The first thing you need to do is request a copy of your credit report from the three main credit bureaus. Do not call any credit collection companies to arrange a settlement, instead send them a debt validation letter via certified mail.
Debt Validation Process
There are three main parties in the debt collection process. First, there is the original creditor: the person or company who is owed money. This is the credit card company, the doctor’s office, or the landlord who is trying to collect on a bill. When the original creditor gets tired of trying to collect the money, they sell the debt to the second party in the process: the collection agency. The collection agency specializes in collecting debts – they call and send letters demanding payment. The third party is the credit bureau, or the consumer reporting agency. These are companies like Experian, Equifax, and Transunion. Any party, an original creditor or a collection agency, can report a missed payment or other negative financial information to a credit bureau. The credit bureau keeps the information on file and various entities use the credit bureau’s reports to make judgments about an individual, such as a lender to determine whether or not an individual gets a loan and at what interest rate. Note: The Fair Debt Collections Practices Act (FDCPA) is a federal law regulating collections agencies. It does not cover original creditors and it does not cover credit bureaus like Experian. The federal government passed FDCPA to protect consumers from harassment and unfair practices by collection agencies. Among other protections, it states collection agencies cannot call at unreasonable hours, must stop contacting an individual if they inform them they do not wish to be contacted, and, perhaps most importantly, the law states collection agencies must provide proof the debt they seek to collect is accurate and they have the right to collect it. Click here for an explanation of the validation process.
Debt Validation Letter Samples
Date Your Name Your Address Collection Agency Collection Agency Address Re: Acct # XXXX-XXXX-XXXX-XXXX To Whom It May Concern, I am sending this letter to you in response to a notice I received from you on (date of letter). Be advised, this is not a refusal to pay, but a notice sent pursuant to the Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (b) that your claim is disputed and validation is requested. This is NOT a request for “verification” or proof of my mailing address, but a request for VALIDATION made pursuant to the above named Title and Section. I respectfully request that your office provide me with competent evidence that I have any legal obligation to pay you. Please provide me with the following:
- What the money you say I owe is for;
- Explain and show me how you calculated what you say I owe;
- Provide me with copies of any papers that show I agreed to pay what you say I owe;
- Provide a verification or copy of any judgment if applicable;
- Identify the original creditor;
- Prove the Statute of Limitations has not expired on this account;
- Show me that you are licensed to collect in my state; and
- Provide me with your license numbers and Registered Agent.
If your offices have reported invalidated information to any of the three major Credit Bureau’s (Equifax, Experian or TransUnion), said action might constitute fraud under both Federal and State Laws. Due to this fact, if any negative mark is found on any of my credit reports by your company or the company that you represent I will not hesitate in bringing legal action against you for the following:
- Violation of the Fair Credit Reporting Act
- Violation of the Fair Debt Collection Practices Act
- Defamation of Character
If your offices are able to provide the proper documentation as requested, I will require at least 30 days to investigate this information and during such time all collection activity must cease and desist. Also during this validation period, if any action is taken which could be considered detrimental to any of my credit reports, I will consult with my legal counsel. This includes any information to a credit reporting repository that could be inaccurate or invalidated or verifying an account as accurate when in fact there is no provided proof that it is. If your offices fail to respond to this validation request within 30 days from the date of your receipt, all references to this account must be deleted and completely removed from my credit file and a copy of such deletion request shall be sent to me immediately. I would also like to request, in writing, that no telephone contact be made by your offices to my home or to my place of employment. If your offices attempt telephone communication with me, including but not limited to computer generated calls or correspondence sent to any third parties, it will be considered harassment and I will have no choice but to file suit. All future communications with me MUST be done in writing and sent to the address noted in this letter. This is an attempt to correct your records, any information obtained shall be used for that purpose. Best Regards, Your Signature Your Name