Getting a letter from a debt collector can be disconcerting, especially if you were not aware of having debt. Your initial communication from the collector, called a demand letter, should contain information indicating how you can request more details. By law, you may request the debt collector validate the debt, and the collector must respond within five business days. (Requesting that is especially smart if you are worried that the debt collector is not legitimate; a legitimate collector will respond.) You can find more information about your rights from the Consumer Financial Protection Bureau.
Recently a reader with the handle “Sonnycam” wrote to ask us what sort of documents or other evidence would prove a debt is legitimate. Unfortunately, the answer is not simple.
Before You Say, ‘It Can’t Be Mine’
One uncomfortable truth is that debts you don’t recognize are sometimes legitimate. That can be true if, for example, a store credit card is handled by an issuer with a different name. Another reason you might not recognize the account is because it was turned over to collections. Medical collection accounts in particular can be confusing because debt collectors must be sure they don’t violate medical privacy laws. So if someone owes a cancer treatment center, for example, the collector can’t reveal the name of the facility without potentially violating someone’s right to medical privacy.
Joann Needleman, president of the National Association of Retail Collection Attorneys, says it’s easier for collectors to validate debts (the word “validate” doesn’t have a legal definition) if a collector knows precisely what a consumer’s question is. Are you saying you don’t think you’re the John Doe the collection agency is looking for? Are you saying the balance is wrong? Or that you want confirmation of payment? Or that you don’t believe you incurred the debt?
If you are asking questions, it’s best to give the collectors enough personal information (the last four digits of your Social Security number, for example) so they can be confident they are communicating with the right person — because under the Fair Debt Collection Practices Act, it’s a violation to provide debt information to a third party. Legitimate collectors should be complying with laws.
What to Expect
As far as “proof” of a debt, “The barrier to validation is low . . . extremely low,” says Michael Bovee, founder of the Consumer Recovery Network. “A statement or two, and a collector telling you who the bill was owed to and the amount, and many debt collectors are covered. There is a ton of terrible advice [about] what to ask for in a validation letter. The problem with this is people reading about it, and using the letters and verbiage, have, or are set up to have, unrealistic expectations,” he wrote in an email.
Robert Hobbs, deputy director of the National Consumer Law Center, agrees that validation can be difficult because of the laws and because of individual situations. If you believe the collector is not behaving appropriately, you can submit a complaint to the Consumer Financial Protection Bureau. The bureau will log the report, and complaints require a response from collectors, he said.
Hobbs said if you believe a collector has violated your rights and you want to take legal action, it’s best to contact a lawyer through the National Association of Consumer Advocates. He said the vast majority of other lawyers are without expertise in this area. “Find someone who specializes in fair debt collection problems,” he said. “They may say, ‘that’s interesting . . . you may have a case.’ Or they may tell you that you don’t.” That way, you won’t waste time and money you could use more productively elsewhere.
You can always try filing a complaint with the Consumer Financial Protection Bureau as well if you think the collector isn’t providing you with enough information to determine the debt is yours or if the amount is correct.
Finally, if you’re concerned about the effects a possible collection account could be having on your credit, it’s a good idea to check it. You can pull your credit reports once a year for free from the three major credit reporting agencies through AnnualCreditReport.com — check them for past-due and collection accounts. You can check your credit scores for free through Credit.com, where your scores are updated monthly, along with an overview of your credit health and a plan to help you build your credit.
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