Five Facts About Debt Validation

There’s a lot of misinformation floating around about debt collections and the debt validation process. Here’s what’s fact—and what’s not—under the Fair Debt Collection Practices Act (FDCPA).

Requesting Validation

A man looking at a paper statement

Consumers with accounts in collections have the right to ask collection agencies to prove that a debt is theirs. Occasionally, debts that have already been paid make their way into collections. There are also other times where scammers send authentic-looking debt collection notices that are actually fake. Debt collection agencies have five days after contacting a consumer about a debt to send a validation notice. Consumers have 30 days to dispute the debt’s validity in writing. Failing to dispute a debt allows collection agencies to assume a debt is valid.

Referencing the FDCPA

It’s commonly believed that consumers must reference their rights explicitly in the FDCPA in their validation request to adhere to the law. This isn’t necessary, for the FDCPA requires collectors to strictly adhere to its requirements regardless of whether the Act is mentioned.

Sending Validation

While consumers have 30 days to dispute a debt’s validity, the FDCPA does not require collectors to respond with proof within any specific period of time. The agency simply can’t continue with collections until validation is sent. However, some agencies let months or years go by before responding and once again attempting to collect the debt.

Providing Original Debt Information

When responding to validation requests, debt collection agencies must provide proof of the original debt. Different courts have translated this requirement differently, but most state that a statement or bill displaying the creditor’s name and amount of the original debt is all that’s required.

Lawsuits Over Unpaid Debts

Just because a debt has been validated—or assumed to be valid—doesn’t mean a consumer will pay it. But failing to pay a valid debt does more than just damage a person’s credit report. Debt collectors can take consumers to court for nonpayment. However, there is a statute of limitations that restricts how long collection agencies can use the court system to collect. Debt that falls outside that statute of limitations can no longer be collected through the court.

Start Collecting Your Unpaid Accounts

Altus Global Trade Solutions has had great success collecting on unpaid accounts for physicians, banks, lenders, and businesses across all industries while adhering to the FDCPA. Our collection recovery solutions use unique strategies and a smart recovery process to receive payment for unpaid accounts. We can help your company cut losses, speed up the recovery process, and improve your cash flow strategy. Call Altus at 504-471-0948 to start the conversation!