Debt validation: What you should know

Has a collection agency contacted you but you’re not sure whether or not you legally owe the debt? In such a case, you should ask for a debt validation. It is the duty of the debt collector/collection agency to prove that you owe the debt. The agency should also prove that it possess the right to collect the money.

Debt validation: What does it mean?

Debt validation is a process wherein you request the collection agency to prove that your debt is a valid one. In other words, you ask the debt collector to send a proof that you legally owe the debt. Under the FDCPA (Fair Credit Collection Practices Act), it is the duty of the debt collector to prove that you owe the amount of money.

Often people confuse debt validation with debt verification; however, they are not same. In debt verification, the collection agency provides you with a written statement with the name and address of the original creditor along with the total debt amount.

When should you go for a debt validation?

You should go for debt validation when you’re not sure whether or not you legally owe the money. You may also try for debt validation when you’re sure that you’ve repaid the loan amount, yet the collectors are asking for more.

How can you ask for a debt validation?

In order to know whether or not a debt is a valid one, you will have to submit a written debt validation request. Apart from disputing the entire debt, you can also dispute a part of it or request to know the name of the original creditor to whom you owe money.

Make sure you send the validation letter via certified mail with a return receipt request. You can use the documents for future reference, if required.

How the collection agency validates your debt

After receiving your debt validation letter, the collection agency/debt collector is supposed to provide you with the following details.

• The name of the creditor to whom you owe money

• The amount of your outstanding debt

• Proof that the collection agency is assigned to collect the money

• A copy of the original contract

• A statement of your payment history regarding the particular account

Make sure you verify your signature in the copy of the original contract.

Can you dispute a debt after the end of the validation period?

As per FDCPA, the collection agency is supposed to send you a debt validation notice within 5 days of verbal communication. You need to validate the debt within 30 days as otherwise the collector possesses every right to assume that the debt is a valid one. However, the collector can make attempts to collect the debt until they receive the validation letter.

As per FDCPA rules, a collector is supposed to stop the collection activities until it provides you with a proof that you legally owe the debt.