Validation of Debt Under the Fair Debt Collection Practices Act
What is proper validation or verification of a debt for the purposes of the FDCPA? There is ample confusion among consumers regarding the legal requirements of a debt collector.
Misguided InformationI receive many queries about this issue and the discussion usually goes something like this:
*I disputed the debt in writing so that means they have to prove the debt before they try to collect the debt again, right?
*Well, they received my validation letter and the only information in their response was the account number, the balance and the name of the original creditor. That*s not proper verification!*
These ideas are misunderstandings of what the debt collector is obligated to do. Many of my clients are duped by false information found on the internet. In sum, debt collectors don*t have to do much at all. The validation provision, (15 U.S. 1692g - Validation of debts), was created to insure the debt collector provides very basic information about the debt they are attempting to collect.
Notice of DebtThe initial obligation of the debt collector is automatic. They must first provide notice of the debt. Within the *initial communication* to the debtor or with five days after the initial*communication the debt collector MUST send the consumer a written notice containing*
(1) the amount of the*debt;
(2) the name of the*creditor*to whom the debt is owed;
(3) a statement that unless the*consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the*debt collector;
(4) a statement that if the*consumer*notifies the*debt collector*in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the*debt collector*will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the*debt collector; and
(5) a statement that, upon the*consumer*s written request within the thirty-day period, the*debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor
This is relatively simple and most debt collectors overwhelmingly find it easy to comply with this notice. (Conversely, there are some cases on the books wherein debt collectors do not comply with (3), (4) and (5) above). There are plenty of court decisions relating to this *initial communication*, but the focus of this article is on the subsequent verification.
Verification ObligationMost consumer confusion involves what happens AFTER receiving the notice of debt letter. The FDCPA indicates the consumer may dispute the debt, and request a *verification or judgment*:
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer*s right to dispute the debt or request the name and address of the original creditor.
To summarize, if a consumer notifies the debt collector in writing within thirty days of receiving the **1692g(a) notice that he/she disputes the debt or any portion of it, the debt collector must stop collecting the debt, or the disputed portion of the debt, and obtain verification of it and mail that verification to the consumer. (Bold emphasis added).
Three important points I want to note here: 1) If the consumer does not dispute the debt within 30 days of receiving the *initial communication*, the debt collector has no obligation to verify. In other words, if the debt collector sends a second or third, etc. letter, this is not the *initial* communication. 2) The debt collector*s failure to obtain verification within the allotted time frame does not make the debt disappear or otherwise invalidate the debt. It just means the that further collection attempts may be unlawful.
What Constitutes Verification of The Debt?The answer to this question is not straight forward. Courts generally analyze this on a case by case basis. It turns out that the type of verification required depends on the type of debt, whether you actually owe it or some of it, and the jurisdiction you reside in. Different courts have slightly different answers, so here is a brief summary followed by a general *rule of thumb*.
In Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir.1999), the Court of Appeals adopted a very low standard for debt collectors: "Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt." The Court also stated that a request for validation of the debt is primarily intended to eliminate such problems as collectors contacting the wrong person or attempting to collect debts which have already been paid.
Subsequent cases in many jurisdictions have expanded the debt collector obligation, but not significantly. In sum, the purpose of verification is to provide enough information to enable the consumer to *sufficiently dispute the payment obligation." The amount of information required depends on the facts of a particular situation, but the relevant court cases seem to indicate that an itemized accounting detailing the transactions in an account that have led to the alleged debt is the best verification.
The debt collector is not obligated to answer every question contained in your dispute letter. Nor is the debt collector obligated to always provide ALL transactions and a history of your account. The purpose of the request for verification is not to trap the debt collector so the consumer can avoid a legitimate debt. if you have a legitimate issue, (e.g. mistaken identity, identity theft, unlawful fees or interest, accounting or math errors), the debt collector must respond by providing enough information for you to resolve this legitimate issue.
Credit Forum GossipIf you are looking for information about responding to debt collection or addressing credit reporting problems, be leery of *advice* you find online. Although you may find some helpful information on credit forums and debt collection forums, you must understand these well-meaning folks are not authorities on the law.
Don*t let credit forum contributors be the source of your knowledge about the FDCPA. Like other *information* you may encounter on the internet, postings regarding collection laws are not necessarily factual. Do your research and locate multiple sources to double check conclusions you find about any law or legal interpretation. Or better yet, consult with a FCCPA lawyer before you begin communicating with a debt collector.