What Is Considered as Proof of a Debt Owed From a Collection Agency?
Creditors may hire or sell an unpaid debt to a collection agency. Debt collectors have the right to pursue outstanding debt, but consumers have rights as well. Before you pay a collection agency, it's paramount that you understand what your rights are and what the collector should give you as proof that you owe the debt in question.
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Fair Debt Collection Practices Act
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The Fair Debt Collection Practices Act protects the rights of debtors when it comes to debt collection. Within five days of contacting you, the debt collector must send you a written notice that details how much you owe and the name of the creditor to whom you owe the money. The letter must also state that the collector is attempting to collect a debt and what steps you can take if you believe you don't owe the debt.
Validation
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Within 30 days of receiving the written notice from the debt collector, you can request that the debt collector validate the debt. This means the debt collector must show proof that you do, in fact, owe that debt. Proof can take the form of the original contract that you signed with the creditor, sales receipts from purchases, credit slips that you signed or a bill from the original creditor that itemizes the charges from the debt. It can also include a copy of the judgment entered against you by the court.
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Fair Credit Reporting Act
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The Fair Credit Reporting Act protects consumers' credit report rights. It also places a responsibility on credit bureaus and the creditors that report to the bureaus, including collection agencies. If a debt collector is unable to validate a debt, the Fair Credit Reporting Act prohibits the debt collector from placing that debt on your credit report. Only accurate information may appear on a credit report. If the collector does try to place an unvalidated debt on your report, you have the right under the act to dispute that debt with the credit bureau and have it removed.
Expired Debts
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Your state's statute of limitation determines how long a debt collector can pursue you for the debt. Once this time period passes, you have no legal obligation to pay the original creditor nor the debt collector. If you receive a notice or phone call from a collection agency that is attempting to collect on an expired debt, you have the right under the Fair Debt Collection Practices Act to send the collector a cease and desist letter. The collector is not allowed to contact you again for payment of that debt.
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References
- Federal Trade Commission; Debt Collection FAQs: A Guide for Consumers; February 2009
- Equifax: FCRA Summary of Rights
- Federal Trade Commission: Fair Debt Collection Practices Act
- Bankrate.com; State Statutes of Limitations on Old Debts; Lucy Lazarony; January 2004
- Bankrate.com; Good Letter Can Silence Debt Collector; Don Taylor; August 2009
