Whenever a collection agency or a creditor attempts to collect a debt from you, it’s important to make sure the debt is valid. You don’t want to pay more money than you owe, nor do you want to pay a collection agency that isn’t following the law. For this reason, there is the process of debt validation.

What is debt validation?
In the simplest terms, debt validation involves contesting the validity of a debt. This is important because if a debt isn’t valid - or can’t prove to be valid - it shouldn’t be paid. In debt validation, you - the debtor - ask debt collectors to verify that the debt in question is indeed legit. They also must verify that their attempts at collection are valid and legal. The burden of proof, by law, falls on the debt collector, not on you.

During debt validation, several things must be verified. First of all, they must prove that the amount they are trying to collect is legitimate.  Every dollar must be accounted for. This includes verifying that goods and services were ordered, received, and met all applicable terms and conditions. They must also prove that they are legally allowed to pursue collection of the debt in the state or area where you live.

What is considered an invalid debt?
In the simplest terms, an invalid debt is one that can’t be proven. Any debt that isn’t accompanied by the correct documentation, such as receipts and invoices, is considered invalid. An invalid debt is also one that is being collected by an agency that doesn’t have permission to collect in the area they are pursuing.

Some examples of an invalid debt are:

• Merchandise or services received were not ordered.
• Merchandise was not received or services were not performed
• Merchandise or services received were not as represented by the seller.
• Merchandise or services are of inferior quality.
• Merchandise was received damaged.
• Merchandise or services were received too late to be of use
• Merchandise or services were received short of what was ordered
• Seller was to install equipment and did not.
• Seller was to train our staff and did not.
• The price charged is higher than the price quoted
• The services were not provided by the individuals who were promised
• Credits are due for charges added that were to be included in the price (i.e. freight, installation, etc)
• Credits are due for returns, overcharges, billing errors or other adjustments, etc.
• The seller breaches a warranty
• You are a victim of fraud

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What should I consider during debt validation?
Validating a debt is always important. Not only do you want to make sure you aren’t paying more than you owe, but you also want to make sure you aren’t paying the wrong collection agency, or creditor. But, one more thing needs to be considered: the statute of limitations. The statute of limitations on a debt varies depending on where you live, but debt does run out. Before paying a debt, make sure the statute hasn’t expired. If it has, paying anything, even ten dollars, can reawaken the debt and start the statute all over again.

What can challenging the validity of the debt Do?
First of all, challenging the validity of the debt protects you from paying what you do not owe. But, it also disrupts the collection process. Rather than simply turning over your debt to the collection agency, you challenge them to prove it. This puts their collection efforts on hold.  They are forced to put forth extra effort and initiative to prove you owe what they say you owe.

Challenging the validity of a debt also protects your credit report. Creditors and collection agencies used to routinely report disputed debt to collection agencies. But, under an amendment to the Federal Fair Credit Reporting Act, creditors and collection agencies can be held at fault if they unjustifiably hurt your credit. Under this law, creditors and bill collectors must investigate the disputed debt and accurately report it.

What is the process of validating a debt?
Validating a debt involves several steps. To begin, you should request copies of relevant documents. This includes copies of contracts, agreements, policies, invoices, purchase orders, statements of reconciliation, statements on how balances were calculated and anything else you can think of.

It’s important to make sure you communicate efficiently with the bill collectors and/or your creditors. It’s best to do this in writing in the form of a “Dispute Letter.” This letter should bring up the issue and how you would like it resolved. Make sure you don’t show your hand in the dispute letter: keep it brief, succinct, and only provide the information that they need to know. Send the letter certified. They must reply within 30 days of receipt.

It’s also wise to send credit agencies a letter letting them know of your dispute.

If the collection agency responds with proof of your debt, make sure that they are actually allowed to collect in your state. They might not be. If they aren’t, write another letter and demand that they cease collections.

If the collection agency responds without proof of your debt, write them another letter, bringing up their violation under the law. Demand that they cease collection efforts or state that you will sue. Follow through with a lawsuit if they don’t stop pursuing your debt.

Debt validation may seem like an arduous process, but it is worth it to protect your financial well being. However, it’s important to remember that contesting a debt must be done in a legitimate matter. Making ridiculous demands or being over the top will leave you ignored and not taken seriously. Be professional, be communicative and stand your ground. Remember that the burden of proof falls on the collector, not the debtor.