Debt Validation Letter: How To Use It Correctly

A debt validation letter can be an effective tool for dealing with debt collectors.

But there’s a lot of misinformation online about how to use a debt validation letter correctly.

Today we’re going to demystify the debt validation letter by explaining:

• What is a debt validation letter exactly?
• When to use a debt validation letter … and when you shouldn’t.
• How to write a debt validation letter.
• Debt Validation Letter FAQs

What Is A Debt Validation Letter Exactly?

If a debt collector contacts you about an alleged past due balance, you have the right to dispute their claim and request proof you actually owe the money.

The Fair Debt Collection Practices Act (FDCPA) states a debt collector must provide you with proof of debt if you request it. A debt validation letter is the tool you use to do this.

Sometimes you’ll see the terms “debt validation letter” and “debt verification letter” used synonymously, and here’s where it gets a little confusing. Technically, they are 2 different things:

• A debt validation letter in the truest sense comes from the debt collector. This is the written notice from the debt collector containing all the particulars of the alleged debt such as the amount, who the creditor is, etc.
• A debt verification letter is the letter you send to the debt collector if you are disputing the validity of their claim and you want them to provide you with proof that their claim is valid.

In a perfect world, the term “debt verification letter” (rather than a debt validation letter) would be used to describe the written correspondence to a debt collector requesting proof a debt is legit. However, after working nearly 15 years in the credit card industry, I can tell you that the term “debt validation letter” is used by nearly everyone — even though, technically, it’s a misnomer.

When To Use A Debt Validation Letter … And When You Shouldn’t

The 3 most common scenarios for sending a debt validation letter to a creditor or collection agency are:

• Mistaken identify. If your name is Sam Jones but you’re not the Sam Jones that owes the money, send the debt collector a debt validation letter requesting they prove they’re contacting the correct Sam Jones. Mistakes can and do happen. Failure to demonstrate you’re the actual person owing the money will cause them to stop contacting you and instead go after the Sam Jones that actually owes the money.
• The debt is really old. If you’re contacted by a debt collector about an old debt, even if you think you might owe some or all of the amount they’re claiming, it’s your right to request documentation from the debt collector to prove you actually owe the money. If they can’t provide proper documentation to validate their claim, they must cease their collection efforts against you and close their file.
• The debt has been purchased. Debts get bought and sold all the time. And quite often, the record keeping is pretty shabby. So if a debt collector contacts you about a past due debt and it appears they purchased the debt from one of your former creditors, send a debt validation letter to the debt collector asking them to prove that you owe the money and they are the rightful owner of your account. If they can’t produce the proper paperwork, they must drop their claim against you.

Just because a debt collector claims you owe money it doesn’t mean it’s true. If there’s any doubt, make them show you the appropriate paperwork to validate their alleged claim. It’s your right, pursuant to section 809 of the FDCPA.

The debt validation strategy is not recommended in every instance. It can backfire and work against you if you don’t use it wisely. Here are some scenarios when sending a debt validation letter is not recommended:

• You actually want to resolve the matter. If you know you owe the money and your goal is to ultimately resolve your outstanding balance with a one-time discounted lump sum settlement or even a payment plan, don’t send a debt validation letter forcing the debt collector to go dig up the paperwork associated with your account. Yes, it’s possible you’ll trip them up on a paperwork technicality and they won’t be able to produce the documentation to validate your debt. It’s also possible that they will produce the requested documentation, and then they might not be in the mood to cooperate with you since you forced them to jump through hoops. Your debt validation request could also trigger your account to a collection law firm for litigation against you.
• If the debt is near the end of the statute of limitations. Each state has a statute of limitations for how long you can be liable for a debt. If you believe the debt in question is approaching the statute of limitations and you would prefer to just let the statute expire rather than trying to resolve it, sending a debt validation letter could alert the debt collector about the approaching deadline — possibly invoking more aggressive collection action against you. Also, if your debt validation letter inadvertently acknowledges the validity of the debt, that can extend or revive the statute of limitations in some states.
• When your account is still with the original creditor. Requesting the original creditor such as a credit card company to produce documentation to validate a debt (in hopes they “lost your paperwork”) when you know you owe the money is a waste of your time and theirs because 99.9% of the time they’ll be able to produce documentation to validate your debt. Sure, the original creditor may comply with your debt validation request, but you’ve now put a target on your back as someone playing shenanigans — and your delinquent account could be flagged for litigation, rather than remaining with their (non-litigation) collection department or collection agency.

Use the debt validation strategy judiciously. It can be effective but it’s not a magic one-size-fits-all solution for every situation.

How To Write A Debt Validation Letter

Composing a debt validation letter needn’t be complicated. Simpler is better.

Here’s a debt validation letter template letter you can use:

You’ll notice this letter is much shorter and succinct than other sample debt validation letters you might find on the internet. That’s by design. Less is more.

A long letter with tons of bullet points can actually telegraph you believe you owe some or all of the money, kind of like a guilty person on the witness stand that doesn’t know when to shut up. Our minimalistic letter above communicates very simply, “I don’t know what this is. Prove your claim, otherwise close your file and go away.”

It is important to send your debt validation letter via certified mail because:

• You’ll have proof of delivery with a time stamp and the debt collector can never claim “gosh, we never received your debt validation request”.
• You’ll get their attention because only “serious” documents are sent via certified mail.

Do not send your debt validation letter via email, fax or regular first class postal mail because there is no proof of delivery with these delivery methods.

Debt Validation Letter FAQs

What kind of documentation constitutes legitimate debt validation from a debt collector?

Look for a contract or promissory with your valid signature whereby you’re acknowledging responsibility for the debt. Also, look for statements that clearly support how the debt collector is calculating the amount of their claim. The documentation has to be legit. Don’t let them try to baffle you with BS by printing gibberish on a page, then claim it “validates” your debt when it does no such thing.

How much time does a creditor have to validate a debt?

There really is no specific time period in which a debt collector has to respond to your debt validation request. All the FDCPA basically says is that no further collection activity is supposed to ensue until or unless the debt collector validates their claim against you.

What if they fail to validate a debt?

According to the FDCPA, if you request documentation from a debt collector to validate their claim against you, they are supposed to stop all collection activity until they provide you with that documentation.

What if they successfully validate a debt? Now what?

Check the statute of limitations in your state. Each state has laws dictating how many years you can be liable for outstanding balances. Here’s a great statute of limitations resource.

If it turns out the debt is legitimate and it’s still within the statute of limitations, it would probably be best to try and resolve the debt voluntarily via a lump sum discounted settlement amount or a payment plan. If you would like assistance with this, you are welcomed to contact us for assistance.

Should you dispute a debt with original creditor? How about a collection agency? How about a debt buyer? 

You should dispute a debt any time you feel the claim against you is inaccurate. It is not recommended that the debt validation process be used when you know the debt is legitimate and your goal is to resolve the matter voluntarily and amicably. Keep in mind that as delinquent accounts age, they might get bought and sold numerous times and the record keeping could get sloppy. In that case, requesting to see proof of the debt might be a good strategy (even when you feel you might owe the money) because there’s a decent chance the documentation to validate the claim against you is lost or they won’t take the time to dig it out of their archives.

What happens if a debt collector ignores your debt validation letter?

Nothing really. If you haven’t heard back from the debt collector after sending them your debt validation letter, it’s possible they simply closed their file because they don’t have the documentation to validate their claim. So, mission accomplished.

Conclusion

The debt validation strategy can be a useful tool for pushing back against debt collectors. But it needs to be used in the proper circumstance as described above for best results.

Debt collectors know that most people are completely in the dark regarding their rights surrounding the topic of debt collection. But they reality is you do have rights.

If you are are disputing the validity of a debt — either in part or in full — it is your right to see documentation from the debt collector proving the validity of their claim.

If they can’t produce the goods to demonstrate you owe the money, they’ll have no choice but to stop their collection efforts against you and close their file.

And now you know how to correctly use a debt validation letter.