Just because someone claims you owe a debt doesn’t mean that you actually do. And, even if you know that the company calling you is legitimate and the debt they’re talking about is real, you have rights.
And all of them say that, before you pay a single cent to anybody claiming to be a debt collector, you need to make that collector validate and verify their claims. This is typically done via a debt validation letter and a debt verification letter.
What is a Debt Validation Letter?
A debt validation letter is a letter that a debt collector sends to you to “prove” that you owe them the money they say you owe. If you’ve been sent to collections before, you’ve probably received these in the mail.
If you receive a phone call from someone claiming to be a debt collector but don’t have one of these letters from them, request one (in writing.) Every debt collector is required to send a validation letter within five days of their first contact with you as a key first step in their collection efforts.
Do You Need a Debt Validation Letter?
The short answer? Yes. You absolutely need a debt validation letter. Even if you’re pretty sure the debt the collector is after is legitimate, you should always make them validate their claim.
Why? Because debt collectors often get stuff wrong. For example, they often try to collect the debt from the wrong person, because they start calling without doing basic research.
As a consumer, you have the right to confirm that any debt you’re being contacted about is real, and that you’re not being unduly harassed. These rights are outlined in the Fair Debt Collection Practices Act. There are even multiple agencies — like the Federal Trade Commission, the Consumer Finance Protection Bureau, and the major credit bureaus — that are tasked with making sure your rights are respected.
In 2020, the Federal Trade Commission (FTC) received more than 80,000 complaints from consumers about debt collectors, and 49% of those complaints were from consumers reporting attempts to collect debts they didn’t owe. It’s possible that your “debt” isn’t real. The only way to make sure is to make the debt collector validate the debt.
What Should be Included in a Debt Validation Letter?
In order for the validation letter to be considered legitimate, it must include several specific things, including:
- How much you owe to the original creditor
- Which creditor the collector represents
- A chance to dispute the amount of the debt within 30 days
- Confirmation that if you dispute a debt within the 30-day time frame that debt will then be verified by mail within another 30 days
- A disclosure that if you request more information about your creditor, that information has to be provided within 30 days of receiving the request.
What To Do After Receiving a Debt Validation Letter from a Collection Agency?
The first thing you should do after receiving a debt validation letter from a debt collector is demand that the collector verifies the debt.
This is done by sending what is known as a debt verification letter.
This is a vital step because, in spite of what might be included in your initial validation letter, the debt collector could still be wrong. Worse, in some cases, the “debt collector” could be an individual or company that is just trying to scam you out of your paycheck. There are a lot of people out there claiming to be debt collectors who prey on consumers’ fear and are counting on you to not know the rules and laws of debt collection.
When you first contact the debt collector after receiving your debt validation letter, be sure to get a mailing address at that time. It will simplify the process of sending the debt verification letter.
It is important to take these steps immediately after contact. Do not delay. Legally, you only have thirty days from the date of your first contact with the debt collector to request verification — unless you’re close to the debt aging out of your state’s collections statute of limitations.
What is the statute of limitations on debt?
The statute of limitations assigns a set amount of time for initiating certain kinds of legal action against you. After the statute of limitations runs out, your unpaid debt is considered to be “time-barred.” If a debt is time-barred, a debt collector can no longer sue you to collect it.
On debt, the statute of limitations is between three and six years, but it can be as high as 10 or 15 years in some states. Before you respond to any debt collection notice ― before you even start the verification process ― find out the debt statute of limitations for your state. If the statute of limitations has passed, there may be less incentive for you to pay the debt.
Because the statute of limitations is different for every state, you’ll need to confirm this with your state attorney general’s office. If your debt is very close to the statute of limitations, the best strategy might be to not respond at all. Sending a debt verification letter can increase the amount of attention a debt collector focuses on you, which means they could notice that your debt is about to expire, and could lead to swift action against you.
If you think the statute of limitations might work in your favor, seek legal advice before making a decision about whether to ignore the debt validation letter.
What’s the Difference Between Debt Validation and Debt Verification?
This can get confusing because many sites use these terms interchangeably. For the most part, however, this is how it breaks down:
A debt validation letter is a letter sent from the creditor or debt collector to you, letting you know that they are attempting to collect a debt.
A debt verification letter is a letter you send to the creditor or debt collector, demanding that the collector proves that the debt they are after is legitimately yours and that the details they have are correct. It serves as your official debt validation request.
Want to know more about the differences between debt validation and debt verification? You can watch this video:
What if the Debt Collector Fails to Verify the Debt?
Failure to verify the debt is a violation of the Fair Debt Collection Practices Act (FDCPA). If the debt collector who contacted you fails to verify your debt, file a complaint against them with the Consumer Financial Protection Bureau (CFPB).
If a debt collector fails to verify the debt and still comes after you, trying to collect payment? That’s a violation of your rights as a consumer, and they can get in big trouble. You can even take legal action against them.
How to Write a Debt Verification Letter
A debt verification letter does not need to be complicated or even very long. It does, however, need to include the following information:
1. The date and method of your first contact with the debt collector.
2. A request for verification of the debt.
3. Request for proof that the debt was legally obtained by the debt collector.
Proof can include requests like:
- Copies of the contract between the debt collector and your original creditor for the purchase of your debt
- Documentation verifying the age of the debt and how long the account is past due
- Documentation proving the exact amount you owe
- The name of the creditor or financial institution
- The account number for the debt that’s past due
- A copy of your last billing statement with your original creditor or lender (debt collectors are not allowed to ask you to pay more than you actually owe)
- The address of the original creditor
- Documentation of the last payment made on the account (the date and amount, etc.)
- Proof that the debt is still within the statute of limitations for collections.
DO NOT EMAIL THIS REQUEST.
Instead, compose the letter like you would write a formal business letter, and send it to the debt collector via USPS Certified Mail with Return Receipt.
This way, you’ll have proof of your sending of the letter, and you’ll receive proof of its delivery to an actual person because the recipient is required to sign the return receipt. If the debt collector tries to claim that they never received a verification request from you, you’ll have these receipts to prove that you followed the letter of the law (and that they are lying).
If you’re feeling confused about exactly what to write, fret not! The internet is filled with sample verification request letters. The sample letter composed by The Balance is particularly good (though they incorrectly call it a “validation letter”.)
Debt Verification Letter Templates
In addition to a plethora of sample letters, there are also lots of templates out there that you can use to help compose your debt verification letter. Here are just a few:
Final Steps If Your Debt Isn’t Verified
Here is something that can be frustrating: the debt collector is not obligated to fulfill all of the requests you make in your debt verification letter. Their response simply must include information about the original creditor, how much is owed to them, and the name of the individual or company that now owns the debt.
If, however, a debt collector fails to verify your debt at all, they are in violation of federal law. Report the collector to the FTC and the CFPB.
If the collector continues to contact you or demands payment before validating and verifying the debt, or after the deadline for verification has passed (typically a 30-day period after receiving your request) they are in violation of the law. Not only should you file complaints against them with the FTC and the CFPB, but you would also be well within your rights to take legal action against the collector. Many law firms offer a free initial legal consultation. If you feel your rights have been violated, it’s worth getting some legal advice to see whether you have a valid case.
Whatever you do, DO NOT ACTUALLY MAKE PAYMENT ON AN UNVERIFIED DEBT.
The Bottom Line
Nobody likes dealing with debt collection agencies, even the legitimate ones who follow the rules. Collection activity is designed to make you feel uncomfortable so you’ll just pay up. What is important is that you remember that you do have rights and you are allowed to exercise them. The debt validation and verification letters are a good place to start regaining your power.
Once you’ve addressed these steps, start a plan to get control of your personal finances and address debt management. It will make your financial life a whole lot easier once you have a plan in place.
Debt validation and verification can be a very confusing process for a lot of people. Here are some answers to the questions we see most:
Can I Use a Debt Verification Letter for Credit Repair?
Yes! Debt verification letters — especially if you can prove that your debt was never validated or verified — can be used to correct information on your credit report. Each of the three major credit reporting bureaus — Experian, Equifax and TransUnion — will have instructions for submitting this information to them.
How Does Debt Validation Affect Your Credit Score?
Debt validation does not have an immediate effect on your credit score. Validation letters are simply tools for collecting a debt. By the time you receive a debt validation letter, if the debt is valid your credit score has probably already taken a pretty big hit, particularly because even one payment that’s late by more than
A debt verification letter, however, could play a role in raising or lowering your score. This is because these letters are used to dispute information contained in your credit report. If that means collections debt is erased, that’s good! If the debt is verified as legitimate, however, and you aren’t able to pay it off, it could get listed on your report and lower your score.
How Can I Tell the Difference Between a Legitimate Debt Collector and a Scam?
The quickest way to tell the difference between a legitimate debt collector and a scammer is to demand validation and verification of the debt. Never pay anything on first contact! If they are The quickest way to tell the difference between a legitimate debt collector and a scammer is to demand validation and verification of the debt. Never pay anything on first contact! If they are legitimate, they will provide you with proof of the alleged debt and their legal claim to it. Ask about the type of debt — is it credit card debt? Student loan debt? Medical debt? You can use this proof to research the company and find out if they are on the up and up. A good place to start is by contacting the credit reporting bureaus and asking them for information about your debt collector. Are they even licensed to collect debts? Don’t pay them a cent until the validity of the debt has been confirmed.