Debt Collectors Calling? How to Send a Debt Validation Letter

debt validation letter

You get a call from a debt collection agency. Your first, panicked thought is, “I don’t owe anything!” And then massive anxiety kicks in. “How do I know if this call is real and not a scam? 

There is a way to find out for sure: send the collection agency a debt validation letter.

Here’s how sending a debt validation letter can help you deal with collectors and receive proof of your debt.

Why do you need to send a debt validation letter?

After a debt collector contacts you for the first time, they must send you a validation notice with the amount you owe within five days of the initial contact.

Under the Fair Debt Collection Practices Act (FDCPA), borrowers have the right to request proof of their debt from collectors. If you receive a validation notice from a debt collection agency and have doubts, you can send them a debt validation letter.

If the collection agency can’t provide proof of the debt, they can’t collect on the debt.

It’s important to note that you need to send the letter within 30 days of receiving the validation notice from the collector.

Once you’ve sent the letter to the collection agency, the collecter must then adhere to the guidelines set by the Federal Trade Commission (FTC) and stop contacting you. The collection agency can only resume contact if they can send you written verification of your debt.

When you shouldn’t send a letter

If you receive a validation notice from a collection agency and you know that you owe the debt, don’t send a letter to try and get out of it. It will just single you out among the many other people the agency is trying to collect from.

However, if you know you owe the debt but you’re not sure the collection agency is the one that owns it, you can check your free annual credit report at AnnualCreditReport.com for verification.

How to write a debt validation letter

The next step is how to write a validation of debt letter – and time is of the essence.

You should send your letter via certified mail within the first 30 days of contact with the debt collector.

Here are the details you want to ask for, as taken from this sample debt validation letter from the Consumer Finance Protection Bureau (CFPB):

  • Why you owe, including the name and address of the creditor to which it’s owed, the account number, the amount, and the name of the original creditor (if different from the one contacting you).
  • How old the debt is, any additional fees or interest charges that may have developed, any changes from the last statement by the original creditor, the last payment date, etc.
  • Proof of the collector’s license in your state or their state of operation.

Even though you’re required to send your debt validation letter within the first 30 days of being contacted by a creditor, there’s no time limit within which they have to respond. They simply can’t contact you to try and collect that debt from you until they respond to your letter. It’s up to you to maintain contact and make sure you get proof of your debt.

It’s important to be proactive; if you do owe that debt, it will still show up as past due on your credit report and damage your score. It’s in your best interest to get the validation letter and set up a payment plan as quickly as possible.

When to dispute a debt

If you know for a fact the information given to you by the collection agency in their validation notice is incorrect, you can dispute the debt. There are a few reasons you might want to dispute the debt, including:

If you’re in a position to dispute your debt, then you’ll need to send a letter in a similar manner to a debt validation letter. The CFPB offers a few more samples to help, including one explicitly stating you don’t owe the debt.

Finally, whether you’re sending a debt validation letter or a letter disputing the debt, make sure you date them and keep copies for yourself. That will protect your rights under the FDCPA by showing you followed the correct protocol.

One of many best practices when dealing with debt collectors

There are a few best practices for dealing with debt collectors, and sending a debt validation letter is one of them. One thing is for sure: when you get a call from debt collectors, do your homework before you take action.

Look into whether or not the debt collector is a real company, whether the debt is something you owe, and whether or not this is the company that currently owns the debt.

It’s hard enough to repay debt. Make it a little easier on yourself by taking the time to ensure you’re not sending your money somewhere it doesn’t belong.

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1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Terms and Conditions Apply: SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Finance Lender Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)
  2. Personal Loans: Fixed rates from 5.49% APR to 14.24% APR (with AutoPay). Variable rates from 5.29% APR to 11.44% APR (with AutoPay). SoFi rate ranges are current as of December 1, 2017 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 5.29% APR assumes current 1-month LIBOR rate of 1.34% plus 4.20% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate Disclosure: Variable rate, based on the one-month London Interbank Offered Rate (“LIBOR”) published in The Wall Street Journal on the twenty-fifth day, or the next business day, of the preceding calendar month. As of August 1, 2017, the one-month LIBOR rate is 1.23%. Variable interest rates range from 6.02% – 15.97% (6.02% – 15.97% APR) and will fluctuate over the term of your loan with changes in the LIBOR rate, and will vary based on applicable terms and presence of a co-applicant. Fixed interest rates range from 5.99% – 16.24% (5.99% – 16.24% APR) based on applicable terms and presence of a co-applicant. Lowest rates shown are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
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