Question: The collection agency sent me copies of the last page of a signed credit contract and a statement from the original creditor. They did not send me any proof that I owe them. Am I still obligated to pay them?
Answer: In the article “What is Debt Validation” I speak about what documents do not constitute proper debt validation. Debt validation is supposed to come from the original creditor, which seems to be what the debt collector has done in your matter.
A signed credit contract is rarely produced when consumers request debt validation. I am surprised they actually produced one. While this can serve as debt validation, it is not complete and absolute proof. And the one statement, in my opinion, is totally insufficient as debt validation.
At this point it is up to you whether you choose to pay the debt. I cannot advise you not to pay your obligations; however, you may want to request further debt validation. For instance, how was the amount owed calculated? I am sure you understand when a junk debt buyer purchases a debt from the original creditor they do so at an EXTREMELY reduced cost.
Typically debt collectors pay pennies on the dollar for debts. Literally, they may only have paid .02 to .07 cents on the dollar for the purchased debt. At the very least some explanation of how they calculated the amount they are demanding, including interest rates, fees and costs, should be included along with the “proof” provided.
Take a look at “What Constitutes Debt Validation” you will see in a legal proceeding, the kind of debt validation you received does not hold up in court. You can request a 2nd validation, particularly requesting how the amount was calculated. Just keep in mind if the debt is still under the statute of limitations, you can legally be sued by the debt collector if they decide to go that route.
On the other hand, you mentioned payment. If you do decide to pay this debt and move on, make sure you benefit from their paying pennies on the dollar for the debt. In the article “How to Settle Debt with Collection Agencies” there are tips on how low you should start your offer. And, if you pay the debt please negotiate a total deletion from your credit reports. You deserve to get something out of the deal.
Paying a collection account unfortunately does nothing for your credit score. It just shows a paid collection, which by the very nature of it being a collection account, makes it a “negative” paid account. Check out the Pay for Deletion article to get tips on how to negotiate a deletion. Good luck to you.
