Debt Validation in Collection Cases

By Attorney Margaret Reiter

Debt verification (sometimes referred to as debt validation) is a powerful tool available to debtors whose debts are sent to collection agencies. Through debt verification, you can get information about the debt, such as the original creditor and the amount being collected. This allows you to determine if in fact you do owe the debt, the amount is correct, you have a defense to collection, or there is some other mistake.

If you request that the collector verify the debt, it must suspend collection efforts until it complies with the law. Here's how it works. 

Debt Verification: Required Notice from the Debt Collector

The rules regading debt verification are found in the federal Fair Debt Collection Practices Act (FDCPA). According to the FDCPA, in the debt collector's first contact with you, or within five days of the first contact, it must notify you of the following:

• amount of debt
• name of the creditor (or collector) to whom the debt is currently owed (it will be owed to a collector if the creditor sold the debt to the collector)
• that you have 30 days to dispute the validity of the debt
• that if you don't dispute the validity of the debt, the collector will assume the debt is valid
• that if you dispute the validity of the debt, in writing, within 30 days, the collector must send verification of the debt, and
• that if within 30 days you send a written request for the name and address of the original creditor, the collector must provide this information.

How to Request Debt Verification

If you receive a debt collection notice from a debt collector (even if the collector doesn't comply with the law and send you the above notice about your debt verification rights), you should immediately request, in writing, that the collector: (1) verify the debt, and (2) provide you with the name and address of the original creditor. 

Reasons to Request Debt Verification

It's always a good idea to request debt verification. Here's why:

• The amount of the debt might be incorrect.
• The debt might not be yours.
• If the debt collector cannot verify the debt, it cannot continue its collection efforts.
• It provides you with an opportunity to dispute something about the underlying product or service. (For example, that the services you paid for were never provided.)
• It provides you with more information so you can figure out what debt the collector is trying to collect. This is often helpful if you have several delinquent debts, or if the debt is old.

Once You Receive Verification of the Debt

Carefully review the debt verification you get from the debt collector. If you believe the debt is not yours, the amount is incorrect, or you don't owe the debt, send an explanation along with documentation to the collector. For example, send bills showing the correct amount owed, complaint letters regarding the quality of merchandise, an agreement with the creditor to settle the debt for a different amount, or the like.

The FDCPA prohibits debt collectors from collecting payments on a disputed debt. This means that if you have a legitimate dispute, it will likely send the debt back to the creditor.

For comprehensive information on negotiating with creditors and debt collectors, challenging illegal debt collection practices, and disputing debts, get Solve Your Money Troubles: Debt, Credit & Bankruptcy, by Robin Leonard and Attorney Margaret Reiter (Nolo).