Past due and final notices are intimidating enough, with their red stamps and strong language. But, when the bill collectors start calling you, it is easy to feel overwhelmed and desperate to make the collection efforts stop. Consumer debt is a significant pain point for many Americans. In fact, despite a decrease in spending habits during the pandemic, Americans still ended 2020 with over $4 trillion in debt. So, what happens when consumers are unable to repay all that money?
The Fair Debt Collection Practices Act (FDCPA) is a federal law established to protect consumers. The FDCPA regulates how third-party debt collectors interact with consumers and collect on outstanding debts. Because of the way third-party debt collectors obtain accounts from the original creditors, these collectors often do not have sufficient information to establish their legal right to collect the debt or even establish the debt is your responsibility.
Delinquent accounts are typically purchased by the hundreds in a single transaction. For pennies on the dollar, the debt collector receives a spreadsheet with only the most basic information – sometimes, nothing more than a name, phone number, and amount due. However, to collect on a debt, federal law requires a debt collector to have certain information about both the debt and the person allegedly responsible for paying it.
So, how do you know if the bill collector can satisfy the requirements of the FDCPA to collect the debt they are asking you to pay? The key is a debt validation letter.
What is a debt validation letter?
Under the FDCPA, debt collectors are required to provide you with certain information about the debt they are trying to collect. Specifically, the debt collector must send a written debt validation letter to the consumer within five days of the first attempt to collect the debt. The debt validation letter must specify the following:
- Amount owed
- Name of the creditor
- Statement of validity – debt will be assumed valid unless disputed in writing
- Statement of dispute – the consumer must dispute debt or request verification of the debt, in writing, within thirty days
- Statement of assurance – collector must provide the consumer with any information about the debt, including origination information when requested timely
Though the law requires debt collectors to provide validation of the debt within five days of the first contact with the consumer, failure to receive the letter within five days is not cause to void the debt. Instead, the consumer must ask the collector to provide a debt validation letter when the collector next makes contact or the consumer may send a written request to the collector if the debt has not been validated within ten days of the first collection attempt.
Do I need a debt validation letter?
Yes. A debt validation letter establishes both the debt collector’s right to collect the debt and is proof that you are the person responsible for paying the debt. To ensure your rights are adequately protected, you must send a written request for a debt validation letter to the collector within thirty days of the collector’s first attempt to collect the debt. Therefore, if you have not received a debt validation letter before receiving a collection call, it is important to ask for the debt collector’s mailing address. Once you request debt validation, debt collectors must stop all collection efforts until you are provided with adequate validation of the debt.
While debt collectors should send a debt validation letter with any attempt to collect on the debt, many will not and will not expect you to know your rights. Take care to send your written request for a debt validation letter via certified mail so you will have proof of when you made your request, when it was received by the collector, and therefore when collection efforts should cease until proper validation is provided.
What if the debt collector will not honor my validation request?
Debt collectors are required under federal law to provide proper, timely validation of debt before collecting on it. Failure to provide a consumer with a debt validation letter, especially when asked for it by the consumer, is a violation of the FDCPA and each subsequent collection effort is a new violation of the law. However, delinquent accounts are frequently sold and resold, and each new debt collector is responsible for providing a debt validation letter to the consumer. This also means that your request to one collector for validation of the debt does not apply to the next collector after your account is sold. You must receive and/or request a new validation letter each time your account is transferred to a new collection agency.
Learn more about Collection Agency Lawsuits
If collection efforts continue and you are not provided with validation of the debt, you can file a complaint with the Consumer Financial Protection Bureau, your state’s attorney general, and you may even have the standing to file a complaint with the Federal Trade Commission if the debt collector has been deceptive in attempting to collect from you. A skilled consumer litigation attorney can help you determine the best course of action to protect your rights, your credit, and your reputation.
For more information about debt validation letters and your rights, check out the Debt Collection FAQs on the FTC’s website.
