What Happens When a Credit Card Company Can't Validate the Debt to the Consumer?
If you are being harassed by a creditor for a debt that you don't think you owe, you have the right to demand proof of its legitimacy. There are several federal laws that require either creditors or credit bureaus to prove that you actually owe the debt. If they cannot, any negative information that is incorrect must be immediately removed from your credit report. The credit bureau is required by the federal Fair Credit Reporting Act law to investigate your claim that a debt is not valid. According to the federal Fair Debt Collection Practices act, if a collection agency contacts you, it must send you a validation letter within five days of the original contact. This letter must include the name of the original creditor, the amount you allegedly owe, and instructions for disputing the debt. If you dispute the debt, the debt collector must end collection activity while it investigates your claim. The Fair Credit Reporting Act allows credit bureaus to refuse to investigate disputes that it considers to be "frivolous". You can minimize your chances of having your validation request considered "frivolous" if you can provide documentation of your claim that you don't owe the debt. If you can, send copies (not originals) of canceled checks and any correspondence that might help your case.
If you receive a bill or a collection notice for a debt that you do not think you owe, don't ignore it. If you fail to challenge the debt, your credit report and score can be damaged, and it may take some time before you can get the damaging information removed. Make sure to speak to Jacoby & Jacoby either online or call us at 631-289-4600 to schedule a FREE consultation. We can review your individual situation and go over all your options.