What Is Debt?
A Debt is several amounts of money borrowed by another party (customer). Debt is used by many individuals as a reason for making large purchases that they could not afford normally. Debts allow borrowing money under the condition that the borrower will pay it back later with interest rate. The common forms of debt are loans, mortgages, auto loans, credit cards, personal loans, etc.
What Is a Debt Validation Letter?
It is not normal to have a mail, phone call or notice from a collection agency looking for payment. Whenever a consumer does not repay bills, debts, or other debt obligations in a timely manner, the original creditor can try to collect it. Or they can also turn to a third-party debt collector on the lender’s behalf. The debt collector is considered an expert in debt collection. Often recovering companies may ask a consumer to return loans that are not owed to them or that are beyond the laws. The Debt validation letters ask a form debt collection agency to verify the debt which debt collector wants to borrow from customers.
A debt validation letter is a valuable tool during the debt collection process. With the help of a debt validation letter, customers can verify that they are dealing with a legitimate debt collector. A debt validation letter is a great option to use if you want to verify that you’re dealing with a right debt collection agency.
How Debt Validation Letter Work?
Normally Debt validation letter is sent by the customer to a debt collection agency. A debt collector has to provide written proof of debt that borrowers owe within five days of initially contacting. If the consumer fails to dispute the debt at that time, the debt collector is fully entitled to consider the debt valid. This written notice must have the name of the original creditor, the amount that borrowers owe, notice that they are legally able to dispute the debt.
How customers can request Verification on illegitimate Debt?
If customers feel that they are facing a scammer or illegitimate debt then the customer should send a letter to the debt collector and ask them to verify the debt. Debts collectors can’t force to pay for a debt that consumer doesn't legitimate owe. A sample letter CFPB provides to customers is an outline of exactly what is being asked. The creditor has 30 days to conduct its investigation and send the debtor's conclusion. If the creditor does not withdraw the suspected debtor within thirty 30 days, the collection procedure becomes invalid.
How to Fight with Debt Collection Scam?
Debt collection scams are a major concern for all consumers. The consumer can file a complaint with the CFPB (Consumer Financial Protection Bureau) or at the office of the Attorney General of their state. Reporting to scammers becomes important so that you prevent them from trying to get illegitimate loans from other consumers. As a customer, it’s important to be alert and has knowledge so that you can avoid dealing with scammers.
