Sunday, August 1, 2010

What Is Debt Validation?

Through debt validation, collection agencies have to prove that a debt belongs to you. Either that, or, they can ignore your request while you run around in circles, frothing at the mouth and absolutely demanding that they follow the  FDCPA. 

Yes, you heard right. It's a law. You see, there are quite a few unlucky individuals out there getting their identities stolen. After which, rest assured, the thief wastes no time in either selling the information or racking up large amounts of debt for the unwary consumer to deal with later. Just as often, collection agencies purchase debts from creditors and, for whatever reason, don't get the right information. This results in the debt appearing on the wrong person's credit report.

Of course, try being the person calling the collection agency and saying "This isn't mine." If you listened very carefully, you might even hear a little bit of the representative's laugh before s/he yanks the phone away from his/her mouth. 

Not you? Yeah right.

Granted, your options differ depending on the situation, but a debt validation request allows you to request that the collection agency provide you with some sort of evidence proving that you owe the debt. Oh but haven't heard the best part yet...

The law fails to stipulate just what that evidence is. 

That makes debt validation a very messy business at times. Here are the rules:

1. You must make your request in writing

2. You should make it within 30 days after receiving your first communication from the collection agency (wise but not required)

3. The collection agency must stop all active collection activity until it can provide you with proof. Keep in mind, there is no federal standard for "proof." Also, the FTC has determined that credit reporting is not protected under this statute. Therefore, the collection agency can place the debt on your credit report and update it even while trying like hell to prove that you owe it. Gee, ain't that grand? 

I'll go more in-depth about debt validation later. I just wanted to throw the basics out there.


  1. So wait, they can put it on your credit report before they validate the debt?

  2. Interesting, I sent a DVL to a CA via certified mail who was collecting on my Target card as soon as I received their initial letter. Before the 30 day request for them to verify, they filed it thru the courts and I was served! Ended up settling with them to avoid being taken to court.