A debt validation letter is a formal letter written by a consumer requesting for proof of evidence for a claim/debt issued against them. It is a right that consumers enjoy under the Fair Debt Collection Practices Act.
It is issued within 30 days after receiving a notice of an attempt to collect. At some point, people can find themselves being billed for money they have no idea why they are being charged.
Laws (15 U.S. Code § 1692g(b))
Debt Validation vs Debt Verification
Despite there being a significant distinction between debt validation and debt verification, these two terms are often wrongly used interchangeably. However, they are both used when a consumer (the debtor) wishes to find out if a debt issued to them was wrongfully issued.
A debt verification letter is sent by the debtor containing the debtor’s name and address so that the creditor or collection agency can confirm that indeed the debt was issued to the right person/account. A verification letter can hardly be used to contest a debt in court as the information provided is not enough to make a claim in court.
The Fair Debt Collection Practices Act (FDCPA) states that every consumer is within their rights to validate their collections debts. The FDCPA, however, does not provide a clear-cut definition of what a legitimate debt validation constitutes. This creates a loophole for fraudulent or wrongful debt collection as upon request for validation; some creditors just issue any account documentation which is may not be viable in front of a court as what is legally needed is signed proof, e.g. original contract that the consumer sought legitimate debt validation.
Components of a Debt Validation Letter
To ensure that a debt validation letter captures every intended information, there are several components found in a standard debt validation letter.
Sender and recipient information
At the beginning, the sender’s (debtor) and the recipient’s (creditor or collection agency) name and address are provided, starting with the sender’s information as with all formal letters. This is to declare the involved parties officially. Also, to be included is the date when the letter was written.
The purpose of the letter and amount allegedly owed
The next step is to proclaim the purpose of writing the letter, which in this case could be an unfamiliar notice of debt, bill, error on your credit report, or a notice of legal proceedings to collect a debt. Ensure to include the amount which was deducted from your account.
Referencing the method, e.g., call or mail and the date when initial contact was made, is advised.Collection agencies make numerous collections, and by referencing the exact method and date, the collector can then double-check if they sent the said notice or if there was a mistake made in the address. This will also be evidence of the events that took place should the issue proceed to court.
The debtor then asks the creditor to validate the mentioned debt as proof that it was sent or billed to the right person. This can be in the form of invoices, account numbers, name and address of the debtor, and purchase date. If the creditor can provide more information, such as the total debt breakdown, they should be urged to do so.
The name of the creditor seeking payment
Follow this up with a request of who exactly is the creditor seeking payment in this case. Demand information such as the name and address of the creditor. In this section, the debtor should request details about the debt such as the reason why the creditor believes the debt was gained, the amount last billed to the debtor, whether they are collecting on behalf of a third-party, the initial date of the debt, and the account believed to be obligated for payment. In cases where the debt is part of another full amount owed, the creditor is requested to declare the expected full amount.
A statement that the debt is assumed valid
The letter should include a statement that highlights the debtor is aware of their rights which dictate that the debt is assumed to be valid unless disputed by the debtor within 30 days of the first contact. This ensures guarantees that no further deductions are made until proof of debt is provided.
A statement or request
This is a statement that declares that the collector is obligated to verify the debt by mail within 30 days should the debtor dispute the alleged debt or request information regarding the debt through a debt validation letter. Any information about the debt needed should be specified.
Closing and signature
Close the letter by welcoming any cooperation. Finally, you can sign the letter to make it official.The author can choose to include a Cease-and-Desist addendum to limit the creditor from making further contact until they provide proof of debt or until you make payments where necessary.
Kindly note that throughout the letter, always avoid using any statements that may be interpreted as admission to the debt. Remember, this is a document that could potentially be used in court.
Free Debt Validation Templates
When writing a debt validation letter, you want to be persuasive and be clear to ensure that the collection agency complies. For first-timers, it can be a bit confusing to decide on what to include; however, the use of templates can assist you with this. That is why we have provided standard debt validation letter templates, which one can download and customize to suit their requirements. More importantly, they are FREE!
How to Send a Debt Validation Letter
So, how do you make your debt validation letter as effective as possible? Well, you can approach the whole process of sending the validation letter in a few steps to achieve.
These steps include;
Step one: Write the letter
Let’s say your account has been charged for a debt collection whose details you are in doubt, for example, a TV subscription. You probably do not remember if you applied for the subscription or the exact amount charged, and you think you are being wrongfully billed. You may need to check with your creditors about the legitimacy of the debt by writing a debt validation letter. When writing the validation letter, the debtor should ensure that they are not defensive and should just be clear and concise. Be straight to the point and ask the creditor to provide the debtor’s info, such as the name, address and the reason why the debtor is responsible for the debt.
Step 2: Add a cease-and-desist addendum (optional)
A cease and Desist Addendum is based on a right that an individual enjoys under § 805(c), that they can inform a collection agency that they don’t wish to be contacted by any means as they are aware of the existence of the debt. A person can take legal action if the collector does not respect this.
Step 3: Sign the documents
As with all formal documents, the letter must include a signature to be considered legally served in the United States Postal Service. Inclusion of return receipt to confirm that that the creditor received the letter and when they did, is also recommended.
Step 4: Send and wait 30 days
Upon receiving the debt validation letter, the federal law (15 U.S. Code § 1692g(b)) dictates that the creditor has thirty (30) days to carry out their investigation and send their findings confirming the legitimacy of debt to the debtor. Should the creditor fail to respond within 30 days, the debt collection is then deemed legally invalid.
The Right to Request Validation
Under Federal law, a debtor is entitled to request a debt collector to provide proof that indeed they are owed. It ensures that a person does not pay a debt they do not owe, or a collector does not collect in a situation they are not authorized to collect on. Debt validation is time-sensitive, and validation requests should be made within 30 days of the first contact by the debt collector. Requests that are made after 30 days may not be applicable under the debt collection law.
The debt validation request also depends on the means used, requests made over the phone are not considered legitimate, and certified mail should be used.
Under the law, upon receiving a debt validation letter, the collector should cease further collection until they provide legitimate proof of the debt. This means they are not allowed to make contact, phone or mail or list the alleged debt in your credit report.
The Debt Collector’s Response
Should the debt collector fail to send you proof, yet they proceed to make future collections, they would be violating the FDCPA (Fair Debt Collection Act), and legal action would be applicable.
In the case where your account gets assigned to a new debt collection agency, the validation request made to the previous collection agency becomes invalid. Another course of action should the debt collector fail to send proof; you can choose to check the legitimacy of the debt under the statute of limitations and proceed accordingly.
The options include;
- Paying the debt: Paying absolves you of any legal obligation and applies if it falls within the statute of limitations.
- Negotiating for settlement: It remits you of your obligation, and you get to pay a lesser amount
- Ignoring the debt: This is applicable if the debt is outside the statute of limitations; however, collection efforts can carry on.
A debt collection letter will always clarify your doubts about a debt you allegedly owe, whether the creditor responds to your letter or not. A response can clarify if the debt is valid and you pay your dues, or it could declare that it was wrongfully issued, and you get a refund. However, no response, 30 days after issuing the letter, renders the debt no longer legally valid. Always include the means and date of initial contact, amount allegedly owed, a statement of your rights as a debtor and a request outlining the information you need from the creditor to validate the debt. Remember your debt validation letter is only valid if sent within 30 days after initial contact.