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Make Debt Collectors Prove You Owe

December 22, 2008 by Shawn · Leave a Comment 

Have you been contacted by a debt collector and they claimed you owed a debt that you weren’t sure was yours?  Or, perhaps you weren’t sure that the amount you owed on the past due bill was correct? Under the FDCPA, or Fair Debt Collection Practices Act, you have the legal right to request that a debt collector sends you proof that you owe the debt claimed.

This process is called debt validation.

Debt Validation Timeframe

Within five days of first contacting you by phone or mail, the debt collection agency has the responsbility to send you a debt validation notice.  This is basically a summary of what the original creditor (OC) is, meaning the person you originally owed the debt to, how much the debt is, and how you can pay it.  It should also give you instructions on how to request debt validation.

You have thirty days from the date of contact to dispute a debt.  If you fail to do so in this time period, the debt collection agency can assume the debt is valid and continue to try and collect the debt from you.

Submitting a Debt Validation Request

This is the debt validation letter that has been previously posted.  You must send a similar letter to the address provided to the collection agency that is trying to collect a debt from you.  It is your personal choice to dispute part of the debt (if the amount is incorrect) or the entire debt entirely.

Once you send this dispute letter off, the debt collection agency cannot contact you again until it has responded to your debt validation letter.  Keep in mind, you always want to send any correspondance to a debt collection agency in writing and as a certified letter.  This means someone has to sign for the letter and you can keep a record of all correspondance — helpful if they start to deny they never received your letter.

The Debt Collection Agency’s Response

You sent your debt validation letter off to put the burden of proof onto the debt collection agency.  Now what?  Well, the collection agency should send you back proof that you owe $XX amount to X creditor.  They must send you a copy of the bill from the original creditor saying you owe that amount.  If they prove that you owe the debt, it’s your responsibility to make payment arranagements.

If the debt collection agency doesn’t verify the debt within 30 days or they can’t verify that you actually owe the debt they claim, they cannot continue collecting on the debt, nor can they list it on your credit reports.


Debt Validation Letter

October 3, 2008 by Shawn · Leave a Comment 

Have you received a letter in the mail from a debt collection agency, claiming you owe them money?  If you look at the bottom of this letter, you’ll see verbiage telling you that you have the right to request validation of the debt — aka, proof you actually owe the debt.

This is a letter that can be sent to request validation from a debt collector.

YOUR NAME
YOUR ADDRESS LINE 1
YOUR ADDRESS LINE 2

Month Day, Year

THEIR NAME (OR DEPARTMENT)
ADDRESS LINE 1
ADDRESS LINE 2

Re: Account #XXXXXX

To Whom It May Concern,

I have received correspondence from your company notifying me that I allegedly owe money to COMPANY NAME. This is not a refusal to pay, but a notice that your claim is disputed.

This is a request for validation made pursuant to the Fair Debt Collection Practices act. By “validation,” I refer to reliable competent evidence that I have some contractual obligation to pay you the amount of money referenced in your previous correspondence.

I look forward to your reply,

Sincerely,
FIRST AND LAST NAME


Know your rights with debt collectors

September 29, 2008 by Shawn · 1 Comment 

You have many legal rights when being pursued by a debt collection agency. These rights come from the Fair Debt Collection Practices Act, or FDCPA, passed in 1977 to protect consumers from abusive debt collection policies.  Some of your rights include:

Contact methods
A debt collection agency can contact you by telephone (most common), mail, fax, or in person. They may only contact you between the hours of 8 AM and 9 PM, unless you give them permission to do so otherwise. If you inform the debt collector that you are not allowed to receive phone calls at your employer, they must also cease from contacting you there.

Providing you with a written notice
After you are contacted for the first time by a debt collector, they have to provide you with a written notice notifying you of the amount of money you owe, the creditor whom you owe the money to, and how you to proceed if you do not believe you owe the money.

Contacting other people
A debt collector can only contact people to find out where you live, where you work, and how they can reach you on the phone. Usually, they cannot tell them you owe a debt.

Not allowed to harass or intimidate
This leaves a lot to be interpreted, but debt collectors are not allowed to harass, abuse, or oppress you or any third party they contact about your debt. It is clear, however, that contacting you several times a day is not considered to be harassment.

Debt collectors are not able to say the following:

  • If you do not pay your debt, you will be arrested. These are civil matters, not criminal – hence you cannot be arrested.
  • They are an attorney (unless they are) or are a part of the government
  • You have committed a crime.
  • They will garnish your wages or seize your property unless they are not only actively prepared to do so, but that it is legal in your state to do so as well.

Debt collectors are not able to do the following:

  • Provide credit bureaus with false information
  • Send official looking documents as if from a court or government agency.
  • Deposit a postdated check early
  • Unless authorized to do so, collect an amount greater than your debt

For a fully copy of the Fair Debt Collection Practices Act, click here.


5 biggest mistakes in dealing with collectors

September 27, 2008 by Shawn · Leave a Comment 

Nobody likes dealing with debt collectors, regardless if you actually owe the debt or not.  They can harass you day and night, leave messages with friends or family looking for you, and can be very intimidating.  It’s important though to keep your calm — that’s where we start our list:

1.  Lose your cool and screaming, yelling, or lying.
Lying is a big no-no.  “The check is in the mail” should even be avoided, unless, of course, the check really is in the mail.  If you choose to communicate with the debt collector over the phone, realize that your conversation is being recorded.  Any anger, lies, or “lack of character” can be used against you later.

2.  Communicate via letters, if possible.
It’s tempting to pick the phone up when you’re called repeatedly throughout the day and start making payment arrangements/settlements with a collector.  However, unless you’re able to (legally/technically) record the conversation with the debt collector, it’s simply a verbal agreement.  It’s your word against their recording, which more than likely will vanish very quickly.

So, get it in writing.  It’s next to impossible for a verbal agreement to outweigh a written one.  Make sure any letter outlying a payment agreement confirms that your payment is for X debt, and payment of X will pay the debt in full and stop any further collection activities.  You’ll also want to make sure that the agreement notes that your credit report will be updated accordingly.

Another major benefit in communicating by letters is that it allows you to keep your cool.  Think about a previous experience when you went to a car dealership and negotiated with the sales manager to get a deal you wanted.  Now, consider how easy it would’ve been doing it by letter.  Sure, it would’ve been a slightly slower process, but all commitments would’ve been in writing, you would’ve never had the ability to lose your composure, and you’d make sure you got the deal you wanted.

You’d have the same benefit with a debt collector.

3.  Give a debt collector your bank account information.
Never pay a debt collection agency with any payment method that can incur “recurring charges.”  This means your bank account, credit card, etc.  Of course, it’d be illegal to charge any of your cards/accounts without your permission, but funny thing — it seems to occur quite often.

Pay with a money order or cashier’s check.  Nothing else.

4.  Become intimidated.
They may try to appear like an established law firm with thick mahogany desks, manned by guys named Theodore Osmond III.  In reality, you’re dealing with a guy named Tucker who works in a cubicle and drives a Kia.  The point is — debt collectors are people just like you.  They have families, mortgages, watch the New England Patriots choke on Sunday, etc.

Keep this in mind when talking to them and don’t be afraid.

5.  Make commitments you can’t keep.
You got into debt presumably by underestimating the money you had going out, and overestimating the money you had coming in.  Don’t do it again when arranging to pay off a debt.  While you will be eager to pay off the debt quickly and to make the collection agency happy, accepting a payoff plan that you can’t stick to won’t help anything.  It’ll only set you back further.


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