- 1). Read the letter sent to you by the collection agency. Under the Fair Debt Collections Practices Act (FDCPA), within five days of telephone contact, federal law requires a bill collector to send a letter to you that includes the name of the collection agency, the amount of the alleged debt and the company's contact information. It must also include verbiage that informs you that it is a collection agency and any information you provide will be used for that purpose. Keep that in mind when speaking with a collector via telephone because anything you say, or any information you provide, can be used against you at a later date.
- 2). Send a debt validation (DV) letter to the collection agency. Under the Fair Debt Collections Practices Act (FDCPA), a bill collector must provide valid proof that the debt belongs to you. This is not an optional choice for the collection agency, a requirement. From the date of this initial letter, you have 30 days to request debt validation. Send the DV letter to the collection agency's physical address. Always mail such requests via certified mail, return receipt requested to prove that the request was actually received by the agency. Once the agency receives the letter, it is not allowed to contact you further until validation of the alleged debt has been provided to you. Once the proof has been sent to you, they may begin collection efforts again. Debt validation should include the name of the original creditor, the address of the original creditor, the bill from the original creditor that proves how much you owe and the original signed contract, if applicable.
- 3). Order a copy of your credit report while you are awaiting debt validation. The Fair and Accurate Credit Transactions Act (FACTA), enacted by Congress in 2003, gives consumers the right to request a free copy of their credit report from each of the three credit bureaus. As part of FACTA, Congress created the website www.annualcreditreport.com to facilitate consumers' ability to order their reports from TransUnion, Experian Equifax. You may also order the free report directly from the websites of the three credit bureaus. If you'd rather not order online, credit report requests can be made via telephone or mail.
- 4). Check your credit report thoroughly. A collection agency is not allowed to place a collection's debt on your credit report within the first 30 days of initiating contact with you. Under the Fair Credit Reporting Act (FCRA), only accurate and valid information is allowed on a credit report. If the debt appears on your credit report already, initiate a dispute with the credit bureau to have it removed. After the first 30 days, the collection agency is allowed to add it to your credit report if the debt is valid. On the other hand, if a collection agency is unable to validate a debt, it is not allowed to place it on your credit report at all. You can dispute a debt online at the credit bureau's website or via mail.
- 5). File suit in small claims court against a creditor that refuses to validate a debt yet continues to contact you, or if the debt is added to your credit report without validation. Congress enacted the FDCPA and the FCRA to protect consumers against these types of abuses. Collection agencies face monetary penalties for violating your rights and thus, most reputable collectors will validate the debt in compliance with the law because it's much cheaper to do that than defend a lawsuit. There are times, however, when an unethical agency may assume that you are unaware of your rights. It is then up to you to enforce those rights given to you by Congress. Seek the advice of a consumer lawyer on the best way to proceed.
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