What Constitutes Debt Validation?

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DebtSo I sent a debt collection dispute letter, now what?

Well, now you wait.

In most states, the collector has 2 options:

  • They can cease all collection efforts and drop the issue completely, or,
  • They can get validation and try to collect again.

Unless they validate the debt, including all the fees the collection agency has added on, you don’t have to do anything. It’s in this phase that most debt collectors trip up and make mistakes, which will be to your advantage.

What is Debt Validation?

What does a proper debt validation look like? A proper validation should explain how an account balance got from zero to the amount that is being claimed including all debits, credits, and fees explained. While there is no hard and fast definition of “Validation/Verification” of a debt because it’s always on a case by case basis. It’s like obscenity: You know it when you see it.

Special Case: Texas

Earlier, I emphasized “most” because in the great state of Texas, a debt collector is required conduct an investigation into the debt and provide the results to a consumer within 30 days or less. Debt collectors don’t have the option of ceasing collection efforts and sending the account back to the original creditor. If a collector only ceases their collection efforts and fails to respond in 30 days, they will have just violated the Texas Finance Code 392. It is a violation of the Fair Debt Collection Practices Act and the collector now owes you money! Time to file a lawsuit. (Most collectors don’t know this, and most collectors will violate this statue)

Debt Validation Court Rulings

Spears vs. Brennan

Spears v. Brennan looked at the issue where a creditor provided a signed contract and ruled:

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.

To legally be able to collect again, a collector must provide some explanation of how whatever amount they are asking for came to be. Few collectors will do this properly, which is your chance to educate them on how to do so in court.

Clark v. Capital Credit & Collection Servs., Inc.

Here’s a case, Clark v. Capital Credit & Collection Servs., Inc., where a consumer disputed a medical bill. The collection attorney, hired by the doctor, collected eight pages of itemized charges that included the nature of the charges and balance of the bill. The 9th Circuit of Appeals agreed and stated: “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.”

Chaudhry v. Gallerizzo

Chaudhry v. Gallerizzo is the finding that is most often used by debt collectors. In that case, which was a special situation where pages and pages of detailed validation from the original creditor were already sent to the consumer as validation, the court ruled:

“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.”

If a debt collector sends you eight pages of detailed bills complete with procedures and explanations, barring fraud, they probably have validated the debt. If they haven’t violated any other laws, they have successfully navigated the FDCPA obstacle course and you might want make other arrangements with them. The simple fact of the matter is that these cases are the exception, not the rule.

Debt Validation Is Expensive

A collection agency must spend a lot of time and money to validate a debt. It’s a labor intensive, difficult to automate, and simply unprofitable. Debt collectors make the most money through volume, by quickly liquidating accounts and scaring people into paying them immediately. It isn’t profitable to properly document the debt and review for accuracy.

When a collector receives a file, they receive a name, amount, social security number (sometimes), phone number, and address. That is it. To properly respond to a dispute requires them circle back with original creditor, ask for proof, hope that the creditor has them, tabulate some numbers and send that to the consumer.

You may be surprised to find out that many creditors keep terrible records. Many debt collectors make something up so they can continue to collect or ignore your disputes and use the brute force method of continued calls, letters, and harassment until you give up. In most cases, the collectors are right, people don’t know their rights, and they get away with violating the law.

The proper response to some sort of weak or non-existent validation attempt is a follow up letter stating that what they sent is not validation and you consider the matter to be disputed followed by a lawsuit.Properly validating an account is often an arena for mistakes and is where collectors commonly violate the law.

But they keep calling, refused to get validation, or sent me some bogus validation… what do I do now?

This leads to the next article segment: so a debt collector violated the law… once you get to this point, the tables have effectively been turned, and the collector owes you money and we’ll go over how to collect from the collectors. Stay tuned for the update.

This is the third guest post in a special How to Fight Debt Collectors series on

(Photo: jaytamboli)

{ 19 comments, please add your thoughts now! }

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19 Responses to “What Constitutes Debt Validation?”

  1. zapeta says:

    Once again, tons of great material!

    I’m excited to see part 4!

  2. emma says:

    I’m really curious about the medical debt validation. I’ve gotten a debt collection letter with a dollar figure and the name “Emergency Associates” as the original creditor. Since I had no idea what that meant or who that was (and as I’ve always had good health insurance, so no medical charges beyond copays) I asked for validation. In return they sent me a letter saying HIPPA regulations don’t allow them to access medical information and so they cannot send me anything other than Emergency Associates and the amount owed. Further letters written to them asking for any details such as state, creditor phone number, any way of identifying such a generic sounding creditor – have only returned the same form letter in reply about HIPPA. Weird. It’s not on my credit report, so I’ve just let it go for now.

    But I’m curious about medical debt validation since googling tells me they really can’t release much info for medical debts.

    • Bob says:

      They’re lying, and trying to hide behind HIPAA. Write them back (registered mail with return receipt) and inform them that they have failed to validate, and they must cease and desist any and all collection activities.

  3. daemondust says:

    Great article. I’ve always wondered what would qualify as validation.

  4. Brian says:

    “It is a violation of the Fair Debt Collection Practices Act and the collector now owes you money! Time to file a lawsuit. (Most collectors don’t know this, and most collectors will violate this statue)”

    Wow. Is this really the advice you give out. So many people slam collection agencies and here you are trying to find minor missteps in order to get out of paying a debt that you owe. How about this? Be responsible for yourself and pay your debts. Then you won’t have to deal with debt collectors.

    • Kate says:

      You must be a debt collector or are completely clueless when it comes to debt collection agencies.

    • tino2003 says:

      Yeah you must be collector prying on those how have job problems and unable to pay. These people at some time had excellent credit. Things happen. and you collector will be in the seat one day.

  5. Richard says:

    If the The 9th Circuit of Appeals states “Verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the original creditor is owed…” and the FDCPA (809.a.4) states “…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…” which is right?

  6. Ivan Libya says:

    @Richard, unfortunately, debt validation is not what you and I think should be, or what this article, makes it out to be. I’ve sent a collection agency a request for validation since the amount they claim is about 20k more than what I actually owe. They sent me back a computer print out from their office which just stated the original creditor, my name, my address and this inflated balance and 3 law firms now have said that, that is enough validation. So while we would actually want some paperwork, some contract, some signature, some statements, something showing how they came up with is amount, according to the law and law firms, that’s not what they have to provide.

  7. sharon says:

    I have been researching this issue: note that in PA the appellate Court issued a decision on Feb 2011. wich requires buyers of credit card accounts to obtain documents and other evidence better suited to validate a debt than just the collectors ‘say so’. Computerized records did not qualify for the business record heresay exception.
    See Commonwealth Financial Systems v Smith in PA appellate Court. Also note that with credit cards, if you are proven to have used the card which would require your signature on a billing/ charge than you have obligated yourself to a debt contract.

  8. sharon says:

    Also consider that in a court case for collection the “collector” or “debt buyer” has no personal knowledge of any facts supporting the documents submitted. Without someone to testify as to the accuracy of the documents submitted which is usually a credit card statement with your name on it, was maintained in the ordinary course of business, it is not likely to be deemed trustworthy.

  9. Jeanette says:

    Question, I received a lot of account statements (none with my signature) from a debt collector after sending the DV letter. They sent me an Account Verification statment with some info as well; however, the amount they have as charged off and my current balance do no match the last statement from the OC. Have they validated the debt as there is no matching amounts, affidavit, or anything bearing my original signature?

  10. Judy says:

    I recieved a summons to court on an old debt two month before statue of limitations my credit report report shows this account paid satisfactorily as of Jan 15 2012 will judge acccept this

  11. GG says:

    Question…When I first arrived in this city (Texas), I rented an apt with a 6 month lease to allow time to look for a house to buy. My interest in the apt was based on the assurance of safety by the manager, comments she made implying that she lived on property, and that the fenced property with an entry-security electronic gate was kept engaged. After moving in, I found that the gate was quite frequently left open by management; and due to tenants and/or their guests not having a card to enter, cars would bump the gate to force entry and the gate would be open & inoperable for days at a time. On several evenings a vagrant entered the open gate, hanging out in the courtyard…which alarmed my young daughter and myself when we approached the mailboxes. I reported it to the mgr and she blew it off stating no one else had mentioned it. When I was awakened by the vagrant setting-off car alarms while wondering around the parking area below my apt, I called the Management Company & complained. The manager was extremely angry about my call making my life miserable for the balance of my lease such as reporting monthly lease pymts as late; stating that I didn’t give 30 day notice to vacate apt at the end of my lease; not receiving or returning phone calls. After I moved out, she sent me a bill charging me rent until the new tenant moved-in along with damages charges that I was not resp. for. I called her several times, finally speaking with her about the charges;she stated she had already turned it over to a collection agency and reported it to the credit bureau which was done within 30 days of my departure; not giving me time to even respond or negotiate. Is there a time frame in Texas that allows for at least 30 days to elapse before a debt can be sent for collections, etc.? Shortly after this occurance, the apts were sold and the original management co has no interest in assisting me. She now works for the new management company.

  12. kay says:

    i asked for debt validation on a time-barred debt 6 months ago and today i received in the mail statements which only show 6 months activity. the activity is only the amount owed and no payments and no purchases. it just shows the balance going up each month because of late fee because i did not pay the bill. is this sufficient for debt validation?

  13. kay says:

    I received a debt validation from a collector, but it was only 6 months worth and all it showed was that since august 2008 only one payment was made my me. Do they need to provide me with all the charges that I made on that card and also don’t they need to provide me a written contract between and the original creditor. also, I live in Delaware and this is past the SOL. How do I respond to them.

  14. Lisa henricks says:

    I’m curious if just a statement from the original creditor qualifies as validation.

  15. Ben says:

    I have an out of country company sending me faxes and emails telling me I owe them $500 for a listing made on a National Directory. I asked for verification and they sent me a recording with alledgey me answering “Yes” twice. The person is not me. Then they sent me a call log showing someone phoned my phone number.
    That was thier verificatin. In my business I do not need national exposure. I do not and never have bougt that type of advertising.
    I disputed this with them and now are threating to sue me. What can I do?

  16. Tommy Z says:

    What do you do when you dispute a debt and they mail back validation that just shows some account statement or invoice that claims you owe money? If you believe the invoice to be bogus, what then?

    Can the collector still try to collect? If yes, then is it even possible to make them stop attempting to collect?

    Regardless if they are trying to collect or not – can the collector make a bad mark on your credit report? If yes, what should the consumer do? Is the burden and expense on the consumer to file a lawsuit to protest the bogus invoice?

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