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Dispute and Debt Verification under FDCPA

Within five days of first contact, a debt collector is supposed to identify itself and advise you of your right under the FDCPA to seek verification. This right will also have what we call the “mini-Miranda,” which is notification to you that the communication is seeking payment of a debt (alleged debt) and that any information you provide will be used for the purpose of collecting that debt. You should dispute the debt and demand verification.

Disputing – A Step toward Protecting What’s Yours

Mini-Miranda

You must take the mini-Miranda seriously. Debt collectors often record, and always at least make notes of, anything you say. They are building a file on you from the first time they contact you. You should remember that anything you say that reveals financial information will be remembered by the debt collector, and that anything you say that sounds bad for you, like cussing or name-calling, may come up again at a bad time for you. This is why I say that silence is golden with debt collectors.

Verification

The other right you are told about, of course, is your right to seek “verification” or “validation.” If you request it within thirty days of receiving notice of your right, the debt collector must validate the debt and notify you before taking any further action on the debt. For some reason, debt collectors often will not do this if you seek verification, but instead will either ignore the request or sell the debt and move on to greener pastures.

What Is Verification?

Verification is not a clearly defined term. It was certainly not required as a means of slowing the debt collection process substantially. It appears to be almost a pure formality, but it does at least, according to most courts, require the debt collector to contact the original creditor and make sure, in some vague sense, that the debt is supposed to involve you. If that sounds vague or minimal to you, I’m sure you’re right. But it is an actual obligation that the debt collector take some time and do something besides harass you, and it does require them to stop harassing you, and it may give you a claim against them if they continue bugging you before verifying the debt. These are all good things.

And it often makes them go away entirely.

Right to Verification Can be Deceptive

The Right to Verification of the Debt

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When a debt collector communicates with you the first time, it is required to give you written notice of your right to dispute the debt and require “verification.” In my opinion, the level of verification required by law – if you make your dispute in writing – is pretty minimal. Still, the fact is that requiring validation seems to make a significant number of debt collectors go away, so it is apparently worth doing for that reason. It’s also an important first step in preparing to defend yourself from a law suit if it happens.

Remember, they don’t HAVE to verify – they simply have to verify before taking any further actions to collect. If they leave you alone, they don’t have to do anything else.

Deceptive Notice of a Right to Verify

A Dirty Trick by Debt Collectors: “This is a Communication by a Debt Collector” on the Lawsuit

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The essence of this trick is the habit debt collection lawyers have of putting on the legal pleadings that “this communication is an attempt to collect a debt… [ and on to the right to require verification].” The problem with this is two-fold. If it WERE a qualified communication, it would violate the FDCPA because the fact of the lawsuit and the timing required by that would “overshadow” the right to require validation.

HOWEVER, A LAWSUIT IS NOT A COMMUNICATION attempting to collect a debt under the FDCPA. Suggesting that it is one, and offering a “right” to require verification, can lure consumers into disputing the debt and requesting validation instead of answering the suit. Then, while they’re waiting for the debt collector to answer their dispute, the debt collector is getting a default judgment against them.

I know they do this trick, and I know that some people fall for it. If you have, you have a strong case for a motion to vacate the judgment. And the whole thing is probably a violation of the FDCPA and would give you a counterclaim under the appropriate circumstances.

Requiring Verification – Your Secret Weapon against Debt Collectors

When you get the first notice that a debt collector is after you, you should get an opportunity to “dispute and request verification.” That right is provided by the Fair Debt Collection Practices Act (FDCPA). Click here to get your free copy of the FDCPA. This video here explains why you should dispute the debt and require the debt collector to verify it. In other words, always seek verification  And this video shows you how to do it, and how it affects some of your other rights, because often a debt collector will either disappear completely once you seek verification or will fail to provide verification but still harass you – a violation of the FDCPA.

But remember this does not work if they file suit against you – if you don’t answer a lawsuit when it is filed, you will lose the case. See Bogus Right to Verification on Petition – Dirty Trick! If you have already sought verification but not received it, you might file a motion to dismiss based on their failure to verify.

Here’s what to do if they fail to verify the debt before suing you.

When debt collectors contact you for the first time, they are supposed to send you a written notice of your right to dispute and require them to verify the debt. They are to inform you that you have 30 days to send in this dispute, and if you do so, they are supposed to “verify” the debt prior to taking any further collection actions.

Now, to be clear, we do not think the “verification” to which you have a right under the FDCPA amounts to much, but we do, in fact, recommend making sweeping demands of the debt collector. At a minimum, you may get some materials that will be useful if they decide to sue you. And there’s a pretty good chance that disputing the debt will cause them to go away and leave you alone. I have never had a satisfactory explanation for why this might be, but it appears to be the case. Therefore it makes sense to demand verification when you first hear from a debt collector.

Take NOTE

This right to verification does not extend to law suits. If they serve you with a lawsuit, you must answer the petition or lose the case. You HAVE NO RIGHT TO VERIFICATION ONCE THEY FILE SUIT. But if they have contacted you, and you have demanded verification before they filed suit, then they should verify before filing suit. Failure to do so violates the FDCPA.

Also note two other things: your dispute should be in writing – they don’t have to verify if it isn’t. And while you have only thirty days to make the dispute, they can take any amount of time in providing that verification – it’s just that they cannot make other attempts to collect the debt until they do.

Two Kinds of Verification – FDCPA and FCRA- and How to Use them

We have spent much of our time talking about “verification” on our site and videos, and what we have meant in most of that has been the “verification” process provided by the Fair Debt Collection Practices Act (FDCPA). But there is another kind of validation you can use – validation as permitted by the Fair Credit Reporting Act.

We talk about that below and discuss how you can use both forms of validation, together or separately, to your advantage in defending yourself from the debt collectors and in repairing your credit.

The two kinds of verification are different rights. They apply in different circumstances, to possibly different “persons” under different circumstances, give different rights, and have different time requirements.

You can use them both, but they are completely separate. It is important to keep them straight.

Make sure you keep track of everything you do under either statute, and make sure that the response you get is appropriate for the statute you used for the specific right you invoke.

Rights under the FDCPA

Under the FDCPA, when a debt collector first contacts you on a debt, it is required by law to notify you of your right to dispute the debt and require “validation” or “verification.” The two words are used interchangeably, and the requirement is quite simple in general:

  • First, the debt collector must notify you of the right to dispute within 30 days (along with giving you the “mini-Miranda” warning – that anything you say may be used for collection of a debt) within five days of first contacting you.
  • And then, the debt collector must “verify” the debt if you ask within the thirty days provided.

Just to make clear, it is YOU who have 30 days to dispute after getting the notice of your rights. The debt collector does not literally even have to do anything at all and also has no time limit. It’s just that, if you dispute and request verification, it cannot make further attempts to collect on the debt until it has verified it.

Exactly what verifying it is, is not exactly clear.

It would appear that contacting the original creditor and “establishing” that the debt is yours would be enough. That’s because the purpose of the requirement is not to require a separate lawsuit, but just to protect consumers from harassment based on typos or mistaken identities. The debt collector has to take some action to connect you to the debt if you dispute it under the FDCPA.

Even this low burden often seems to be too much, and possibly that is because the second owner of the debt (if there is one) has no relationship to the original creditor and simply cannot get the debt verified.  Whatever the reason, asking for verification is often enough to make them go away. If they try to collect without having verified, that violates the FDCPA. And that in turn might allow you to stop a lawsuit brought against you.

Remember, however, that when the debt collector immediately files suit against you, this is not a “first contact” which triggers your right to notice and dispute. If you get served, you have to answer (or move to dismiss). It is not enough to request verification.

Disputing under the Fair Credit Reporting Act

There is another kind of validation, and it is completely different from the FDCPA, although you can use it to fight debt collectors, too. It is the validation provided for by the Fair Credit Reporting Act (FCRA).

This is your right to “dispute” an item on your credit report.

You do this after looking at your credit report and seeing something that is not positive. Let’s say you see a debt collector reporting that you owe a debt. Remember your right to verification under the FDCPA comes when the debt collector first contacts you to try to collect the debt. You can dispute a line item on your credit report at any time.

There are rules, and there are better and worse ways to do it. But it does not depend on the other side being a debt collector or having tried to collect the debt. It simply requires that they have put some bad information on your credit report.

When you seek verification under the FDCPA, the debt collector has to verify the debt before making further attempts to collect. When you “dispute” the debt under the FCRA, it doesn’t affect collection. Instead, you are forcing the company to “investigate” the debt and show that what it is saying to the credit reporting agencies is true.

If the company reporting you cannot validate the debt, it is just required to withdraw the offending credit reference. But it could still try to collect the debt.

If it does keep trying to collect the debt after withdrawing a bad credit reference, that might be a type of admission that it can’t prove the debt if the case goes to a lawsuit.

But it probably isn’t controlling on the case because “validation” of a credit report is not

the same thing as proving that the debt is valid.

A Helpful Strategy

Here’s a strategy that might be helpful. If you receive a bill from a junk debt buyer – a company that bought your debt from the original creditor, in other words – you should

send a request for verification under the FDCPA right away. Then you should and get your credit report and look at it.

If the debt collector is reporting your debt on your credit report, you will want to dispute the credit report and seek validation under the FCRA. Separately.

Remember these are completely different rights. Your sending two different disputes may confuse the debt collector, but remember that under the FDCPA it must provide proof as to your identity and its right to bug you, while under the FCRA it must explain why the information it put on your credit report was correct. The debt collector may not verify under the FCRA, in which case you can clear your credit report.

If it DOES try to validate, it will probably give you information that it would object to having to provide if it were suing you for the debt – so it’s a shortcut to some discovery in that situation.

You should not try to do the FCRA verification first because it takes too much time.

To do the credit dispute right you have to get your credit report and dispute it with the credit bureau before you dispute it with the debt collector under the FCRA if you want to protect all your rights. You don’t have time to work your way through the FCRA before asserting your FDCPA rights.

On the other hand, if the company does not verify under the FDCPA, that would be worth mentioning as a basis for your credit dispute.

We should add that when you get the first letter from the debt collector you may not even know whether it is reporting you on your credit report. They often do not, so you won’t know whether or not you will have anything under the FCRA. But if they are contacting you, you have the right under the FDCPA. Since it only lasts for 30 days, you need not to delay in disputing.

We always recommend sending your disputes by certified mail (and keep all the proof). You don’t have to do this legally, but these things often come down to a question of what you can prove, and having proof from the postal service is a very good investment.

Demanding Verification is NOT a Substitute for an Answer to Lawsuit

Don’t be a Verification Sucker

Demanding verification of your debt will NOT prevent a default judgment if you get sued.

People in debt trouble hear a lot about debt validation, and that is a good thing. I have argued that even though verification requires little from the debt collector, it’s still a good idea to make the demand when you’re first contacted by a debt collector who is trying to harass you into paying. I think that requesting verification sends a signal to the debt collector that you will defend your rights. If you get sued by a debt collector – even if that’s the first you’ve ever heard from them – you must do more. You must answer the lawsuit by filing your answer in court.

Anything short of that allows the debt collector to get a default judgment, and that will effectively end your rights to fight the debt.

Conclusion

When a debt collector (or creditor) files suit against you, you will have to file an answer in court to avoid a default judgment. Many people think all they have to do is “dispute the debt and request verification.” The right to verification, however, applies only to collection efforts that are not part of a lawsuit. Don’t be a verification sucker – file an Answer and defend yourself.

Requiring Validation – A Consumer’s “Secret Weapon”

In my opinion, requiring that a debt collector validate or verify your debt when they first contact you is underused as a weapon. It’s easy and free for you to do (and isn’t hard for them to answer, either), but surprisingly often it can lead to the debt collector walking away and leaving you alone.

The Fair Debt Collection Practices Act (FDCPA)

The Fair Debt Collection Practices Act (FDCPA) gives someone being harassed by debt collectors several useful tools. One of the best of these tools is requiring verification.

A “Secret”(?) Weapon

There’s nothing secret about requiring verification, but in my opinion consumers don’t use this one often enough. It costs nothing to use, takes very little time, and often, all by itself, is enough to convince them to leave you alone and look somewhere else for their victims.

The Right to Verification

Under the FDCPA, the first written communication from a debt collector must inform the consumer of his right to require verification of the debt (if the request is made within 30 days). Verification, or validation requires the collection company to go back to its source, the original creditor, and make sure that the consumer being contacted is the correct person and the debt is valid. Until the debt is validated, the collector may not take any further action on collecting the debt, and at least all the cases I’ve seen have included within that restriction any reporting of the debt to the credit reporting agencies. If the debt collector proceeds without verifying the debt first, you have a right to sue it.

The Requirement Is Absurdly Easy to Fulfill

The obligation is not very significant-a phone call will do, perhaps even as little as a checking of the computer tape or digital record. And yet even this minor obstacle will make the collection company go away surprisingly often. Perhaps the debt collectors view the early assertion of consumer rights as a warning of trouble to come.

Forming Good Habits Early On

And for the consumer, forming the habit of asserting legal rights seems to be an important step in bringing the whole debt situation under control. Out of this small acorn can grow a strong tree of financial security.

How to Require Validation

The way to require verification is very simple. When you receive a debt collection letter you simply write back to the debt collector and tell it you dispute the debt and request immediate verification. No special wording is required–nor is any special delivery (like registered mail), but I always suggest that you in fact send the request by registered mail, return receipt requested, so you will be able to prove that you wrote the letter, sent it, and that it was received by the debt collector. It is also a good idea to keep a copy of the actual letter that you send, too.

What If They’re Just Calling You?

But what happens if you’re just being telephoned by the debt collector? Under the FDCPA, a phone collector is required, within five days of the first contact, to send you, in writing, a notice of your right to dispute the debt and request verification. Failure to do so is a violation of the FDCPA that gives you the right to sue the company. And note that every communication from the debt collector should also have what we call the “mini-Miranda” disclosure, that “this communication is from a debt collector and any information you give may be used to collect a debt.”

Require Verification from EVERY Debt Collector

Every debt collector is different, and each one is required by law to provide you the right to dispute the debt and require verification. But by “debt collector” I mean the company that is harassing you, not the individual who happens to be calling you for that company.

Get in the habit of standing up for your rights, starting with the right to seek verification. Debt collectors are looking for the easiest way to make their profit, and standing up for your rights lets them know you won’t be easy.

What to Do Now

You will find information on many issues that come up in debt litigation and materials you can use to defend yourself here at our site. But for much more help, you should consider joining us.