Debt Validation

One of the most powerful tools you have under the federal Fair Debt Collection Practices Act (FDCPA) is requiring a debt collector to verify the amount and validity of the debt it's trying to collect.

To validate the debt, you must act quickly once the debt collector contacts you.

The collection agency usually gives you specific information in its first letter, which is generally called a "debt validation notice," including:

• the amount of the debt
• the name of the creditor to whom the debt is currently owed
• you have 30 days to dispute the validity of the debt
• if you don't dispute the debt's validity, the collector will assume it is valid
• if you do dispute the debt's validity within the 30 days, the agency will send you verification of it (if you miss the 30-day deadline, the collector might still respond even though it's not legally required to do so), and
• if you send a written request within that 30 days for the name and address of the original creditor, the agency will provide it, if different from the current creditor. (15 U.S.C. § 1692g(a)).

If the initial communication doesn't contain this information, by law, the agency has five days from the initial contact to provide it to you. (15 U.S.C. § 1692g(a)). The notice can be written or electronic. (An oral notification is allowed when you're first contacted, but not later. (12 C.F.R. § 1006.34(a).)

Additional Required Information

An amendment to the FDCPA, effective November 30, 2021, significantly expands the law's requirements for debt validation notices by requiring more information and additional disclosures, including:

• information that helps a consumer identify the debt being collected
• information about consumer protections
• information to help consumers exercise their rights under the FDCPA, including a tear-off dispute form with pre-written prompts for disputing a debt, and
• disclosures required under certain laws. (12 C.F.R. § 1006.34).

Under the amended law, collectors can provide validation information orally in an initial communication despite the large volume of information the law requires in the notice. (12 C.F.R. § 1006.34).

If You Request Verification, Collection Must Stop

Usually, the debt collector may immediately take steps to try to collect the debt. But if you send a written request for verification of the debt and the name and address of the original creditor, the collection agency must stop its collection efforts. It can't resume them before double-checking the debt information and mailing you the verification, including the original creditor's name and address.

During the 30-day period, the collector can continue attempts to collect the debt from you until they get your validation request. So, debt collectors generally can take legal action, like filing or continuing a lawsuit, during the 30-day period for disputing a debt, provided the collection activity does not overshadow and is not inconsistent with the consumer's right to dispute. (15 U.S.C. § 1692g(b)).

If you receive notice of a lawsuit, make sure your response is timely—the deadline might be different than the 30-day deadline to request verification of the debt.

Why Is Debt Validation Important?

Mistakes often happen in debt collection. Validating a debt validation allows you to verify the accuracy of a debt to make sure you really owe it. It also allows you to exercise your consumer protection rights and resolve an outstanding debt.

Also, if you verify the validity of a debt, you won't become the victim of a debt collection scam where you pay off a debt you don't actually owe.

When Debt Validation Can Help

Checking who the original creditor is might help you decide whether you have grounds to dispute the debt. Also, collection agencies and original creditors are busy. While verification might seem as if it should be easy, it might take several weeks or longer.

Requesting verification is particularly helpful if the debt has been sold, especially if it has changed hands more than once. Often, debt buyers have little information about the debts they own. They might try to collect the wrong amount or from people with similar names who don't owe the debt. If the debt collector can't verify what you owe, you might be able to reduce or even eliminate the debt.

But if you don't dispute the validity of the debt (or part of it) or don't request the original creditor's name and address within 30 days of receiving the first collection letter, the agency can assume the debt is valid and continue collection efforts during the 30 days and after. The debt collector has a right to use all legal collection efforts against you.

Be Cautious If You Think the Statute of Limitations Is About to Expire or Has Expired

If you think the statute of limitations for the debt is about to expire or has expired, be cautious when sending a letter asking the collector to validate the debt. You don't want to inadvertently acknowledge the debt in your communications, which could restart the limitations period.

How to Request Debt Verification

To request verification, send a letter to the collection agency stating that you dispute the validity of the debt and that you want documentation verifying the debt. Also, request the name and address of the original creditor.

The Consumer Financial Protection Bureau (CFPB) provides a sample debt validation letter (click on the "I need more information about this debt" letter on the CFPB website) that you can tailor to your particular situation.

Getting Help

If your debt collector didn't provide you with the above information in your debt validation letter or didn't send the letter within five days of first contacting you, you can submit a complaint with the CFPB. You can also report the collector to your state's attorney general.

Also, if a debt collector violates the FDCPA and you sue the collector in court, you might be able to recover different types of damages, including monetary damages, attorneys' fees, and more. (15 U.S. Code § 1692k). Or you could have a defense or counterclaim if the collector sues you.

If you think a debt collector has violated the FDCPA when trying to collect a debt from you, consider talking to an attorney to get advice about your options.