This type of credit letter is used to validate the debt. You have the legal right to request validation and proof from those who claim that you owe them money. Whether it’s the original owner of the debt (the party that is allegedly owed money from you), or someone who has purchased said debt (for example, a collections agency that buys debt wholesale for pennies on the dollar.)
The process of requesting validation of your debts
Here are the three groups that are involved in collecting debt:
Original creditor: This refers to the party that is allegedly owed the money originally. It could be a utility company, a cellphone provider, a landlord, or anything else you can imagine.
Collections agency: They purchase the debt from the original creditor when the O.C. has decided that it no longer worth pursuing from you. Basically, they figure they aren’t going to get paid from you for whatever reason, so they sell the debt to a collections agency. Sometimes, they can be very aggressive and downright harass you. They have been known to phone people’s workplaces, their families, to speak to their kids for information, it’s just not a good scene in general.
Credit bureau: These are the record keepers. The collections agencies report to the bureaus, and the bureaus are used to determine whether you’re credit-worthy from places like banks for loans and mortgages, car dealerships, credit cards, and so forth.
The reason you’re legally allowed to request validation for any debts is simply to prevent you, as a consumer, from being taken advantage of. If anyone out there could just appear out of nowhere and claim you owe them money, then start harassing you, then threaten to add negative accounts to your credit report, it’s a very dangerous thing.
Now, for people who don’t monitor their credit reports on a regular basis, this could be happening without them even realizing.
It’s not always something that happens with malicious intent, accidents do happen. Sometimes numbers get mixed up, files get unsorted, and things show up that shouldn’t be there. In any case, there is a specific act that exists in order to protect you from these events. It is called The Fair Debt Collection Practices Act, or FDCPA. If you’d like to learn more about it, which you really should, you’ll find many results by looking up either of those terms.
Here is a sample debt validation letter
As we state with all of our letters, this was drafted as an example and nothing more. Don’t use this exact letter, customize something to fit your situation. If you aren’t comfortable that you can do so flawlessly, consult a professional instead like one of these companies. This isn’t the type of thing where you get a lot of tries, it’s very serious, and you can cause damage to yourself if this is done incorrectly. This example letter has not been written or edited by a lawyer, and we are not qualified to offer you legal advice.
(Your Full Address)
(Name of Who You’re Sending The Request To)
To Whom It May Concern,
This letter is being sent in response to a notice which I received on [date] / or in regards to an item listed on my credit report.
Please be aware that this is not a refusal to pay, please do not regard it as such. This letter is notice, being sent pursuant to Fair Debt Collection Practices Act, 15 USC 1692g Sec. 809 (8) to inform you that your claim is under dispute, and validation is being requested as required by the aforementioned act.
I am not requesting verification or proof of mailing address, I am requesting validation be made pursuant to the FDCPA. I am respectfully requesting for your offices to provide evidence which proves that I am legally obligated to pay you.
I am also formally informing you that if any invalid information has been reported to TransUnion, Equifax, or Experian, such an action may be considered fraudulent under State and Federal laws including, but not limited to, violation of the FCRA (fair credit reporting act), violation of the FDCPA (fair debt collection practices act)), and defamation of character.
If you are able to produce the aforementioned evidence, be advised that I will require a minimum of 30 days to investigate the validity of this information. While said investigation is underway, all collection activity must cease and desist.
Printable Creditor Collection Declaration
Here is an example of a creditor/debt collection declaration.