Credit Check Collection Agency - What Is Debt Validation?

When you receive a call from a credit check collection agency, you have the right to send a written request for debt validation before speaking with them further. A debt validation is a way to ask the collections agency to prove they have a right to request money from you. After all, they are not the initial lender, and they may not even be associated with that lender. Prior to paying any money to a collections agency, consider a debt validation request.

When Debt Is Not Valid

The major reason to request a debt validation request is when you have reason to believe the debt itself is not valid. This can occur for any number of reasons, including:

  1. Past the statute of limitations: The statute of limitations varies incredibly from state to state. For example, Texas is four years while Ohio is fifteen years.
  2. You are not aware of this debt: If a collections agency approaches you regarding debt you have no knowledge of, it is essential you request validation to protect yourself from fraud.
  3. The amount is too high: You should verify any amount that appears too high. This may indicate undue interest charges or a commission structure for the collections agency; they may not have the right to seek this increase. 
  4. There is disputed debt: If you are in the process of a moral or legal debt dispute, your lenders may not have the right to send that debt to collections.
  5. More than one collection company has contacted you: If you receive notices from two or more collection agencies, seek debt validation from each. This will both protect you from fraud and ensure your lender is not engaging in unethical practices.

When Debt is Valid, but the Collection Agency Is Not

Even if the debt is valid, the collection agency may not have a right to seek the funds. Contact your lender to ensure they have sent the request to collections. Ask to review the company policy on when and how debts are sent to a collection agency. You should have been shown a copy of this policy prior to signing a formal debt agreement, such as a credit card contract or bill. If there is no disclosure of this policy, your lender may not have the right to use a collection agency. Requesting debt validation will help you determine this.

How to File a Debt Validation Request

You will submit a letter to the collection agency. In your letter, request a copy of the agreement between the original lender and the collection agency. Request a copy of your original agreement with the lender as well, which the collection agency should have if the debt is valid. Finally, request a record of principle, interest, fees and payments made to the account. This record should also be with the collection agency if valid. Enclose a copy of the original document you received from the agency, and be forceful in tone. Keep written records of all communications, as the collection agency is not permitted to contact you until they have responded to your debt validation request.

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