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What is Debt Validation:
Make the Collection Agencies Prove You Owe Them
by Lisa Phillips
updated: January 18, 2010
Make the Collection Agencies Prove You Owe Them
by Lisa Phillips
updated: January 18, 2010
A collection agency contacts you regarding a debt. How do you know this is your debt and that
you actually owe the collection agency? What if the debt has already been paid or the Statute
of Limitations has expired?
you actually owe the collection agency? What if the debt has already been paid or the Statute
of Limitations has expired?
Related Topics:
Open Mail from a Collection Agency
It is important to open mail from a collection agency. Do not ignore it. Send your debt validation
request immediately as the collection agency will continue to attempt to collect the debt until
they receive the debt validation request from you. If you do not respond with a validation
request within the 30 days, the collection agency will assume the debt is yours.
Proper Debt Validation Documents
Collection agencies must provide proof you owe the debt to the original creditor. That proof
can be in the form of account statements from the original creditor, payment history from the
original creditor, copy of the original signed loan agreement or a credit card application.
Original account statements usually fill these requirements. Basically you are trying to get them
to prove the following:
Improper Debt Validation Documents
Many unscrupulous collection agencies and junk debt buyers will simply send you a printed
form from their computers. The reason for this is they have no original proof. Oftentimes, debt
collectors will purchase charged off debts, for pennies on the dollar, in bulk. The collection
agency simply gets basic information about you and the amount of debt on a spreadsheet with
many other names, address, and social security numbers of other consumers. They typically
have no other back up documents from the original creditor.
A computer generated statement with the original creditor's name, your name and the amount
the debt collector says you owe is not sufficient for debt validation. These collection agencies
realize they have no original documentation to prove the debt is yours and will often resort to
asking you to "help them" resolve the matter. After you request debt validation, you may get a
letter from the debt collector requesting you send in an old statement from the original creditor
or cancelled check of a payment you made. DO NOT FALL FOR THIS TACTIC! Debt validation
requires the debt collector provide proof and documentation from the original creditor, not you.
Do Not Acknowledge the Debt
Never acknowledge you owe the debt. Make the collection agency or junk debt buyer prove
you owe the debt. Avoid getting on the phone with any collection agency, junk debt buyer or
collection agency law firm. Deal with them via U.S. Mail only. Acknowledging you owe the debt,
making payment arrangements or even making a partial payment on the debt may
re-start the statute of limitations on the debt.
Assigned Debt
A collection agency does not own a debt that has been “assigned” to them. However, in some
cases, original creditor contracts can contain a clause “debtor agrees to be responsible for
payment of this debt to creditor or its assigns”. Under this clause the collection agency is
covered in the contract with the original creditor. In this case you may want to settle the debt
because the original creditor’s assigns (collection agency) is the same as the original creditor.
Purchased Debt
It has become increasingly common for original creditors to sell bad debts to collection
agencies. The collection agencies purchase these debts in large portfolios often for pennies
on the dollar. This does not make them the original creditor. You still have the right to request
debt validation and get proper proof the account belongs to you. Keep in mind the The
Federal Trade Commission has made it clear that a “mere itemization” is not sufficient proof to
validate a debt.
It is important to open mail from a collection agency. Do not ignore it. Send your debt validation
request immediately as the collection agency will continue to attempt to collect the debt until
they receive the debt validation request from you. If you do not respond with a validation
request within the 30 days, the collection agency will assume the debt is yours.
Proper Debt Validation Documents
Collection agencies must provide proof you owe the debt to the original creditor. That proof
can be in the form of account statements from the original creditor, payment history from the
original creditor, copy of the original signed loan agreement or a credit card application.
Original account statements usually fill these requirements. Basically you are trying to get them
to prove the following:
- The collection agency legally owns the debt and is authorized to collect it from you.
- The full amount of the debt can be validated with original documentation.
Improper Debt Validation Documents
Many unscrupulous collection agencies and junk debt buyers will simply send you a printed
form from their computers. The reason for this is they have no original proof. Oftentimes, debt
collectors will purchase charged off debts, for pennies on the dollar, in bulk. The collection
agency simply gets basic information about you and the amount of debt on a spreadsheet with
many other names, address, and social security numbers of other consumers. They typically
have no other back up documents from the original creditor.
A computer generated statement with the original creditor's name, your name and the amount
the debt collector says you owe is not sufficient for debt validation. These collection agencies
realize they have no original documentation to prove the debt is yours and will often resort to
asking you to "help them" resolve the matter. After you request debt validation, you may get a
letter from the debt collector requesting you send in an old statement from the original creditor
or cancelled check of a payment you made. DO NOT FALL FOR THIS TACTIC! Debt validation
requires the debt collector provide proof and documentation from the original creditor, not you.
Do Not Acknowledge the Debt
Never acknowledge you owe the debt. Make the collection agency or junk debt buyer prove
you owe the debt. Avoid getting on the phone with any collection agency, junk debt buyer or
collection agency law firm. Deal with them via U.S. Mail only. Acknowledging you owe the debt,
making payment arrangements or even making a partial payment on the debt may
re-start the statute of limitations on the debt.
Assigned Debt
A collection agency does not own a debt that has been “assigned” to them. However, in some
cases, original creditor contracts can contain a clause “debtor agrees to be responsible for
payment of this debt to creditor or its assigns”. Under this clause the collection agency is
covered in the contract with the original creditor. In this case you may want to settle the debt
because the original creditor’s assigns (collection agency) is the same as the original creditor.
Purchased Debt
It has become increasingly common for original creditors to sell bad debts to collection
agencies. The collection agencies purchase these debts in large portfolios often for pennies
on the dollar. This does not make them the original creditor. You still have the right to request
debt validation and get proper proof the account belongs to you. Keep in mind the The
Federal Trade Commission has made it clear that a “mere itemization” is not sufficient proof to
validate a debt.
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How Debt Validation Works
According to the FDCPA you have the right to request a collection agency validate the debt
they are trying to collect. Essentially, the collection agency must show that you owe the
"original creditor" the debt, not the "collection agency" attempting to collect the debt.
The collection agency is required to send you a debt validation notice within five (5) days of
their first communication with you. The notice should let you know you have the right to
dispute the validity of the debt within thirty (30) days of the date of the notice. Many collection
agencies include the debt validation in their initial correspondence to you.
According to the FDCPA you have the right to request a collection agency validate the debt
they are trying to collect. Essentially, the collection agency must show that you owe the
"original creditor" the debt, not the "collection agency" attempting to collect the debt.
The collection agency is required to send you a debt validation notice within five (5) days of
their first communication with you. The notice should let you know you have the right to
dispute the validity of the debt within thirty (30) days of the date of the notice. Many collection
agencies include the debt validation in their initial correspondence to you.
Debt buying is a growing, lucrative industry
full of mistakes, errors and deceit. Debt
validation forces a collection agency, debt
collector and even a law firm in the business
of debt collection prove you owe the debt. It
is a powerful weapon against collection
agencies and debt collectors which protects
consumers from unfair and deceptive debt
collection practices.
full of mistakes, errors and deceit. Debt
validation forces a collection agency, debt
collector and even a law firm in the business
of debt collection prove you owe the debt. It
is a powerful weapon against collection
agencies and debt collectors which protects
consumers from unfair and deceptive debt
collection practices.