How to Dispute Collection Agencies
Consumers sometimes find themselves in debt. Creditors often hire collection agencies to collect the debt on their behalf or they sell the debt to the collection agency outright. These agencies then come after you for the balance owed plus accrued interest. Still, just because someone says you owe a debt, it doesn't necessarily mean that you do. Errors do occur, and under the Fair Debt Collection Practices Act (FDCPA), you have the right to dispute any bill from a collection agency.
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Instructions
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Write a debt validation (DV) letter to the collection agency requesting that it provide proof of the alleged debt. The FDCPA requires collectors to send to you, in writing, documentation that the debt is both yours and that the amount owed is accurate. This can be a copy of sales receipts, itemized bills from the original creditor or a signed contract, if applicable.
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Send the DV letter to the collection agency within 30 days of receiving the initial collection notice. Send the letter by certified mail, return receipt requested. If you don't send the letter within this time frame, you waive your right to request validation, so never ignore a collection notice.
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Wait to receive debt validation from the collection agency. The agency isn't required to respond within a specific time frame, but until it validates the debt, the collection agency is not allowed to contact you further in an attempt to collect the debt nor is it allowed to take any other action against you. Once the debt is validated however, it may resume collection activities.
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Order a copy of your credit report while awaiting debt validation. Under the Fair and Accurate Credit Transaction Act (FACTA), consumers are entitled to one free credit report each year from the three major bureaus: Equifax, Experian and TransUnion. You can order the report from the credit bureau's website, by phone or mail. You can also order it from the website established by Congress specifically for this purpose: www.annualcreditreport.com.
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Dispute any erroneous debts on your credit report. Under the Fair Credit Reporting Act (FCRA), only accurate and verifiable data may appear on your report. The act prohibits debt collectors from reporting an unvalidated debt to the credit bureaus. If they do, you have the right to have that information removed. You can file a dispute online at the bureau's website, by mail or phone. By law, the bureau has up to 30 days to resolve your dispute and make corrections.
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Tips & Warnings
Watch out for zombie debt, which is debt that beyond your state's statute of limitations for collection. Collection agencies buy old debt and try to get you to pay it even though you are no longer legally responsible for it.
Never check your credit report or initiate a dispute using a public or shared computer. If you do, you run the risk of becoming a victim of identity theft.
References
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