A Debt Collector Has to Give You Key Details About the Debt
It’s often a good idea to pay off your debt as quickly as possible. But if a debt collector contacts you out of the blue, it’s worth taking a pause.
That’s because scammers sometimes pretend to be debt collectors, asking for money they say you owe. You should wait for a validation notice, since debt collectors are required to send it when they first contact you or within five days of doing so. Review it before determining your next steps.
What a debt collector has to tell you
A validation notice is a document that contains information about the debt in question. It will show you the remaining balance, itemized interest and fees and the creditor’s name. This same notice will also let you know how to dispute the debt. You have up to 30 days to file a dispute in writing.
The notice itself does not prove that the claim is correct. You can still challenge the debt, and the Consumer Financial Protection Bureau (CFPB) offers several resources that can help, including instructions on how to submit a complaint.
You can also review the CFPB’s model notice so you can see what a validation letter is supposed to look like.
Red flags that mean you shouldn’t pay yet
The first step is to review the validation letter and make sure the information makes sense. The amount, creditor and other details should all look accurate.
Some debt collection notices are legitimate, but they can also be sent for debt that you have already paid off. This can happen in error, but it can also be from a scammer. There’s also the possibility of debt being accurate, but also being due to identity theft. You are not legally responsible for debt incurred due to identity theft.
There are also red flags you can watch for that point to a scammer. The Federal Trade Commission (FTC) recommends looking out for fake collectors who threaten you, or those who refuse to give you a mailing address or phone number.
What to do if the debt looks wrong
When you file a written dispute within 30 days, a debt collector must stop all collection activity. But they can restart after verification responding to the dispute.
You can still dispute debt after 30 days, but you won’t have as many legal protections outlined by the CFPB. Be sure to report activity to the FTC’s ReportFraud.gov site if identity theft was involved. The CFPB’s complaint process is optimal if a debt collector is using unlawful conduct to collect dues, even if the debt is legitimate.
