how you can validate a debt
Date: Fri, 12/09/2005 - 21:47
first, once an account has been placed with a collection agency, they are required - by law - to send a written notice explaining who they are, who they are collecting for and the amount they are trying to collect. it will also include the name, address and phone/fax # for the collection agency. there will also be something to the effect of 'if we don't receive written notice from you within 30 days to dispute the validity of the debt, it will be considered valid.' more on the 30 days limit later.
so let's say you get a phone call from a collection agency and you have no idea what it's for, you thought you paid the bill or you never knew you owed it in the first place. if you request a validation of the debt, odds are the agent will simply state a letter had been mailed out and that's all they are going to send. that is still within the law. it is practice for collection agencies to only send ONE letter to the debtor. the agency will send it to the address forwarded to them by their client. if the letter never reaches the debtor (for whatever reason), the agency is NOT required to send another letter. collection agencies are not billing institutions and it is not financially feasible for them to keep mailing out letters. and of course, debt evaders could keep on stating they never received the letter even if several were sent to the correct address. so, how do you validate a debt with a collection agency?
simple. follow the dispute procedures. according to federal law, if you send in a WRITTEN dispute of the charges, the agency must go back to the client to validate the debt. now the letter says within 30 days of receiving the letter, but any legit collection agency will accept disputes past that deadline. by putting your account in a dispute, it will cease all collection activity until a response is received from the client. if the debt comes back as valid, the collection agency will proceed with the necessary actions to collect the debt. your debt has just been validated. if the client states charges are not valid, case closed.
but, what if you want to see what you're being charged for? that is a different story and not technically part of the debt validation process. that is a customer service issue with the original creditor.
collection agencies do not always have access to past account history they are collecting on. in fact, very few (if any) do. once a debt is validated by the client, the debtor's record will be updated with the collection agency and notes will be entered into the computer system. the next time the agency calls back, they will be able to recite what the client said about the debt and why it's valid. now, getting back to finding out exactly what you're being charged for... odds are, the collection agency will not be able to help you. you can call the original creditor to find out, however they may advise you they no longer have the account and that you need to contact the collection agency that has it. doesn't sound good, huh? if the original creditor no longer has the account, why would they spend time talking to you about it? they're not. you probably won't get anywhere with them. but it's worth a shot. in any case, if the creditor can prove you owe the debt, you are still to pay the collection agency since they have the account. only onc company is allowed to solicit payment on a collections account at a time.
unfortunately there is no sure way of receiving a complete invoice of what you are being charged for in writing, outlining every single dollar you are being charged. accounts that have gone into collections are not treated with the same attention as current accounts that are being paid on time. it's too bad, but almost all debtors in collections are not given the benefit of the doubt.
hopefully i have given some insight as to the process, but like i said, there is no sure-fire way of ever receiving a proper validation. i believe others on this forum have a form which people can print out and mail to companies to validate a debt, but collection agencies are not required to provide all of the info on the form. furthermore, collection agencies don't even have access to some of that info.
if anybody has had success using other methods, by all means share them!
Quote:but, what if you want to see what you're being charged for
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but, what if you want to see what you're being charged for? that is a different story and not technically part of the debt validation process. |
Many collection companies take advantage of this part by giving an amount of $1500 on a $200 loan taken. The debtor wants to know the fact how the loan amount has boiled up to this amount within a period of few months. The agency replies, "we can't send you anything in writing..." How will the debtor know if the charges tacked with the principal amount are legitimate since the creditor won't give any information on the account as they don't have it?
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in any case, if the creditor can prove you owe the debt, you are still to pay the collection agency since they have the account. only onc company is allowed to solicit payment on a collections account at a time. |
One collection agency calls a person and asks him to pay on a certain debt. During these times, debtors contact the creditors with the account info. And see if they are holding that one with them. Yes, they are and also they are willing to work with them. But the collection agency insists that all payments have to be made to them. Why should that be? If the creditor has not sold the account to a collection agency, why they will pay to them? Since the collection agency is not giving any accurate info about the accounts, there is no reason for them to hound the debtor.
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unfortunately there is no sure way of receiving a complete invoice of what you are being charged for in writing, outlining every single dollar you are being charged. Accounts that have gone into collections are not treated with the same attention as current accounts that are being paid on time. It's too bad, but almost all debtors in collections are not given the benefit of the doubt. |
So, does this mean that all options of getting the complete break up of an account come to an end here? And the debtor has to pay what the collector is asking for without anything on paper?
There are still some good people in the collection field who will not oppress the debtor. And such good people will never tamper the accounts of the debtor understanding the fact that he already in a financial turmoil. But what to do with the other portion of people who are a bad name to the collection field?
You will find most of the people in this forum complaining about such incidences. They know that they have a past debt and it needs to be paid but they want to be sure that their money goes to their debt account and not into someone's pocket.
Quote:Many collection companies take advantage of this part by g
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Many collection companies take advantage of this part by giving an amount of $1500 on a $200 loan taken. The debtor wants to know the fact how the loan amount has boiled up to this amount within a period of few months. The agency replies, "we can't send you anything in writing..." How will the debtor know if the charges tacked with the principal amount are legitimate since the creditor won't give any information on the account as they don't have it? |
that is when you would have to contact the original creditor to see what the balance is. then you can compare that with the balance the collection agency is trying to collect. although the original creditor probably won't send you another detailed statement, they at least should be able to let you know the final balance that was turned over for collections.
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One collection agency calls a person and asks him to pay on a certain debt. During these times, debtors contact the creditors with the account info. And see if they are holding that one with them. Yes, they are and also they are willing to work with them. But the collection agency insists that all payments have to be made to them. Why should that be? If the creditor has not sold the account to a collection agency, why they will pay to them? Since the collection agency is not giving any accurate info about the accounts, there is no reason for them to hound the debtor. |
not correct. most of the time collection agencies are hired to collect on behalf of other companies. once that account is transfered to the collection agency, that agency in is charge of the account. period. and like i said before, it is against the law for two companies to collect on the same debt at a time.
look at it this way - you can't collect on a debt so you hire my services to collect for you. if i can collect the money i get a certain % of that amount for me to keep. if you start trying to collect on that account and you end up getting paid, then i get nothing. and odds are i have already made 200 calls to that person and wasted countless hours on that account. clients have contract with agencies and a general rule is that the client can NOT solicit payment from the debtors.
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So, does this mean that all options of getting the complete break up of an account come to an end here? And the debtor has to pay what the collector is asking for without anything on paper? |
sorry, but the only other option i can think of is hiring an attorney to delve deeper into the situation. however, collection activity does continue until the agency gets full attorney information.
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There are still some good people in the collection field who will not oppress the debtor. And such good people will never tamper the accounts of the debtor understanding the fact that he already in a financial turmoil. But what to do with the other portion of people who are a bad name to the collection field? |
know the laws and know your rights!!
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You will find most of the people in this forum complaining about such incidences. They know that they have a past debt and it needs to be paid but they want to be sure that their money goes to their debt account and not into someone's pocket. |
yes, that's a tough situation. collection agencies are businesses. and like all businesses, some are more law-abiding than others. however, is it fair to look at all collection agencies are evil and out to rip people off? in this day and age, you could walk around all day and find excuses as to why you shouldn't trust every single company you find. how about making a purchase online from bestbuy.com? how about getting your car repaired? how about signing up for your household utilities? you have to give them your ss#, right? i understand collection agencies have a bad wrap, but it's unfair to assume your payment will not be applied properly to the account which you owe on!
i might also add that if you refuse to communicate with the coll
i might also add that if you refuse to communicate with the collection agency who holds the account, you are putting yourself out there for credit reporting and the accoutn being sent back to the client as a refusal to pay. that could lead to much worse things. i understand it is not always easy to deal with collection agencies. if you get a rude representative, just hang up and call back. odds are you are bound to reach someone who will listen and work with you.
Quote:most of the time collection agencies are hired to collect
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most of the time collection agencies are hired to collect on behalf of other companies. once that account is transfered to the collection agency, that agency in is charge of the account. period. and like i said before, it is against the law for two companies to collect on the same debt at a time. |
I agree. But still if a CA insists to pay them rather than paying the original creditors and even after failing to prove the accounts with them, I consider legal some legal help at this point. right?? But what if that person can't afford to hire an attorney to stop the collection calls and on the other end, he is being continuously disturbed.
at that point, the debtor should just pay the debt with the coll
at that point, the debtor should just pay the debt with the collection agency and then dispute it with the original creditor. or they can then take legal action. the only way to really stop the collection process is to pay the debt. yes, it might be unfair, but until payment is made - collections will continue! i know this isn't a great answer, but honestly, there isn't much more that can be done. i do find a lot of the times that our client causes more problems for us than they should!
but again, if you send in a dispute letter to the collection agency,they are required to cease all collection activity until the debt is verified. that can take weeks, so that might buy a little time. one could also just send in a cease and desist letter for the time being. once it's sorted out any negative marks on the credit can be removed.
but, there is a problem with cease and desist letters - they are only valid for the company you sent it to!! that means if my company receives a c&d (we accept them verbally over phone also, but that's not required by fdcpa laws), you send the account back to our client who can then place it with another collection agency. and the cycles starts all over again.
Correct me if I am wrong, but isn't it a part of the collection
Correct me if I am wrong, but isn't it a part of the collection agreement for the creditor to notify the collection agency if they receive payment, either partial or full?
Example: I work for a vet clinic and do the billing. I turn all of our accounts we are unable to collect on to Collection Agency A. If a client comes into the clinic and pays anypart of the bill, I must notify the collection agency. The clinic must either pay the CA a percentage (previously agreed upon) or have the amount adjusted from totals collected from other bad accounts by the CA.
So what is the problem with paying the original creditor? I ask this in all sincerity, not trying to be hateful or anything.
Of course, I suppose things might work very differently for a major corporation - like a credit card issuer, as opposed to a small family owned business.
Ttthayden After the original creditor has sold the account to
Ttthayden
After the original creditor has sold the account to a collection agency, they won't accept any payments from the consumers for that account. The collector will keep making efforts to collect this money even though you might have paid to the original creditor. This is because he has paid the creditor earlier for this account.
The point that you have mentioned is possible when the account is still with the creditor and some internal collection agency has been hired in the process.
Quote:Correct me if I am wrong, but isn't it a part of the colle
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Correct me if I am wrong, but isn't it a part of the collection agreement for the creditor to notify the collection agency if they receive payment, either partial or full? |
they must notify the collection agency, yes. BUT, depending on the agreement between the two of them, the creditor will most likely not solicit any payment on the account and refer the debtor to the collection agency. of course, not everybody working for the creditor will follow procedure and they will take the payment even though they're not supposed to.
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Example: I work for a vet clinic and do the billing. I turn all of our accounts we are unable to collect on to Collection Agency A. If a client comes into the clinic and pays anypart of the bill, I must notify the collection agency. The clinic must either pay the CA a percentage (previously agreed upon) or have the amount adjusted from totals collected from other bad accounts by the CA. |
you must have an agreement with the collection agency which allows you to still accept payment when accounts are currently with them. it usually does not work that way for larger creditors.
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Of course, I suppose things might work very differently for a major corporation - like a credit card issuer, as opposed to a small family owned business. |
bingo.
Quote:After the original creditor has sold the account to a coll
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After the original creditor has sold the account to a collection agency, they won't accept any payments from the consumers for that account. The collector will keep making efforts to collect this money even though you might have paid to the original creditor. This is because he has paid the creditor earlier for this account. |
keep in mind roxette, not all collection accounts are 'sold' to collection agencies. that is generally for very very old accounts. secondary and 3rd party collection accounts aren't sold. instead, the creditor merely 'hires' the collection agency to collect the debt. the agency will get keep a certain % of that amount. either way debts should always be paid with the company (creditor or collection agency) who currently has the account!!
I know this Matt, thanks. Creditors send all recent defaults to
I know this Matt, thanks. Creditors send all recent defaults to an agency being hired for the purpose. And, the junk debts are purchased by some of the CAs. This gives me one more point to discuss with you. When a junk debt is purchased by the CA, especially when the debt is out of the SOL period or the FCRA reporting time, what is the purpose behind this purchase? The consumer is legally not obligated to pay it. So, what is the reason behind the CA spending money and knowing the fact that the consumer won't be legally forced to pay the amount?
Correct me if I am wrong but did Collector Matt state that CA's
Correct me if I am wrong but did Collector Matt state that CA's do not have to validate - just check with the original creditor for a balance amount and send you a statement? Whoooooaaaaa. Give me a break!
How often do you think that these amounts are going to be accurate?
And then I read to call back if you get a nasty representative from the CA agency. Geez. Anybody that abides by a verbal agreement has to be totally naive.
Validate, C&D except thru the mail,
Know your rights,
AND DON'T TALK ON THE PHONE WITH A COLLECTION AGANCY! GET IT IN WRITING.
Quote:I know this Matt, thanks. Creditors send all recent defaul
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I know this Matt, thanks. Creditors send all recent defaults to an agency being hired for the purpose. And, the junk debts are purchased by some of the CAs. This gives me one more point to discuss with you. When a junk debt is purchased by the CA, especially when the debt is out of the SOL period or the FCRA reporting time, what is the purpose behind this purchase? The consumer is legally not obligated to pay it. So, what is the reason behind the CA spending money and knowing the fact that the consumer won't be legally forced to pay the amount? |
in my opinion, companies will purchase those accounts because they think they can dupe people into paying them off. and you know what? it works a lot of the time. although the consumer may not be legally responsible for the debt any longer, they certainly can still pay it. and as long as the collection agency abides by federal and state law, nothing can be done about it.
Quote:Are CA under any obligation to work with you by allowing y
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Are CA under any obligation to work with you by allowing you to make payments? |
nope. even if they extend a payment or settlement offer to you, they can take it away for any reason at any moment. of course there is no reason to as long as you hold up to your end of the bargain.
Quote:Correct me if I am wrong but did Collector Matt state that
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Correct me if I am wrong but did Collector Matt state that CA's do not have to validate - just check with the original creditor for a balance amount and send you a statement? Whoooooaaaaa. Give me a break! How often do you think that these amounts are going to be accurate? And then I read to call back if you get a nasty representative from the CA agency. Geez. Anybody that abides by a verbal agreement has to be totally naive. Validate, C&D except thru the mail, Know your rights, AND DON'T TALK ON THE PHONE WITH A COLLECTION AGANCY! GET IT IN WRITING. |
yup, you are wrong. and you know what they say about people who assume, right? which is why i won't comment on your spelling and grammar.
Collector Matt--- I'm in this situation right now. ASk collecti
Collector Matt---
I'm in this situation right now. ASk collection agency for validation. I don't hear back from them. Several months later, I hear from a total different agency who now has the account. I write and ask them for validation, the same thing again, go several months with out hearing anything, then hear from a total different agency. I have been doing this song and dance for almost a year now. Finally wrote original creditor and asked for their help, told them the situation. They wrote back and said they are no longer servicing the account and can give me no information on it. THey told me I should contact the CA concerning the debt. well, this is like a dog chasing his tail. a catch 22 because the CA won't provide me with any info either. THese are Dell financial accounts and they get passed around like hot cakes...all you have to do is ask for validation and they put it on a bus to the next collection agency.
This tells me that maybe they can't provide any info. Collection agency won't talk to me. Original creditor won't talk to me. whats your take on this one? shirley
