Is this illegal? Please advise.

As far as I know the company authorized to collect on your debt should validate the account before sending further payment notice. Now if this company has sent your file to a different location, your debt should be validated in the first place because the information you requested is still pending. When they call you next time, tell them about your validation request before you send them money.

Received yet another letter from them today March 29th demanding payment yet again, only this time they give me until 4/9/2007 to pay. I still have not received any validation. Why are they still trying to collect on this without even sending me validation? What step should I take next?

They committed a violation of the fdcpa. Not by continuing to ask for payment, but by giving you ntil 4/9/07 to pay when you have a validation letter that must be answered by 4/12/07. The law allows them to keep asking, but they cannot threaten further action until after they validate.

I filed a complaint with the BBB and within days allied interstate sent me a letter explaining that they will no longer contact me and that the account was written off. I am keeping both the copy the Better Business Bureau sent and the one Allied sent for possible future actions. Allied sent this because they could not validate and they even admitted in their letter that they purchased the account from a third party.

Thats great! Arent you glad that you waited it out?? How can they expect you to pay a bill that they cannot validate???

Yes I am glad that I waited. This forum has been very helpful in the advice offered!

They probably won't contact you, but they will sell it off to another deadbeat collection agency that will contact you. Now you have the experience to deal with them. Goodluck