Proof of Debt and Debt Collectors
The First Step to Restore your Good Credit Rating
Oct 22, 2009 Katrina Rief-Derrico
The current economic state of our country has created a boom in the debt collection industry. Many banks and credit card companies are being taken over by larger companies, while others are merging in an attempt to regain strength. During this transition period a consumer’s debt may be bought and sold many times. This can make it extremely confusing to debtors who are making an effort to repay their loans.
Not only are accounts sold among banks during a take-over but also when they are found to be un-collectable by the original creditor. These debts are sometimes sold on a secondary market made up of debt collection agencies and debt collectors. If a lending institution has been bought, sold or merges it is possible their uncollected accounts, also known as bad debts, have been sold several times, resulting in many different agencies trying to collect the same debt from a consumer.
The first step in any credit repair or correction is the validation process. This will ensure any debts being repaid or any collections showing up on a consumers report are valid. Completion of this step will also ensure the amounts being repaid are correct and that the individual is actually responsible for them.
Required Debt Validation Notice
Under the federal rules and guidelines of the Fair Debt Collection Practices Act (FDCPA) debt collectors are required to send all debtors a validation notice within five days from the date they first spoke to the debtor regarding that particular debt. The notice must be in writing and must inform the debtor of their right to dispute the validity of the debt. Any disputes must be presented to the creditor within 30 days and should be provided in writing.
Proof of Debt
After being contacted by a collection agency consumers have a right to request validation and proof of the debt they are being accused of owing. If the debt is disputed, the collection agency is prohibited from contacting the consumer until they have provided them with the requested information. Consumers have a right to dispute the entire debt or any portion of that debt and have a right to know who the original creditor was.
Any request should be in written form and mailed via certified return receipt through the local US Postal Service. In the instance there is a lawsuit, this procedure will provide the consumer with valid proof of the letter’s mailing and a signed, dated receipt when the creditor received it. Below is a sample Request for Validation of Debt to be placed on personal letterhead.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
[Creditor Name and Address]
Re: Proof of Debt Requested for [Account number]
To Whom It May Concern:
This letter is sent in response to your [phone call/letter] I received on [date]. I am exercising my rights under the Fair Debt Collection Practices Act [15 USC 1692e] § 809 and request that you send me validation of this debt.
If you do not comply with this request, I will immediately file a complaint with the Federal Trade Commission and the [your state here] Attorney General’s office. Civil and criminal claims and penalties will be pursued if you do not comply with this request.
Sincerely,
Your Name
Mailed on ____/____/___ Certified Return Receipt
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Required Action by Debt Collector
Upon receipt of a request for debt validation, the debt collector has 30 days to provide the consumer with the information requested. Verification must include documentation from the original creditor, a printout of the account is not sufficient.
If the debt collector fails to provide this information they must discontinue collection efforts and are prohibited from reporting said debt to the credit report bureaus.
Proof of Debt
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