Step 1: Disputing the Debt

Pursuant to the Fair Debt Collection Practices Act (“FDCPA”), a debt collector is required to send (within 5 days of its initial communication with the consumer) written notice to the consumer notifying the consumer of the debt and the consumer’s ability to dispute owing, and request validation of, the debt.  Section 1692g(a) of the FDCPA specifies that the notice must identify:

(1) the amount of the debt;

(2) the name of the creditor to whom the debt is owed;

(3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector;

(4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and

(5) a statement that, upon the consumer’s written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

This required notice is often referred to as the “validation notice.”

Under § 1692g(b), “[i]f the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a)” that the debt is disputed or 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.

As set forth above, the consumer must dispute the debt, in writing, within 30 days of receipt of the 1692g notice.  Upon receipt of a consumer’s timely dispute letter, the debt collector must stop all collection activities until it can verify the debt.  Importantly, once the consumer disputes owing the debt, debt collection law firms cannot initiate collection lawsuits until the debt is verified/validated.

The dispute/validation process is intended to notify debt collectors that they are trying to collect debt from the wrong person or attempting to collect debt which the consumer has already paid.  If the consumer does not dispute owing the debt within the 30 day time period, the debt collection company may assume the debt is valid.

Disputing the debt and requesting validation should be the first thing a consumer does upon receipt of an initial debt collection letter from a debt collector. Depending on how the debt collection company obtained the account, they may be unable to obtain validation and will cease all collection activities.