Check out this guest post written by Michelle Blackmore on the topic of Debt Validation
Are collectors contacting you several times for debt payments? If yes, then you are entitled by federal law to ask for a proof of how much you owe. This is what is known as debt validation. When the collection agency validates the debt, they give the assurance that the account is yours and not some other person who has the same name as yours. In case the collection agency is unable to prove that you owe the money, then they can’t force you to repay the debt.
How the collection agencies work
The debt collections business is almost $90+ billion, as of now. It has been stated by the Bureau of Labor Statistics that the debt collections business is anticipated to rise by 23% from now until the year 2016. The debt collection companies will function by buying delinquent debts from the real creditors. Thus, after a debt becomes delinquent by 180 days, the banks will be writing the bad loans off from their books and then sell the debts for pennies on the dollar.
The consumer’s validation rights
You’ll find many consumers do not know that they have validation rights when an agent calls them. Being a consumer, you must know your protections since this is going to be a long process in enabling you to manage collection agencies. The Fair Debt Collection Practices Act (FDCPA) summarizes the rules debt collectors must abide by and the protections available to consumers. The FDCPA also provides the consumer the right to request debt validation from the collection agency. In order to validate a debt, the collection agency will have to prove that they are authorized to collect the debt and also provide evidence that the debt belongs to you.
The validation of debt
According to the FDCPA, a debt collector shall end debt collection until the collector gets a copy of the judgment or verification of the debt or name and address of actual creditor, and a copy of the judgment or verification or name and address of actual creditor is mailed by the collector to the consumer. So, when any creditor sells a debt that is delinquent to the third party, you then you have the right to ask for more information that validates if you actually owe the debt.
The requirements for debt validation
With the help of debt validation method, you can get protection against mistaken identity by the debt collector. The evidence of debt validity is actually the debt collector’s responsibility. As such, the collection’s agency will have to provide evidence in written form that they have the right to collect the debt that they claim to be yours. This indicates that a collector will have to produce an agreement between the original creditor and the collection agency, which proves that they’re responsible for collecting your debt.
You may ask for your account statements from the original creditor or request a copy of the original agreement that was made between you and the creditor. You may request the entire history of your account to validate that the debt amount is correct.
A debt collector cannot get in touch with you until they prove that you owe the debt. In the event they fail to provide evidence that you owe the amount, then you may request the credit bureau to remove the collection account from your credit report until debt validation is provided.