Tuesday, May 14, 2013

What Is A Validation Demand Letter?

If you are going to work on repairing your credit, you really need to know what a validation letter is, what is requested/demanded, who it goes to and why you can use this.  Many credit repair companies, and people who work on repairing their credit themselves, don't use the validation letter, and so, are not as successful at improving their credit report.

The law that gives you the right to demand validation is the Fair Debt Collection Practices Act (FDCPA).  It is a federal law.  The exact section of the law that requires them to validate when you request it is 15 USC 1692g Sec.809(b).  This law says:  "If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) of this section that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector. Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt or request the name and address of the original creditor." 

You will notice that the law uses the word "Verification" but it actually tells them that they have to send you the copy of that Verification - the PROOF, which is the Validation, of the alleged debt.  Now, I know it says the 30 day period in there.  But this is when they obey the law and notify you within the first 5 days of initiating collection activity, that they are going to be trying to squeeze money out of you that doesn't belong to them and you have the right to dispute it.  You will also see that it says "verification of the debt."  You will notice that they don't want to send you the proof of the alleged debt, they only want to verify the name, address, original creditor info and amount, to you.  They don't like you to require them to send proof of the alleged debt because they can't.  They don't have a valid contract with you. 

Now, this law applies to all 3rd party collectors.  It does not apply to original creditors. For original creditors, many states have fair debt collection laws that mirror the FDCPA but also include original creditors.  I just love when my clients are in one of those states.  (I did another post sometime back about disputing with original creditors.  Look for it on my list of posts on the right side bar if you need help with them).  Now, at the end of this post, I'll touch more on this law above and clarify a bit more on it. 

You have the right to demand validation from your alleged collectors.  Most of the time you will know who they are because they report negative credit against you on your credit report.  Occasionally you will just get phone calls and letters in the mail from some obnoxious collection company that you don't see on your credit report.  I should warn you, though they might not be on one of the big 3, TransUnion, Experian, and Equifax, they might be reporting against you on Innovis, another big credit bureau that enjoys a lot of activity from collection agencies, and who hardly ever gets made aware of to unsuspecting consumers like you and me, so they can secretly destroy your credit without too much notice.

Validation is NOT Verification, though many collection companies love to mix the two up.  They do this for their convenience.  Its their little scapegoat method of avoiding the production of validation, which they cannot fully do.  You know when they're pulling this little scam, trying to convince you that they're right, you're not, you have to pay them.  Their response letters to your specific demand for validation will say something to the effect of, "We contacted the original creditor and they verified that the name, address, account number and amount we are reporting is correct." I didn't see the word "Validation" in that statement, did you?

Validation is the production of PROOF! Physical, paper, PROOF! Sometimes its an audio recording, you know, the crap that they insist on doing for "Quality Assurance?'  Validation is producing a contract between you and them.  You should want to see both sides of it, front and back, to prove there were no alterations rendering it void, after you signed it.  An alteration can be any markings, any staple marks, something that changed the piece of paper in any minute way after it was signed.  But, if they are a 3rd party collector, you don't have a contract with them.  They can't produce one because they buy alleged bad debts, they don't originate them.  

3rd party collectors should also prove that they have the right to collect on the alleged debt.  They should show the proof that they purchased it or were assigned it.  There are a number of states that require them to be licensed or bonded or both, to do any collection business there.  In fact, in Illinois, not only do they have to be licensed in the state, they have to be licensed in Chicago for any alleged debts they want to extort, um, attempt to collect on for Chicago residents.

Collectors also should provide validation in the form of a complete transaction history.  Every charge, every payment, every interest charge or other charges and fees for the entire life of the alleged debt.  There are case laws backing this up.  Another big thing that is required for validation is whether or not the alleged debt is Time-Barred.  This means it is outside the Statute of Limitations for your state.  This is a number of years that varies from state to state. It can be as little as 3 years to as long as 15 - which is absolutely ridiculous, I have to add.  This is a great way to make them go away.

I include a lot of things in my letters demanding validation. I tell them I want to see a contract between me and them. I want to see the front and back of it.  I want to see the full accounting and I put case law in there.  I want to see the documentation giving them the right to collect on the alleged debt. If the client is in a state that requires licensing/bonding, I tell them I want to see that. (I actually look them up every time for this, so that I can throw it in their faces if I see they are not, or they have been spanked by that state already).  I tell them I want them to prove that everything they are reporting on the credit reports is 100% accurate. I want them to prove the alleged debt is not outside the statute of limitations for my state.  (When I've checked and it is, I throw that at them too)!

Now, I actually get more intense on my letters.  I tell them they need to prove that they have a valid contract (at least the 4 basic elements) and that the original creditor had a valid contract, (at least the 4 basic elements), and I want to see that original contract, front and back.  I want them to prove there was no fraud committed.  I want them to provide the source of the funds that the original creditor used to actually lend the money that funded the credit.  (Oh, wait!  They don't lend money do they? They lend what is called "Credit Money" and that's illegal!  They create it out of thin air).

Towards the end of the letter I add a "Limited Cease and Desist" and a call to action.  The call to action is to prove it or remove it immediately. Prove it by providing me everything I requested, in writing, and not some cheapo, dummied up computer print out or hearsay typed onto the letter saying "we investigated and yep, we're doing everything accurately and you owe us".  The real deal.  The actual original or copies of the original documentation. 

You should be including most of these things in your letters to the 3rd party collectors. At the very least, they should be providing the contract between you and them, the contract between you and the original creditor, the full accounting, the proof they have the right to collect, proof they are accurately reporting to the bureaus, and proof the alleged debt is within your state's Statute of Limitations.   There are only 2-3 things in this list that they can lawfully provide that they can send you.  They can make claims that they validated fully, but that's a lie.  The only things they can really produce is the original contract (which is not a valid contract because the original creditors ALL commit fraud), their proof that they have the right to collect (which is paper proof for the game of collection but according to 73 AmJur 2nd Ed. Sect. 90, they have no right to collect anyway if they were not on the original valid contract), and whether or not the alleged debt is Time-Barred.

Now back to the FDCPA 15 USC 1692g Sect 809 (b).  This law mentions the 30 day period.  But, what if you are demanding validation after that original 30 day period, does it apply?  Yep, it sure does.  The 30 day period applies to you when they send you the original "Dunning Letter" within 5 days of starting to collect on the alleged account.  But, if you demand validation after that point, the law still applies.  They are required by law to produce the validation or cease collection activity.  Do they have to produce the validation?  Nope, but then, they also cannot resume collection activity until they do.  This law protects you!

Now, when you send out your demand for validation, you need to send it Certified Mail with Return Receipt. Costs a little over $6 for each letter but it is worth it, oh man, is it worth it.  If you get sued and they didn't validate, and you have the proof you demanded it, you can beat them in court.  That is proof of their violation of Federal Law!  Many times you will get a response back saying they will be removing it from all the credit bureaus. Love those!  Sometimes they give other stupid responses letting you know that they would rather continue to violate the law than obey it, because extorting money from people is their game and they don't stop without a fight.

To find out how to respond to them, look at the previous posts I wrote about a month or two ago I think, that tells how to fight back in your follow up letter.  Oh, one more thing, as soon as you get the green card back that proves they received your demand for validation, dispute with the bureaus.  It is against the law for them to verify (its considered collection activity) without first validating.  Many will come off by using this procedure - demand validation first, hit the bureaus with disputes second.  If they verify, they've just broken another law!

If you don't want to have to write all the letters yourself and would like me to help, please email or call me.  I love the game. I love helping you beat them! My email and phone number are up at the top, on the right hand side.  I answer emails and answer my phones.  I write letters for people in all 50 states.  The letters I write are not the junky stuff you find on the internet and they are not the form crap that the biggie credit law firms use to drag out the process (costing you more), and that don't work effectively all the time.  (See my post on credit law firms!)  I write great letters that get results! I'd love to write some for you too!


  1. Hello Shannon,
    I must say that finding your blog has been a blessing and you cannot imagine how much I appreciate the knowledge you are sharing. Thank you
    I do have a question, after running into some trouble a few years back I am in the process of disputing paid and released tax liens from my state of Florida and a few collections. They will not budge and I will keep fighting till the end but, is it legal for a bank to charge me for additional statements in order to validate a debt? They did not provide the full accounting and only sent 3 months of statements.
    Again I THANK YOU for the information you provide.

    1. Hi Rosy,

      You're very welcome for the information. Regarding whether or not a bank can charge for additional statements in order to validate a debt - I'm not sure I know that the FDCPA does not allow it but that pertains to 3rd party collectors.

      You would need to check the Florida state FDCPA and the Florida Consumer Collection Practices Act and see if it applies to original creditors on the state level.

      Regarding the tax liens, NEVER admit they are yours, paid or unpaid. Don't tell the bureaus they are paid or they will keep them on for 7 years from the date paid. Fight them with a dispute regarding they are falsely claiming the court or recorder verified when that is a blatant lie. Give them the statute for your state for Taxpayer Confidentiality and let them know that it is 100% illegal for a taxpayer's information to be published on credit reports.


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