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In this Article: Everything you need to know about a Debt Validation Letter.
Has a debt collection agency called you demanding a payment? Before you fork over any money, make sure the debt is actually yours with a debt validation letter.
Fortunately, the Fair Debt Collections Practice Act (FDCPA) protects consumers from debt collectors, creditors, and credit bureaus.
Under the FDCPA, it is your constitutional right to request a debt validation letter from a creditor, which will include pertinent details about the debt you owe.
Keep reading to find out what a debt validation letter is, how to request one, and why they are essential for consumers.
What is a Debt Validation Letter?
A debt validation letter is a document creditors will mail to you that outlines details about the debt they claim you owe. Essentially, it is “proof” that you owe the debt.
According to the FDCPA, a debt validation letter will include:
- The Name of the Creditor (Debt Collection Agency). This is the agency that is requesting payment from you.
- Mailing Address of the Collection Agency
- A statement that explicitly outlines that if a consumer does not dispute the validity of the debt within 30-days of the first contact, then it is assumed valid by the debt collector.
- If you contact the creditor requesting for more information or to dispute it, then the debt collector will provide verification of the debt by mail.
- A statement that if you request more information about the original creditor (within 30-days), then the debt collector will provide the consumer with the specific name and mailing address of the original creditor if it is different.
- While this may seem confusing at first, a debt validation letter will tell you how much debt you owe and who is seeking the payment. The key takeaway is that you only have 30-days after they first contact you to request a debt validation letter.
- Furthermore, after you request a debt validation letter, the creditor only has 5 days to provide amplifying information. After 30-days, you can no longer ask a debt collector to verify your debt, so time is of the essence.
What to Do If You Receive a Debt Validation Letter
There are a few things you can do if you receive a debt validation letter from a debt collector or creditor. It is important to note that whatever you decide to do, you only have 30-days, so act quickly.
After you receive a debt validation notice, you need to do a quick fact check.
- Confirm the Debt is Yours. Do you remember owing money to the person requesting? Maybe you forgot to pay a medical or utility bill? Whatever it is, confirm that the debt is actually yours. If the debt is, in fact, yours, then you need to either pay it off or negotiate a debt settlement.
- Request Additional Information. Maybe you are not sure if you owe money and want more information about the debt they are claiming you owe. To request for more information, send the debt collector a debt verification letter via certified mail.
Next, obtain a copy of your credit report and see if this “collection account” is appearing. If it is, then this is not good.
Debt Validation vs Debt Verification Letters: What is the Difference?
Remember, a debt validation letter – or debt validation notice – is a document that debt collectors are required by law to send to consumers. This document contains information about the debt you owe, name of creditor, and date of the debt.
A debt verification letter is a document you send via certified mail to the debt collector asking for more information.
If you are sending a debt verification letter, make sure you send it in the mail because this leaves a “paper trail,” which will bolster your case if you decide to pursue legal action or face legal ramifications.
Keep reading to find out how to write a debt verification letter, who to send it to, and what to include.
What to Include in a Debt Verification Letter?
Debt validation letters are designed to protect consumers and inform them of their rights. And it provides amplifying details about the debt you owe, so yes, debt validation notices are important to pay attention to. But this information overload sometimes confuses consumers.
If you still have questions, then you need to write the debt collector a debt verification letter.
In your verification letter, you want to make sure you request additional information pertaining to:
- The Debt Collector: Ultimately, you want to know who is seeking payment. Ask for the name of the original creditor, phone number, and their physical mailing address. And make sure you ask for proof – verification – that you are the one who owes the debt.
- Original Creditor Information: Believe it or not, debt is continuously bought and sold between two different entities. The debt collector may have purchased your debt from a utility company, hospital, or medical provider – just to name a few.
- Amount of Debt Owed: The debt collector should be able to tell how much you owe exactly. Ask if this includes any collection fees, interest, and how those variables are calculated.
- Date Debt Incurred: When did this debt take place? How long ago was it? Ask the debt collector if the statute of limitations has expired.
- Age of Debt: This will help you determine whether you are within the statute of limitations or not (varies by state).
- Debt Details: What is the debt for? This is important to know as you begin to jog your memory and try to remember if you actually do owe this debt or not.
- Authority: Is this a licensed debt collector? Ask them to provide a copy of their license and verify if they are even allowed to collect debt in your state residence.
While there is certainly more you can include in your debt verification letter, these are essential details you certainly don’t want to leave out.
How to Write a Debt Verification Letter
Do not overcomplicate writing a debt verification letter. The Consumer Financial Protection Bureau (CFPB) provides five sample letters for you to utilize as you begin to draft your letter.
Their five debt verification sample letters were designed to help consumers deal with debt collectors and identify common problems most people run into.
Sample Debt Verification Letter
Here is a quick example of a debt verification letter. This is strictly for educational purposes and is not to be construed as legal advice; however, it will serve as a strong foundation as you begin to craft your letter and send it to the debt collector.
This information was synthesized from a sample letter provided by the Consumer Financial Protection Bureau (CFPB) and is available for public use.
Warning: This Sample Letter is Not Legal Advice and is only to be used for educational purposes.
[Your return address] Date]
[Debt collector name]
Re: [Account number for the debt, if you have it]
To Whom It May Concern:
This letter will serve as a formal request for verification of the debt you are trying to collect.
You contacted me by [phone/mail], on [date], and identified the debt as [any information they gave you]. This debt verification request is protected under the Fair Debt Collection Practices Act (FDCPA), 15 USC 1692g Sec. 809 (8).
Please provide me with the name and address of the creditor to whom the debt is currently owed, the account number, and the specific amount owed. Be advised, if this debt started with a different creditor, please provide the formal name, address of that original creditor, and the associated amount. Additionally, state the amount of the debt when you obtained it and when that date was.
Provide verification and documentation that there is a valid basis for claiming that I am required to pay the debt to the current creditor. If possible, please include a copy of a written agreement; an original billing statement; and a billing statement that includes any additional interest, fees, or charges added since the last billing statement from the original creditor with itemization showing the dates and amount added. Please explain in detail how the added interest, fees, or other charges are calculated and authorized under the agreement creating the debt or are permitted by law.
If you are asking that I pay a debt that somebody else is or was required to pay, identify that person. Provide documentation about why this is a debt that I am legally required to pay. Please explain whether this debt is within the statute of limitations, when the statute of limitations expires for this debt, and how this date was determined.
Before I provide any information, I would like to verify the validity and authority of your firm to collect debt in my state residence. Provide a copy of the date of the license, name on the license, license number, and the name, address, and telephone number of the state agency issuing the license.
If you are from out of state, please provide the date of the license, name on the license, license number, and the name, address, and telephone number of the state agency issuing the license you operate under.
Thank you for your cooperation and assistance as I begin to gather the necessary details and documents to make an informed decision.
What NOT to Include in a Debt Verification Letter
At no time in your letter should you include any personal financial information. Do not provide a credit card number, bank account routing number, SSN, or other sensitive information that can be exploited by the debt collector.
The only account number that should be used in your debt verification letter is the account number they provided when they first contacted you.
Only provide this information after you do your due diligence and verify this is a legal debt collection agency that meets the legal requirements to lawfully collect the debt from consumers.
Where Do I Send My Letter?
After you finish drafting your debt verification letter and tailoring it to your individual financial situation, make sure you send it to the debt collection agency that contacted you via certified mail.
DO NOT email your letter or submit it online. While this is more convenient, it does not leave a paper trail, which you absolutely should want, because this protects you in case they do not respond or move forward with legal action.
What Happens After I Send My Debt Verification Letter?
After you send your debt verification letter, the debt collector has 30-days to respond. Once they respond, you should be able to truly understand your situation and create a game plan.
There are two outcomes from their response.
1. Debt is Verified
If the debt collector provides all the necessary documentation that verifies you do in fact owe them money, and they are legally allowed to collect the debt, then you need to pay them.
After you pay them, you need to remove the collection from your credit report and begin the processes of repairing your credit.
Fret not, credit repair companies like Credit Saint specialize in removing negative items from your credit report. They have removed thousands of negative items literally and successfully repaired their client’s credit, ultimately leading to an increase in their credit score.
Want to Learn More? Read our Credit Saint Review.
2. Debt Cannot Be Verified
If the debt collector fails to provide verification that you owe that debt, then you can demand them to stop collection activities and remove the negative collection from your credit report.
Sadly, debt collection agencies are a pain to work with. To ensure they actually remove the negative item from your credit report, contact all three credit bureaus (Equifax, TransUnion, and Experian) each month asking for a status update.
Do not stop reaching out until they successfully remove the negative item. Your credit score will not increase until this is done! So, if you want to improve your credit score, then you better follow up and keep applying the pressure.
If need be, seek legal counsel from a credit attorney. Your credit score impacts more than just your personal finances. It can also affect employment eligibility and career aspirations.
Statute of Limitations
Depending on what state you reside in, your statute of limitations on debt may have expired. This is known as “time-barred,” which means a debt collector can no longer sue you. While you may avoid legal action, your credit score is still damaged.
Regardless if your statute of limitations expired or not, your credit report will still show this collection. Debt collectors can still proceed with all collection activities (phone calls, letters, emails, ect.), but they cannot legally sue you in court.
These resources below will help you identify and better understand your statute of limitations:
Is Sending a Debt Validation Letter Safe?
Yes, sending a debt collector a debt validation letter is safe and protected under the Fair Debt Collection Practices Act (FDCPA) and enforced by the Federal Trade Commission (FTC). Validating your debt is a protected right and is designed to protect the consumer.
If for some reason, you feel as if your rights were violated during the debt validation process, you can seek legal counsel and file a consumer complaint with the CFPB.
Debt Validation Letters Resolve Errors
Let’s face it. Debt collectors, collection agencies, and the credit bureaus can and will make mistakes. Add on the fact that debt is continuously exchanged between entities, and reporting errors become even more prevalent in a broken industry.
Common Debt Validation Errors:
- Wrong Account Number
- Similar Names
- Clerical Issues
- Made Payment Not Documented
There are literally hundreds of ways a debt collector or one of three credit bureaus can make a mistake and report the wrong information. Everyone makes mistakes.
A debt validation letter holds these external entities and reporting bureaus accountable. This document helps mediate issues and resolve errors that were wrongfully reported to the credit bureaus.
Wrapping Up: Debt Validation Letters
Ass you can see, requesting a debt validation notice and sending a debt verification letter are two powerful tools at your disposal if a debt collector is seeking payment from you.
Both are protected under the FDCPA, so use them wisely and to your advantage. Who knows, maybe a brief letter is all that you need to do to get an annoying debt collector off your back.