Collection Agency - Validating The Amount?

Question

I was told that a collection agency would need to, if challenged regarding the legitimacy of an amount they are pursuing, validate that the amount is actually due. My question is, who is the final arbitrator on what is or is not valid?

We all know that different parties could look at the same paperwork and reach different conclusions. If there is doubt, or incomplete paperwork, shouldn't the consumer get the benefit of the doubt? Do the credit agencies and courts look carefully at the paperwork gathered by collection agencies?

A related issue is, my credit is currently superb, if some collection agency comes along and accuses me of being a deadbeat on an under $100 amount, isn’t that quite a minor thing? Surely my credit would not be completely ruined by something so trivial.

Also, I can't believe the collection agency is coming at me so hot and heavy over a minor dollar amount. Are they bluffing? Doesn't it cost them money to go to court, et cetera?

Answer 1

Wow, lots of questions. If I don't cover them all email me. :)



The final arbitrator is the judge.



When you "validate" a debt, you are doing the same as a "discovery" in court lingo.....you are telling the plaintiff (creditor) to produce whatever evidence he has to support his case.



You can examine what he has, and if it's not complete or you think you can dispute it. If you can prove you don't owe this debt, or it's not yours, then file a small claims suit against them for violation of the Fair Credit Reporting Act, saying they are posting unvalidated reports to your history. If you win, they must pay you $1000 plus any damages their report may have caused.



I did this recently and won $1200 because the collection agency wanted to be a jerk about it.



Credit agencies do NOT investigate anything. All they will do is contact the creditor and ask if the debt is valid. If the creditor says it is, then the report stays. By law that is all they are required to do.



The courts will look at this in the same manner as any other trial. In small claims court, it's not as formal and since lawyers are not generally allowed you don't have to worry as much about technicalities. The judge isn't stupid...if it's obvious it's your debt then don't waste your time over minor errors in the paperwork.



To a collection agency, a buck is a buck. But they work on commission, and the agent's supervisor isn't going to be happy with someone who spends 5 hours trying to collect a $100 debt, when the agency only gets $30 from it. Expect a couple of letters, maybe a phone call. They won't sue for this small of an amount. They will be satisfied to just ruin your credit report.

Answer 2

Most items disputed on a credit report don't make it to arbitration. Ask for the documentation that supposedly entered you into this debt and verify that it was actually you. Yes, consumers do get the benefit of the doubt in most cases, as when a company can't produce the documentation showing where you agreed to enter into the debt (the credit agency will generally take the item off of your credit report). And yes, a $100 collection item will ruin your credit if left on there and shown as not paid, especially if the item is for something trivial such as a cell phone or credit card (medical bills don't held against you as often). If the collection agency has told you that they will take you to court over an item, then they have to be serious according to FDCPA (this only applies to third-party collectors) and it won't cost them any money to go to court if you truly owe the bill, you'll be charged with all legal fees and court costs in the end.

Answer 3

Here is a little known secret - you DO NOT have to deal with collection agencies - by law. All you need to do when getting a letter from a collection agency is state the following - by letter and signed with all names and account numbers noted:



My debt is not with you, it is with (fill in the blank). You are hereby notified that you may not contact me in any way, shape or form regarding this debt from this day forward.



Send it certified mail, return receipt requested.



If you respond to a collection agency in any way other than that from the first contact, you have in actuality validated their efforts to collect the funds, whether they are legitimate or not.

Answer 4

Yes they do..IF you ask them in writing (certified mail) within 30 days of them sending you something in the mail. They have to validate the alledged debt..also always call it the alledged debt..never admit it's your...also never speak to them on the phone...have everything in writing. Also pull your own credit to find out if it's posted there..use myfico and use the discount code "CPPSAVINGS"..it will save you 20% per pull $11.96. If they have reported to and of the credit reporting agencies you need to dispute it asap after the collection agency has revieved your cerifeid letter. You can also go to ceditboards.com to get copies of the letter's you'll need.



Good Luck

Answer 5

hello, rhather than post all the info here I'll post the links to it all:



http://credit-cards.ebookorama.com/



check out the faq there



and also perhaps here:



http://finance.ebookorama.com/



good luck!