Using a Debt Validation Letter

If a debt collector contacts you to collect delinquent debt, they are required by the Fair Debt Collection Practices Act (FDCPA) to provide you with a debt validation letter. This letter includes details about the debt being collected, including the amount owed, the name of the creditor seeking payment, and other basic information. If you do not receive this letter or if it leaves you with more questions, you have a legal right to request a debt verification letter that proves the debt is yours. Requesting this letter can pause collection efforts while the collector tries to gather sufficient information, but there are also some situations in which it may not be the best course of action.

Reasons to request verification

One legitimate reason to request a debt verification letter is the possibility of identity theft. If a debt collector contacts you about a debt you know nothing about, it could be due to fraud.

Another reason to request written debt verification could be to avoid paying a debt. If a debt collector is unable to gather enough information to verify your debt, you won’t be legally responsible for paying it. Requesting a verification letter can also pause collection efforts or deter them altogether in some cases. 

If you know you have delinquent debt but aren’t sure who is trying to collect it from you, this could be another reason to request a debt verification letter. Issuing creditors sometimes sell delinquent accounts to debt buyers, whose primary business is purchasing debt. In this situation, the issuing creditor loaned money to a consumer who failed to make payments until the debt became delinquent. Once the issuing creditor determines that a debt is unlikely to be collected, they may choose to sell it to a debt buyer for a fraction of the debt amount. The debt buyer now stands to make a profit on the debt if they can recoup anything from the consumer. By requesting verification, you can tell who owns your account and find out whether they are a legitimate debt collector. Remember that you can also call your issuing creditor to ask if they sold your account; This is a simple way to get verification without submitting a request in writing.

Disadvantages to requesting verification

A debt verification letter isn’t always necessary, particularly if your goal is simply to settle your debt. If the debt is legitimate and there is no concern about identity theft, then requesting written debt verification could work against you by triggering some unwanted side effects.

For example, imagine your bank hired a collection agency to collect your delinquent debt. If you request a debt verification letter, the collection agency may pass your account back to the issuing creditor to handle the request. The issuing creditor’s legal team will likely then review your account and contact you about the debt. Suddenly, you're dealing with unwanted legal attention when your intent was only to settle your debt. Similarly, if your debt is sold to a debt buyer and you request a debt verification letter, the debt buyer is then required to prove the debt is yours to continue collecting from you. That documentation is also the proof the debt buyer needs to sue you, so your request could unintentionally provide them with what they need to take you to court.

If a debt you’re contacted about is nearing its statute of limitations, requesting verification could also draw unwanted attention to it. The statute of limitations refers to the amount of time in which a debt can be pursued. The statute of limitations varies by state and by debt type, but once the limit is reached, you have no legal obligation to repay the debt anymore. In this case, a better option could be to ignore the collection notices until the statute of limitations is reached.

Writing a debt verification letter

If you decide to write a debt verification letter, be sure to ask for details about why the debt collector believes you owe the debt, the amount and age of the debt, and whether the collector is licensed in your state. Free templates are available online from the Consumer Financial Protection Bureau (CFPB) if you need help getting started.

Remember that while there are valid circumstances to send a debt verification letter, it could also be counterproductive to the goal of resolving your debt and making a deal. Consider whether writing a debt verification letter is a strategic move for your situation before sending one.

If you need assistance communicating with a debt collector, Kredit can help.