Does a Debt Collection Agency Have to Prove You Owe the Debt?

Debt collection agencies are not just used by credit card companies, but also businesses, such as hospitals and small businesses, to collect overdue bills and debts. However, sometimes a collection agency may purchase a debt that is no longer eligible for collection, or whose stated amount is not accurate. To protect the consumer, debt collection agencies are required to prove the debt is legitimate through a process known as "debt validation," if requested.

Purpose

Collection agencies sometimes buy debt from the original creditor and can even resell it later. The result is that you may receive a collection letter from an agency you don't recognize. Debt validation is meant to verify the debt is accurate when you are unsure about its source or question the stated amount. Debt validation should not be used when you know the debt is accurate, but you are just trying to delay collection action.

Time Frame

Under the Fair Debt Collection Practices Act, you have 30 days from when you first receive a written "validation notice" from the collector to request validation of the debt. You should do this through a written response to the original notice. Once the creditor receives your request, they cannot contact you about the debt again, until they have sent this validation.

Debt Validation Requirements

The requirements for what constitutes an acceptable validation of the debt are open to interpretation. The creditor must have a document that clearly shows the amount of the debt, the interest terms and the name and address of the original creditor. This might include a bill or your original promissory note. The courts have deemed a copy to be sufficient, if the original cannot be obtained, so long as it is readable and there is no reason to question the authenticity. The validation should clearly show how the current balance has been reached through the history of payments, fees and interest.

Enforcement

The guidelines for debt validation are set by the FDCPA, which is a federal statute. The enforcement, however, is handled through the states. If you belief a debt collector has not met their debt validation requirements, you should report them to your state attorney general. Keep a copy of all written correspondence with the debt collector and your records of the original debt to support your case against them.