What is a validation letter?

On Behalf of | Dec 27, 2022 | Creditors' Rights |

Debt collectors have rights and responsibilities when it comes to collecting on their debts. It is crucial for these people to follow guidelines set by the government.

Failure to follow said guidelines can result in serious penalties, like enormous fines or even time in jail.

Steps to creating a validation letter

The Federal Trade Commission discusses the Fair Debt Collection Practices Act, which governs how debt collectors can proceed with their cases. Under the guidance of this act, debt collectors must send a validation letter after they speak with a person about the debt they owe.

When creating a validation letter, the debt collector must include the amount of money the debtor owes, the name of the creditor they owe the money to, and a statement that lets the debtor know the debt becomes assumed valid within 30 days of receiving the notice.

The debt collector must send this letter out no more than 5 days after they discuss the matter of debt with the debtor. They do not have to send this letter if the initial conversation addressed issues or if the debtor repaid their debt already.

Important information to include

Within the validation letter, a debt collector must also include information about what to do if the debtor wishes to dispute their debt. They must dispute within 30 days, and will receive verification of the debt by a judge via the mail.

The debt collector must also provide the original creditor’s name and address, if necessary, to the debtor. It is important that they let the debtor know they have access to this information.

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