- Debt collectors send debt validation letters to verify that a borrower is responsible for a debt.
- Debt collectors must send a debt validation letter within five days of first contacting you.
- Once you receive a debt validation letter, you have 30 days to dispute the debt.
If you receive a call from a debt collector demanding that you repay an amount they say you owe, don't withdraw a penny from your bank account without first receiving confirmation that the debt is yours.
You can authenticate your debt using a debt validation letter, which debt collectors must provide. Here's everything you need to know about debt validation letters.
What is a debt validation letter?
A debt validation letter is an official letter from a debt collector confirming the debt is yours.
Debt collectors are required by the Fair Debt Collection Practices Act (FDCPA) to mail a debt validation letter with information regarding the debt they want to collect from you. This letter must state how much you owe, who you owe it to, and how you can dispute the debt if it's not yours.
Debt collectors must send a debt validation letter within five days of first contacting you.
Why are debt validation letters important?
Errors and scams can often happen in debt collection, and debt validation letters allow you to verify the accuracy of debts, exercise your rights under consumer protection laws, and take steps to address and resolve outstanding debts fairly and informally. Most importantly, they help you avoid falling victim to debt collection scams or accidentally paying off a debt that doesn't belong to you.
Key components of a debt validation letter
According to the Consumer Financial Protection Bureau, debt validation letters typically include the following information to help you determine whether the debt is truly yours and how to dispute a debt that isn't yours:
- A statement saying that the letter is from a debt collector
- Your name and mailing information
- The debt collector's name and mailing information
- Your creditor's name
- How much you owe the creditor
- The account number associated with the debt
- An itemization of your total debt, including interest, fees, payments, and credits since a particular date
- Information you can use to dispute the debt if you believe it's not yours or if the amount owed is incorrect
- An end date for a 30-day period when you can dispute the debt
If your debt collector has failed to provide you with the above information in your debt validation letter or did not send you the letter within five days of first contacting you, you can submit a complaint with the CFPB. You can also report them to your state's attorney general.
What happens if the debt collector fails to validate the debt?
If the debt collector fails to validate the debt, all collection activity must stop, and any record of the debt on your credit report should be removed. This often occurs in the case of "zombie debt" (debt that is past the statute of limitations, debt that has been sold to the debt collector missing the original paperwork, or debt that came from fraud or identity theft).
If the debt collector cannot prove that you owe the debt and continues with debt collection activity, calls, letters, and credit reporting, you can file a complaint with the CFPB and also dispute the collection on your credit report with the credit bureaus.
What should you do after receiving a debt validation letter?
Once you receive your debt validation letter, read through it carefully to ensure there are no errors. It may be helpful to compare the information on your debt validation letter against a copy of your credit report. You can request weekly free credit reports from each of the three credit bureaus through AnnualCreditReport.com.
If everything looks correct and the debt is indeed yours, the next step is to pay it off.
If you fail to do so, your creditor could file a lawsuit against you, which could damage your credit and financial health for years to come. The court could file a judgment against you, allow your creditor to garnish your wages, and even seize your valuable assets like your car or house. So, if you're struggling to find money to pay off your debt, talk with your creditor to work out an affordable debt repayment plan.
On the other hand, if you realize the debt isn't yours or find errors in it, you must dispute it within 30 days. The CFPB provides formatted letter templates to help you write a letter to a creditor to dispute a debt. You may also need to contact the credit bureaus to dispute the error on your credit report so it doesn't hurt your credit score.
Debt validation letter vs. debt verification letter
Debt validation letters and debt verification letters may sound similar, but they're different.
A debt validation letter is a document you receive from a debt collector outlining detailed information about your debt. The debt collector is legally required to send this letter within five days of first contacting you.
On the other hand, a debt verification letter is a letter you send to a debt collector to dispute the debt or request more information about it. You only have 30 days from receiving a debt validation letter to send a debt verification letter.
If you're certain about the debt's validity and have no intention of disputing it, Thomas Brock, CFA, CPA advises against requesting a debt verification letter. "Doing so will prolong the collection process and lead to additional interest charges and fees," he warns.
What to include in a debt verification request
Depending on your situation, you could ask the debt collector to provide you with one or more of the following information in your debt verification request:
- Proof that the debt truly belongs to you
- The amount and age of the debt
- The debt collector's debt collection license
- A copy of the last billing statement sent by the original creditor
- Documentation that there's a valid basis for claiming you're required to pay the debt to the current creditor
For more information on what to include in your debt verification letter, check out the CFPB's list of sample letters. Once you've sent a debt verification request, your debt collector can't contact you again unless it's in response to your letter.
Since you are reaching out to a debt collection agency, it's important to keep copies of all communications. Make sure to send the letter by certified mail, return receipt requested. If possible, get the manager's name and address it directly to them.
Frequently asked questions about debt validation letters
After a debt is validated via a debt validation letter from a debt collector, you have 30 days to dispute the debt if you believe it's not yours. If you fail to request debt verification in writing during this timeframe, the debt collector can assume the debt is legitimate and continue to contact you.
You can get a debt verification letter template online. Debt verification letters don't have to be anything fancy, and you can craft one yourself using templates from the CFPB's website. Make sure to send the letter to the debt collector's mailing address, which they should have provided in the original debt validation letter.
If a debt collector can't verify your debt, they're not allowed to continue collecting it. They must also remove the collections from your credit report. If the negative item is still there after a few months, file a dispute with the credit bureaus to have it removed. And if the debt collection agency continues to harass you about the debt even though they can't prove that you owe it, report them to your state attorney's general or file a complaint with the CFPB.
There is no set time limit for debt collectors to respond to a debt verification request you send them. However, they are required to send a debt validation letter within five days of first contacting you.
