What are the steps in validation of debt?

Check out the 7 steps on how to seek validation of debt and deal with collectors and CRAs.

1. Request a validation of debt: Send a request letter to the CA asking them to validate your debt. Just check out a sample debt validation letter so that you’ll know how to format the letter. The letter should be sent via certified mail with a return receipt request.
2. Check if the CA is licensed: You need to wait for a reply from the CA. The agency may send you a letter with the details you’ve asked for. Once the collectors validate your debt, you need to check if at all they are licensed to collect debt in your state. However, not all states impose licensing requirements for a CA. Such states are California, Georgia, Iowa, Kansas, Kentucky, Montana, Oklahoma, Pennsylvania & South Carolina.
3. What if the CA violates collection laws: If collectors need license to collect debt in your state and the CA contacting you isn’t licensed, send them a letter stating they’ve violated the state collection laws. You may also inform them that they may have to go through prosecution and pay fines.
4. What to do if the CA doesn’t validate debt: If the CA doesn’t send you a satisfactory proof, then you need to send them the documents given below:
   • A copy of your validation letter
   • Copy of the return receipt
   • A statement that the CA has violated the FDCPA

   As per FDCPA, if the collection agency doesn’t validate your debt, then they can no longer collect the payments and they shouldn’t contact you anymore.

5. Remove collection listing: Under the FCRA, collection agencies should not report a negative entry to the CRAs if they don’t validate your debt. You need to send a letter asking them to remove the collection listing. You should also inform them that if they don’t remove the collection, you might sue them on account of violation of the FDCPA. Wait 15-20 days for a reply from the debt collectors. They’ll either remove the negative listing or else they won’t respond at all.
6. Sue collector if listing isn’t removed: If the collectors don’t remove the collection listing from the report, then you can file a lawsuit in the small claims court on account of their violation of the FDCPA. Make sure you send out the lawsuit papers to the CA as well. However, prior to filing the lawsuit, inform the CRAs that the CA is simply not trying to remove the collection.
7. Know how to deal with the CRAs: If the CRAs verify the collection, you’ll have proof of further collection activity from the CA. Further collection activity without debt validation is a violation of the FDCPA. You need to inform (with proof) the CRA about such a violation. You can even request the method of verification of your collection listing (as allowed by the FCRA). In case the CRAs do not share any details of such verification, tell them that they are violating the FCRA.

   You can file a lawsuit against the CRA on the basis that they couldn’t provide you with a satisfactory method of verification. This can be done through the small claims court or your state/federal court. Just inform the CRAs about the lawsuit, as there’s a chance that they may contact the collection agency and find out that the debt may not be legitimate. In such a case, the CRA will delete the collection listing asap.

Can you dispute debt after validation period?

You can send in a validation letter to your CA after the 30-day period. But the collectors aren’t legally obligated to give you a reply. They may also not stop collections on the account. So, you shouldn’t dispute debt after the validation period is over.

Debt assigned to CA – how does it affect validation?

If your debt is assigned to a collection agency, it implies that they don’t own it legally. So, you cannot owe them money because the assignment is not a contract between you and the original creditor. However, you may have signed the contract stating that you’ll be responsible for payments to the creditor and its assigns. Such a document is actually a contract between you, the creditor and the collector. Thus, if the CA provides you with a copy of that contract, then you’ll have to acknowledge the debt.

How does validation and debt verification differ?

In case of validation of debt, the collector is required to send copies of the debtor’s contract with the original creditor. But in debt verification, the collector simply provides a written statement having the name and address of the original creditor and the total debt amount. However, the time limit for verification is similar to that of validation.

As per FDCPA, CAs should stop collection activities as soon as they receive your request for validation or verification within the 30-day period. They can resume collection efforts only after they’ve sent you a satisfactory proof that you owe the debt.

With debt validation, you can avoid harassment by collection agencies. It gives you a chance to verify whether or not you legally owe the debt. Once the CA verifies your debt, it becomes easier for you to plan how to pay back your dues. But make sure you’re well aware of your rights as a consumer and can use them to your benefit just in case the CA doesn’t validate your account and continues its attempts to collect your debt.