The Debt Validation Strategy

The Debt Validation Strategy
It might be helpful to look at our illustration of the process before you get started. You might also want to read this, sort of our own “validation” of the process given here.
1. Send a letter requesting validation to the collection agency (our buddy Bob in the preceding example).
2. If you don’t know the address of the collection agency, here is a tip to help you find it.
3. Dispute the collection with the credit bureaus.
4. Wait 30 days to hear back from the collection agency. Most likely they will not respond or they will respond saying that they received your letter. Only a letter which includes:
o Proof that the collection company owns the debt/or has been assigned the debt,
o Complete payment history, starting with the original creditor, and
o Copy of the original signed loan agreement or credit card application
is satisfactory.
5. If they haven’t sent you satisfactory proof, send a copy of your receipt for your registered mail, a copy of the first letter you sent and a statement that they have not complied with the FDCPA and are now in violation of the Act. Tell them they need to immediately remove the collection listing from your credit report or you are going to file a lawsuit because they are in violation of the FDCPA, section 809 (b).
6. Wait 15-20 days to hear back after this second letter to the collection agency. They will either remove it or not respond.
7. If they do provide a contract with a signature from the original creditor showing that you owe the debt, there is one more thing you can try: see if they are legally licensed to collect the debt in your state. Here is a good site to begin your search.
Not all states require licensing, however. Here’s a little cheat sheet (Word Doc) to see what the collection licensing laws in your state are. It’s got other handy dandy state law information as well.
If you believe that they are not licensed, and licensing is required in your state,Martin Pelmore say’s write them another letter and tell them they are in violation of your state’s collection laws and are subject to prosecution and fines. Cite your state’s fines and procedures in the letter. This is a last ditch effort, but has worked in some cases.
8. Typically, your work will stop here, as most collection agencies will bow down to your demands and send you a letter agreeing to remove the listing. Now all you have to do is send a copy of the letter to the CRAs.

If the collection agency did not agree to remove the listing, then you need to continue to the next steps.
9. File a lawsuit in small claims court against the collection agency on the basis of violating the FDCPA.
10. Have the papers served to the collection agency. (You can find a paper server on the internet for about $25). Here is a good link. And here is another:
11. In the meantime, in a parallel effort with your lawsuit against the collection agency:
12. If the collection comes back as “verified” from the credit bureaus, you now have proof of further collection activity from the collection agency. (The assumption is that the credit bureau contacted the collection agency to verify the debt.) Since the collection agency did not validate the debt, further collection activity is a violation of the FDCPA.
13. Contact the credit bureaus, and tell them that the creditors did not verify the debts under the FDCPA, and send copies of your proof. Request the method of verification, which is your right under the FCRA. It is crucial to contact the credit bureaus before filing a lawsuit. Make sure you state that the collection agency did not respond to your request for debt validation.
14. You can try sending them this letter to see if they will budge. They may tell you that the request needs to come from the creditor. This is baloney. If they can’t give you reasonable information on how they verified the information and the collection agency has provided you none, you can conclude there was no reasonable investigation performed. They are teetering on the edge of “willful non-compliance” under the FCRA. Tell them so.

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