What’s a Debt Validation Letter?

“Attempts to collect debt not owed” accounted for about half of consumer complaints logged by the Consumer Financial Protection Bureau (CFPB) in 2020.[1]

Though millions of Americans have delinquent balances in collections, being badgered for debt you don’t actually owe is an all too common situation. Fortunately, a debt validation letter can offer protection in cases where you are being contacted by mistake or for debt you’ve already repaid.

And if a creditor or collections agency doesn’t send you a debt validation letter, or if it’s incomplete, you can use a debt verification letter (sample below) to confirm a balance is yours and hasn’t expired.

Taking these steps can help “protect you from scams operated by phony collection agencies or people attempting to collect time-barred debt,” says Bruce McClary, an executive at the National Foundation for Credit Counseling.

Let’s review the basics of debt validation—and verification—so that you don’t end up repaying or negotiating debt that’s not actually yours.

Creditors send a debt validation letter in an attempt to show whether you, as a borrower, owe them money and on what terms. The debt collector must provide a validation letter or notice within five days of first contacting you, according to CFPB rules.[2] If you don’t receive it, you can request the information by sending a debt verification letter (more on that below).

Typically, you have 30 days to respond to a collections agency after receiving the letter.[3] Requesting evidence that the debt is yours in writing can help you get proof of what you owe while documenting that you responded on time.

Thanks to the Fair Debt Collection Practices Act, the collections agency must furnish the following information:

• The dollar amount owed

• The name of the current and original creditors[4]

• That you have 30 days to dispute the debt before the collector can assume it’s yours

• That the collector has 30 days to respond by mail[5]

Take note of the collection agency’s contact information as well. You might call your original lender to ask whether this third party is legitimate, or look online for information about the agency. It’s possible that the person aiming to collect your debt is a “debt buyer,” or someone who has purchased the right to collect, and they may not have a full accounting of your payment history.[6]

You might not be legally responsible for the debt if:

• The debt collector made a mistake in contacting you

• You’re the target of a debt collection scam

• The debt’s statute of limitations has expired

If you’ve received a debt validation letter and plan to dispute the debt or your responsibility for repayment, you can fire off a debt verification letter. It will buy you some time to verify that the debt belongs to you, and bar the collector from contacting you for at least 30 days.[7]

In this letter, include any documentation that shows the debt isn’t yours. If you’re disputing a balance, for example, you might provide a copy of your most recent or final statement. (Of course, protect your information at each turn, and only provide it once you’ve confirmed the collections agency is a legitimate operation.)

You should also ask the debt collector for:

• Its license number and if it’s legally able to collect debt in your home state

• Proof that the debt is yours and isn’t time-barred, meaning that you can no longer be sued for it because your state’s statute of limitations has elapsed

• Basic details of the debt, such as how much you owe and when the debt was originally borrowed

The CFPB recommends dating your letter, sending a copy of it by certified mail and keeping records of the correspondence.[8]

It’s crucial to verify the debt and your responsibility for it before making a payment. In some cases, acknowledging or submitting payments toward an expired (or time-barred) debt can trigger the balance to come due.[9]

The CFPB has published sample letters to use when contacting collections agencies. In the case of verifying whether an outstanding balance belongs to you, this debt verification letter template can make it much easier to complete.

Although confirming owed debt should be straightforward—especially with a debt verification letter template in hand—it’s undoubtedly a stressful situation to face. You might be worn out from phone calls or mail saying that you owe considerable sums.

Fortunately, there are ways to get help with this process. You can:

• Contact a credit counselor from an NFCC-approved agency

• Contact your state’s consumer protection office

• Submit an online complaint to the CFPB

• Report scams to the Federal Trade Commission

When a debt collector is reaching out, it’s wise to act swiftly and smartly. By following the CFPB-recommended cadence and protecting your personal information, you can verify whether you owe a balance—and, if necessary, make a plan for repayment.