Fair Debt Collection Practices Act - FDCPA - Debt Validation Letter
A Debt Validation Letter doesn’t just establish whether you owe the debt, but to whom you owe it and how much. Many debt collection law firms will add fees and interest to the debts they collect, and send letters with unfamiliar amounts. Your validation letter will force them to account for all the money they are demanding and show how they arrived at the new figure. Law firms may try not to include these calculations because they don’t want you to see how much they are adding to the debt in legal fees.
The more information you can receive about your account, the more apt they are to make errors and provide conflicting information that can help you demonstrate the foreclosing party's lack of authority or standing. Many homeowners who send a Debt Validation Letter will often not receive the information requested but on occasion receive information that raises further issues.
What is the 'Fair Debt Collection Practices Act - FDCPA'?
According to The Fair Debt Collection Practices Act (FDCPA), a debt collector must send you written validation of debt within five days of contacting you. If they don't, you can send them a letter to request a validation of debt.
The FTC outlines the contents of the letter that you should receive:
- How much you owe
- Who you owe
- Statement giving you 30 days to dispute the debt
- Statement that, if you dispute the debt in the given 30 day time frame, the collector will mail you the verification of the debt or a copy of the judgement against you
- Statement that the collector will provide the name and address of the original creditor (if different from the current creditor) if you write a request for that within 30 days
Note: If you dispute the debt within 30 days, the debt collector must cease attempts to collect until they've mailed you verification of the debt or a copy of the judgement to you. If you don't dispute the debt, the debt collector can assume that you owe and continue attempts to collect – but that is not equal to admitting that you owe the debt.
Why Send a Debt Validation Letter During Foreclosure?
This law gives you the opportunity to identify and get more clarification on those violations as well as learn other key details that you can use to either get caught up on your mortgage or point out why the mortgagor has no right to pursue foreclosure against your home. FDCPA can be used to reveal information about your account that you might not have had access to before being notified of the foreclosure.
- If you owe but can't afford to pay the debt, you'll lose negotiating power.
- If you owe and intend to repay, you should first confirm that the debt collector is legitimate and is legitimately who you should pay.
- If you owe but the debt has already surpassed the statute of limitations, confirming that it's yours could restart the clock on the statute of limitations.
- If you're not sure you owe, it could be a mistake and you'll want to know for sure before you agree to repay.
- If you're sure you don't owe, it could be a mistake or even an instance of fraud.