practices." Under the FDCPA, debt collection agencies or law firms cannot harass the debtor, and the agency must cease all communication with the debtor if the debtor demands it. If the debtor demands all communication to cease, the collection agency may take further legal action, such as filing a law suit to collect the debt. The FDCPA lists the methods a collection agency can use to contact the debtor. For example, under section 805 of 15 USC 1692b (the U.S. Code citation for the FDCPA), the collection agency cannot call the consumer at any "unusual place or time." Generally, the FDCPA allows communication between 8 a.m. and 9 p.m. (in the debtor's time zone).

Validation of Debt Letter

Once a collection agency receives a debtor's account, it must send the debtor a written notice containing the amount of the debt, the name of the creditor owed the debt and a statement that the debtor must take action within 30 days to dispute the debt or else it will be presumed valid. Within the 30-day period after the initial communication by the creditor, the debtor can send a validation of debt letter. The validation of debt letter disputes the validity of the debt and asks the collection agency to provide information about the original creditor, information about how the collection agency calculated the debt and other critical facts about the debt, such as whether the statute of limitations has expired and proof the agency is authorized to collect the debt for the original creditor.

Effect

When the collection agency receives a validation of debt request, the FDCPA requires that all collection activities stop until the agency can provide the debtor with the information in the letter. This means phone calls and other methods of communication are prohibited until the debtor receives information validating the debt. If the debtor does not dispute the debt, a court will not construe that as an admission of liability or fault (according to section 809c of the FDCPA).

Other Issues

A validation of debt letter may be used by the collection agency in a lawsuit against the debtor to collect the debt. Because the letter can be potentially harmful, debtors considering writing a validation of debt letter should consider hiring an attorney to draft it or at least review it for accuracy and legality.

This article was written for informational purposes only. It is not intended to be legal advice.