Debt Validation Strategy

As credit use continues to rise, many Americans are finding it difficult to pay their credit card bills. This delinquent payment history may lead to debt collection calls. Many people react to collection calls with compliance and do not realize that they have rights when it comes to challenging the collection of a debt. It is helpful to have a debt collection strategy in place to prevent becoming the victim of credit fraud when a debt collector calls.

Debt Validation

In September of 1996 the United States Congress passed the Fair Debt Collection Practices Act, also known as the FDCPA. The FDCPA allows any company collecting debt for credit accounts that they have directly created for their customers to use any legal method of collecting that debt. However, a collection agency must provide proof that they either own the debt or are duly appointed representatives of the creditor before you have to pay them anything. A debt collection agency must provide you with the details of the collection by standard mail within five days of making phone contact with you, and you can contest that debt anytime within 30 days of receiving that phone call. This proof of debt is referred to as debt validation. If you do not ask the agency to validate the debt, then you take on the responsibility of paying it according to the terms agreed to by you and the agency.

Validation Paperwork

The debt collection agency must respond to your validation request within 30 days of receiving it. The agency must send you the original contract that started the debt, the history of all payments up to the present day and either the proof that they own the debt or the contract they signed to become a duly appointed representative of the creditor. If the credit collection agency cannot supply all of this information then, according to the FDCPA, you are not obliged to pay them anything.

Procedure

Send a letter to the credit collection agency based on the template offered in the resources section below. When you mail the letter, send it certified mail and require a signature for delivery to prove that the agency received it. While you are waiting for a response to your validation request, do some research on the collection company. Contact your state attorney general and see if the agency is licensed to operate in your state. If they are not, then report the agency to the state attorney general for illegally attempting to collect a debt. If you do not receive any paperwork back in regards to your validation letter, then send the collection agency another letter stating that they did not respond to the validation request and you now consider the debt to be invalid. Include a request in the letter to remove the debt as a negative event on your credit report. Be sure to keep copies of all correspondence in a safe place, because if the agency does not remove your debt as a negative credit event on your credit report, then you can sue them to make sure the debt is removed. It is not necessary to send any information to the state attorney general's office during this process.