Skip to content

What Constitutes Proper Debt Validation

Most people would be appalled at the thought of a total stranger calling out of the blue and demanding money. It is absolutely absurd. But this is what occurs when a junk debt buyer demands payment for debt and; unfortunately, many consumers pay without questioning the validity of the debt.

Debt validation provides a way for consumers dealing with debt collectors to verify the accuracy of a debt. But the question of what constitutes proper debt validation remains unclear. A few old credit card statements is insufficient proof. Even an original contract does not necessarily mean a debt collector has a right to collect a debt.

Debt Validation is not properly defined

The Fair Debt Collection Practices Act does not have a hard and fast rule on what constitutes debt validation. At a minimum, proper debt validation should include an account balance along with an explanation of how the amount was derived. But most debt collectors respond with an account statement from the original creditor as debt validation and that’s generally considered sufficient.

But there are states that have enacted their own debt validation laws which go a lot further than the federal FDCPA. States such as California, Massachusetts, New York and Texas currently have enhanced debt collection laws intended to provide protections beyond what is currently required by the Federal Fair Debt Collection Practices Act. Check with your state to see if any additional debt collection laws that address debt validation/verification exist.

What debt collectors believe constitutes debt validation

Most debt collectors believe proper debt validation is simply verification of your name and the amount owed. In the matter of Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir. 1999), the court adopted a relatively low legal standard and ruled as follows:

“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.”

Debt collectors believe, based upon this case, debt validation is simply a matter of verification. But this case had a special circumstance where Chaudhry specifically requested an itemization of attorney fees and was provided a detailed validation response.

Chaudhry further requested additional itemization as he thought what had been provided was insufficient. The debt collector argued further detail of attorney fees would reveal privileged information. The court ruled what had been provided was sufficient. As you can see, debt validation is not “one size fits all.” It must be viewed on a case by case basis.

Significant Court Rulings on debt validation

In the matter Spears v. Brennan, 745 N.E.2d 862 (Ind.App. 2001), a signed contract was provided as debt validation and the court ruled as follows:

“The contract in no way provides sufficient verification of the debt. A review of the document reveals that it identifies only the terms of Spears’ loan, including a 17.99% annual interest rate and the original loan amount of $2,561.59. The loan agreement contains no accounting of any payments made by Spears, the dates on which those payments were made, the interest which had accrued, or any late fees which had been assessed once Spears stopped making the required payments. Indeed, the existing unpaid contract balance at the time Brennan sent the debt collection notice was at least $350.00 more than the original loan amount.”

According to this case, the debt collector must, at the very least, provide a full payment history and an explanation of how additional fees were calculated.

In the matter Fields vs. Wilber Law Firm, 383 F.3d 562 (7th Cir. 2004), the initial dunning letter from Wilber Law firm included an inflated total amount due. That inflated amount was an extra $250 for attorney’s fees. The actual amount of the debt was $122.06. The court found the total amount due could be misleading:

“An unsophisticated consumer could reasonably wonder why her bill was now $388.54, even assuming she had saved the original contract that specified she could be charged for attorneys’ fees. It would be difficult for such a consumer to understand how a relatively modest fee for services rendered had tripled in size… It is unfair to consumers under the FDCPA to hide the true character of the debt, thereby impairing their ability to knowledgeably assess the validity of the debt. One simple way to comply with § 1692e and § 1692f in this regard would be to itemize the various charges that comprise the total amount of the debt.”

Proper debt validation documents

Although these cases differ in nature, at a very minimum debt validation should include:

  • An itemized accounting of how the total amount of debt was calculated including fees and interest.
  • Account statements from the original creditor.
  • Payment history with the original creditor or a copy of the original signed contract between the original creditor and debtor.

Here is a sample debt validation letter.

However, under Section 809 of the Fair Debt Collection Practices Act, debt collectors are only required to take minimum actions. Here is what the FDCPA says:

§ 809. Validation of debts

(a) Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, 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.

(b) 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 any 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 title 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.

(c) The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.

(d) A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a).

(e) The sending or delivery of any form or notice which does not relate to the collection of a debt and is expressly required by the Internal Revenue Code of 1986, title V of Gramm-Leach-Bliley Act, or any provision of Federal or State law relating to notice of data security breach or privacy, or any regulation prescribed under any such provision of law, shall not be treated as an initial communication in connection with debt collection for purposes of this section.

According to the above FDCPA Section, Debt Validation is defined as the debt collector contacting the original creditor to affirm the debt amount being requested is correct. It is highly doubtful the debt collector ever contacts the original creditor for any debt validation purposes.

If an original creditor statement and any other information is provided to consumers as debt validation, it was most likely already in the debt collector’s possession after the junk debt buyer purchased the debt. Junk debt buyers are not in the habit of obtaining, upon a consumer’s debt validation request, documentation directly from the original creditor.

Be Prepared to Seek Legal Action

As a consumer with rights under the FDCPA you have to be prepared to seek legal remedies in order to enforce your rights. Most junk debt buyers do not want to spend money pursuing or defending a lawsuit. They are looking for a quick resolution.

In legal actions you will discover junk debt buyers rarely, if ever, are able to prove a legal right to collect the debt because they ALMOST NEVER have the proper assignment of debt from the original creditor. Most debt collectors purchase debts for pennies on the dollar and have no relation to the original creditor and more importantly, the original creditor DID NOT assign or transfer the debt. The debt was purchased by them, not assigned to them.

Consumers must also be prepared to have a lawsuit brought against them if the debt is still under statute of limitations and enforceable by law. Consumers who are sued by debt collectors have a great chance of winning as long as they answer the lawsuit and do not allow a default judgment to occur. As stated above, junk debt buyers have a hard time proving they were assigned a debt.

15 thoughts on “What Constitutes Proper Debt Validation”

  1. Thank you Lisa. You have no idea how much it helped.

    I followed the steps and received the Debt Validation Letter but it’s a Health Insurance Claim form 1500 that looks like it’s from a provider who filed the itemized claim. But they didn’t provide: 1. a written agreement that created my original requirement to pay; 2. a debt collection license from my state; 3. and the total change and balance due doesn’t match; 4. My original signature.

    Not sure what steps are necessary after this because what if they just keep sending incomplete documents and it goes on and on and on?

    1. You are very welcome.

      Unfortunately, the FDCPA does not give a period of time in which debt collectors must respond to a validation request, nor does it make mention of actions to take if you receive incomplete documentation.

      It’s not uncommon for consumers to receive a response several months later if they receive a response at all. In some instances, the debt collector will discontinue collection efforts.

      Collection efforts can continue indefinitely as long as the debt remains unpaid. However, after the 7-year credit reporting statute of limitation has passed, it can no longer appear on your credit reports. Plus, after your state’s debt statute of limitation has passed, the debt becomes uncollectible.

      Because this is a medical debt collection effort, you can request they produce a signed HIPAA release authorization form. However, if you did not sign a HIPAA authorization release for any third-party debt collector to have access to your privately protected health information you can inform the debt collector they are in direct violation of HIPAA laws. You can inform them that you will report this violation to your state’s attorneys’ general office, which usually gets them off your back because HIPAA violations carry a heavy penalty.

      Consulting an attorney adept in FDCPA rules to initiate a civil action may be the last appropriate remedy if debt collection efforts continue, thus getting the facts before a judge.

      The best of luck to you!

  2. I send a debt verification letter to a collection agency which also included the signed contract of the loan agreement. What they send me was a letter that looks like it was from Chase. The Chase letter was an notification that my credit was being to sold the collection agency . The letter including my name and loan amount. Is this sufficient proof of validation.?

    1. The federal FDCPA does not explicitly require debt collectors provide signed contracts from the original creditor. However, your state may have specific laws pertaining to debt collectors that require more proof. Check your state statutes to see if they require specific documentation that debt collectors must provide by way of an enhanced debt validation process.

  3. Hello I have a situation (below) I was hoping you could help me with:
    I took out a payday Loan in 2009. I did default on it because my bank account was closed. However, I remember going into the office and paying off the debt in person (cash). However, I have no proof of this as it was nearly 7 years ago. It is showing up on my credit report from collection agency “Ad Astra”. I sent a verification/validation letter and they sent a copy of the contract (with my signature) and a print out –im assuming from their own computer and not the original creditor– of my bill. There’s no bank account info, or cancelled check just amounts and dates. The address listed on said bill is my current address and not the original address.
    Despite all this I mailed them a pay for delete letter. My offer was to pay half if they agreed to delete the account from credit reports. a couple of days later I received a “Validation Response” letter. As if I was disputing the debt, not trying to settle it. Printed on the letter is the last four of my social, which is correct. They also listed the last 4 of my DrLic, but those numbers are incorrect. The default date is also incorrect.
    Questions I have for you:
    Can I dispute it with the Credit Bureaus because information is incorrect?
    Can I ask for proof of cancelled checks?
    Can i dispute with them even though I have no proof of payment?
    What’s your advise for me?

    Thanks in advance for any help you can give me!


    1. Questions I have for you:
      Can I dispute it with the Credit Bureaus because information is incorrect? Yes, you can dispute any inaccurate information reporting on credit reports.

      Can I ask for proof of cancelled checks? Yes, you can request as part of debt validation cancelled checks, however, there is no requirement, unless you live in a state like Texas (they have strict debt collection laws), they provide cancelled checks.

      Can i dispute with them even though I have no proof of payment? Again, you can dispute inaccurate information on credit reports as well as dispute directly with the debt collector. But they can simply verify the information as accurate, which they will probably do. You can request the Method of Verification which may get you some results but that’s only after you go through the dispute process.

      My advice would be to pay them in exchange for deletion. I mean an original signed contract is technically proof you took out the loan. Do some research to get the name of a CEO or someone in upper management of the company to offer another “Pay for Delete.” Sometimes with pay for delete requests you have to make several attempts before it gets in front of the right person. Follow-up the pay for delete letter with a call to a manager. You have to be diligent…bugging them every chance you get. Offer to pay in full and they may be willing to work with you in exchange for a deletion. They may only take pay for delete requests over the phone and if you are able to pay them immediately. If that is the case make sure you at least record the call for proof of the agreement.

  4. Thank you very much for the information. I learned about fighting debt collectors in the 90″s, when AT&T (before Comcast purchased their cable business) put me in collection for a cable modem I returned after moving to a new house. It was a surprise because suddenly 3 years later I started getting calls and letters from collection agencies, I had no idea what they were for. The only information the collection agency would provide was AT&T and an amount, but not what it was for. Calls to AT&T were more astounding, because AT&T has no idea what I was talking about. I had to make the assumption that it was for the cable modem, because that was the only business I had with them. In those days debt collectors were vicious and unrelenting.
    In 2008 I had a business that failed with about $50K in debt. Debt collectors were coming out of the woodwork. I actually had to use a service to block calls, and open a PO box to route my mail. We kept the home phones ringer turned off it was so bad. I was able to keep them off my back by forcing them to validate the debt, and 99% of them would just sell it off to another debt collector. Even today with all that debt expired, I still receive periodically a letter from some debt collector attempting to collect. They usually go away when I send them a debt validation letter.
    In the past it used to be much easier to keep debt off your credit report. In the past when the creditor assigned or sold debt to the collectors, the debt collector would show up on my credit report. After forcing them to validate the debt (it usually took a few months), the collector would send a letter that they were removing the debt from the record, and it would be gone unless another debt collector picked it up. Now, even if a debt collector is collecting, the original creditor shows up, and even if you get them to stop collecting, the original creditor still shows up on your credit report.

    1. Unfortunately unpaid debt does not go away. The good news is there are state statute of limitations laws that prohibit legal action after a period of time has passed. We also have the federal Fair Credit Reporting Act which says 7 years is the time limit a negative account like a charge-off or collection account can remain on credit reports. But a debt collector can go after unpaid debt until it is paid. They just don’t have any LEVERAGE to make you pay.

      As far as the original creditor, debt validation does not apply to them. They can legally report a negative account for 7 years and most exercise that right. Even if you get a debt collector to delete a collection account, the corresponding original account that precipitated the collection account remains. But there is good news too with original creditors, the older a negative account gets, the less impact it has on credit scores.

  5. Hi, Lisa

    I found your post through a google search on proper debt validation. I would like to know if it is okay to use some of your excerpts from your post for a debt validation letter I’m planning to send. I found your information to be very helpful.

    Thank you!

      1. Thank you once again! I would like to suggest an additional “Significant Court Rulings on debt validation” item for your post: Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, — F. 3d — (6th Cir. 2014), 2014 WL 3440174 (6th Cir. Mich. 2014), 2014 U.S. App. LEXIS 13498

        Long story short, the court elaborated on a condition for how a debt collector must reply to a debtor’s request for verification of a debt under the Fair Debt Collection Practices Act § 1692g(b). I found this during my quest on proper debt validation.


  6. I went to court for foreclosure. The court clerk never informed me i had a court date. I went to court on Thursday to check and found out i had court on monday trial? The plaintiff was informed by the court, defendent was not. I was told i could not bring any evidence for my defense! Why. The plaintiff did not show up for hearing not me. The court clerk and referee is adding and abetting the fake foreclosure. I went in and requested the VAILIDATION OF DEBT FROM ATTORNEY. he did not have one. Sooo how did this case get into the system court clerk MR. KENNA Queens county. Thankgod the judge was on point. Made him leave to go get it. He sent mea statement from hum. Hahahah. Stand up. Read SCRIBD its true. A4V

Leave a Reply

Your email address will not be published. Required fields are marked *