Writing Your Debt Collection Dispute Letter

September 29, 2009 by codename47

arm4.static.flickr.com/3442/3193232374_c81dd0e14a_m.jpg" alt="Debt" class="r">This is the second guest post in a special How to Fight Debt Collectors series on Bargaineering.com.

Writing a debt collection dispute letter is the first line of defense against a debt collector. Make them prove that the debt is legitimate before you do anything. Just because they have your name doesn’t mean the debt is legitimate. If you don’t remember it or you remember paying it off, a dispute letter can help you resolve it quickly.

Once you know who is calling you and what they are likely to do, it’s time to push back with a properly worded dispute letter.

Why? First, it’s fully within your rights to have the debt validated.

Second, many collectors try to add on fees, inflate the amount owed through interest, or otherwise get a little extra for their trouble. For folks terrified of your credit score, immediately paying a collector can earn you a big fat “paid collection” on your credit reports, which will tank your credit score just like an “unpaid collection” will.

If collectors can allege that you owe money, they should be able to prove it. Most people would laugh at the concept of paying a random stranger who asks for money, but somehow paying a random voice on the phone demanding money or letter makes sense. Instead of buying into such insanity, demand to see a bill or documentation of the debt.

Under Federal law, a dispute and validation request requires the collector to cease calling and obtain and send validation from the original creditor to you the consumer. Ceasing collection efforts properly would require putting all efforts on hold: phone calls, letters, credit reporting, etc. This doesn’t always happen, and when the collector fails to do so, they owe you money for each violation.

There are a lot of bad debt validation letters floating around on the internet. They are bad because ask for things a debt collector isn’t required to provide. They usually start with “This is not a refusal to pay but notice that your claim is disputed.” I can’t go into go into the many, many things that are wrong with these letters in this article and keep this article under 30 pages, but just remember the KISS principle and apply it here.

What does a debt validation letter need? No need to get fancy:

  • Name
  • Date
  • I dispute, please Validate
  • Do not sign the letter
  • Send it via certified mail

Pretty simple, right? Some may wonder why you don’t sign the letter. Some debt collectors might be tempted to do some Xerox magic and transfer your signature onto some other documentation where it previously was not. Furthermore, the Fair Debt Collection Practices Act (FDCPA) doesn’t require a signature, so why bother?

If you don’t want the collectors to call your place of employment add: “My employer does not permit calls at work or just tell them not to call you at work.”

Alternatively, if you don’t want them to call your house or at all, just add that “all phone calls are inconvenient.” Why inconvenient? The FDCPA prohibits calls to places or times that the consumer deems inconvenient. Just state that calls to your cell phone or house or all calls are inconvenient, unless you like getting debt collection calls. :)

Once you write the letter and send it out, you just wait. Most collectors will respond in a week or two. I will pick up what to do next if the collectors just won’t leave you alone in the next article.

(Photo: jaytamboli)

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  1. uberVU - social comments says:
    October 25, 2009 at 9:16 am

    Social comments and analytics for this post…

    This post was mentioned on Twitter by AntiqueCollect: Writing Your Debt Collection Dispute Letter http://bte.tc/kTV #RTW…