I get a LOT of messages asking how to write debt validation letters. Validation letters are sent to collection agencies to dispute and request proof of both the debt and the collection agency’s legal right to collect on the debt. This is your right under the Fair Debt Collection Practices (FDCPA).
When the collection agency receives a validation letter, they must stop all collection activity – which includes reporting information to your credit reports, calling you, writing you, and contacting people (including your employer) to locate you – until they are able to:
- Identify the Original Creditor
- Inform you of what the money they say is owed, is for
- Detail how they calculated that amount
- Provide documentation that details how the debt came to be about, which can include billing statements, an accounting ledger, fully executed (signed) contracted, etc.
- Proof that the debt is within your Statute of Limitations
- If required by your state, proof that they are licensed and registered to perform collection activity in your state (and any other requirements set by your state)
Sending a dispute letter for validation is a great way to get rid of collection agencies. This is because of how debts are purchased in our country.
When collection agencies purchase debts they want to purchase them for as little money as possible in order to boost their profits. Similarly, the original creditors selling the debts want to net as much money as possible so that they can reduce their losses on their unpaid debts.
The solution? The collection agencies will purchase the debts with as little information as possible to save money. If they were to purchase debts with all of the supporting information – contracts, billing statements, etc. – it would cost more money.
Use this against them! Before you fork over a dime, you want to know if you are responsible for paying the account, if the collection agency rightfully owns the debt that they claim you owe, if that amount accurate, and if the debt is within your state’s statute of limitations.
Ready to get started?!
I know there are several templates online, however, I’ve found that the most effective validation letters are the ones you personalize yourself.
Naturally, you’ll start as you would with any other letter: names, addresses, salutations, etc.
Make sure you include the reference number so that they can attach your dispute to the proper account.
You’ll then tell them that you received their letter/saw them on your credit reports and that you are disputing their claims that you owe them anything and request validation of the debt. Some people include verbiage directly from the FDCPA, but that’s not necessary, collection agencies are trained to know that consumers can request validation of a debt owed. You will not acknowledge the debt as yours at no point during this letter at all, whatsoever!
You also want to include cease and desist verbiage, limiting their communication with you to writing. The last thing you want them to do is to start calling you after they send you one billing statement as a feeble attempt to ‘validate’ the debt.
Next, type your name. Notice I didn’t say sign. You will type or print. You will never include a copy of your social security card or your ID.
You really don’t need to add anything else, I know there are much longer letter templates online. The key is to customize the letter to fit your unique situation – if you want to include case laws, include it; if you want to include FDCPA or Fair Credit Reporting Act verbiage, include it; it’s completely up to you – it’s your dispute letter!
Save a copy of your letter and log the date that you mailed it off. You will not send this letter regular mail; you want to have a paper trail. Send it certified or first priority mail and pay for return receipt. This is about $6, but it’s cheaper if you select to receive the return receipt electronically.
That’s it! Pretty simple, right?! After the collection agency receives your letter, they will mark the account as ‘in dispute’ with the credit bureaus. You’ll receive a response in about 30-40 days either validating the debt or informing you that they will be stopping all collection activities. If you need a few examples, I have a free Dispute Letter Package in my store.
To find out more about how to tackle the collections on your credit reports, check out my Fire Your Collections course inside of my online members club, Credit on Fire Academy.
Hope this helps 🙂