What is debt validation? (Synonyms: debt verification, debt dispute, debt defense & credit card validation)

Debt validation is a consumer’s legal right to dispute or challenge a debt. If a third party debt collector is unable to provide the documentation required of it to prove that it is lawfully attempting to collect a debt from a consumer, then such debt collector is unable to collect the debt from the consumer legally. In situations such as this, while the consumer is still legally obligated to pay the debt, the third party debt collector who was unable to verify the debt often ceases attempting to collect the debt. 

How does a debt validation program work?

A debt validation program can be the least expensive route to address debt and credit issues. 

STAGE ONE: Credit reports need to illustrate accurate and verifiable information. The analytics department will help you review, identify and deal with all erroneous and derogatory marks that could be negatively affecting your credit score–ensuring mistakes are corrected.

STAGE TWO: After the initial credit report analysis – a case manager will start challenging and disputing each debt enrolled into the program. If the debt collection agency can’t prove they have the legal authority to collect on a particular debt – the debt becomes legally uncollectible. In other words, an uncollectible debt is one that–you don’t have to pay.  

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Best Debt Validation Program in the Nation

STAGE THREE: You get assigned to a “Violation’s Team.” Their purpose is to provide training and education to you regarding consumer rights, federal laws, and statutes. You learn how to defend yourself by using these laws (aimed at protecting consumers from unfair and illegal collection practices). Your Violations Team will give you tools and show you how to use them to protect yourself from harassment and other illegal collection practices. 

STAGE FOUR: RESULTS:  This is the final step in a debt validation program. After the validation process is completed, your account manager will work with you on identifying any remaining items still negatively affecting your credit score. Your case manager will then get together with a credit expert in the analytics department to update your file and determine if any “next steps” are needed to take, ultimately working toward a brighter and healthier financial future. 

Sometimes this concept can be difficult to grasp. (Speeding Ticket Analogy)

You may have been speeding; but, a competent lawyer can still get it dismissed.


A lawyer will challenge the police officer…

What the lawyer is essentially doing is checking for errors and missing documentation. 

A police officer must maintain particular records, documentation and accurate information, by law, when giving someone a speeding ticket. 

If the police officer disobeys the required procedures and protocols, a lawyer can use these breaches, inaccuracies, and flaws to get the speeding ticket dismissed; even though in reality you may have been speeding. 

Examples of how a speeding ticket can be dismissed. 

If the police officer wrote the wrong date or license plate number on the ticket–the ticket gets DISMISSED under the court of law.

At court, the lawyer may request to review certain required documents–such as; the documentation illustrating what type of instrument was used to calibrate the speed at which they are alleging you were doing, and if the police officer can’t provide these required legal documents–the ticket gets DISMISSED.

Yeah, that’s right. Just as if you weren’t speeding at all. No punishment, fine or violation on your record! Just a clean slate. 

Debt validation is similar in nature — to the speeding ticket analogy.

Third party debt collection companies must abide by several federal laws including the Credit Card Act and Fair Debt Collection Practices Act, which you can read about here.

A debt validation program can be the most cost-effective debt relief option.

We recommend starting with debt validation if qualified, rather than having to resort to a debt settlement program.

Debt Settlement VS. Debt Validation 

If a debt is validated and proven to be a legally collectible debt – at that point a debt settlement approach may be the next best option. 

People are amazed at how many times the debt collection company can’t validate and verify a debt. 

How is debt validation possible? Are the banks this careless?

When a debt collection agency purchases debt from the original creditors (credit card companies and banks), often these debts are sold with inaccurate records, missing documentation and even falsified records. 

Due to the bank’s inability to maintain appropriate records, is one of the reasons why debt collection companies can purchase debt for such a low price–sometimes for as low as 5-cents on the dollar.

Most debtors are unaware of their consumer rights and the federal laws that regulate third-party debt collection companies, and therefore, they often become victims of predatory lenders and abusive debt collectors.  

Bank and Debt Collection Company Fraud, how often does it occur?

Google “debt collection company scams” or “bank fraud,” and you will find there is no shortage of bank and debt collection fraud and abuse. Check out this recent article; CHASE BANK JUST BUSTED FOR FRAUD — CHASE MUST IMMEDIATELY STOP COLLECTION ON OVER 500,000 CREDIT CARD ACCOUNTS

Why doesn’t everyone do debt validation?

Most people won’t challenge a debt – they are scared after an abusive debt collector threatens to sue them. They take out their wallet and pay, not knowing that if they disputed the debt, there is a chance the debt collection company would not be able to verify and validate it as a legally collectible debt. 

The following is an example illustrating a debt collection company agreeing to stop collection on the debt (original creditor: Citibank, Sears), and to instruct the three credit reporting agencies to delete the referenced account from the consumer’s credit profile. 

Example debt validation letter, to eliminate a Sears/Citibank credit card

Example: Debt Validation Letter/Proof (Creditor is: Midland Funding, formerly owned by Citibank/Sears)

CALL +1 (866) 376-9846, and we can assist you in finding the best debt relief program in your state to resolve your debt. See if you qualify for debt validation! Take advantage of a FREE CONSULTATION with an experienced debt specialist. Find out if debt settlement, consumer credit counseling or debt validation is best for your situation. 

Take a look at this recent publication from the Center for Responsible Lending

It said the following,” the agreements between debt sellers (major banks) and debt buyers (third-party debt collection companies) often dictate that accounts are sold “as is” with limited information and documentation for the accounts.  As a result, unreliable records are used to collect or bring suits on debts that cannot be substantiated, are inaccurate in amount, or may not be owed by the consumer.”

Take a look at this recent publication from the FTC

Another report illustrated that “the FTC came to the conclusion that the information received by debt buyers (debt collection companies) is frequently “inadequate and results in efforts to collect from the wrong person or to collect the wrong balance and payment. Account documentation, when provided, may be filled with wrong and inaccurate information, and that the provision of account documents could not be depended on to determine the outstanding balance of an account or that the account represented a valid and collectible amount.”

READ MORE HERE, at the Source: http://www.responsiblelending.org/state-of-lending/reports/11-Debt-Collection.pdf, The Center for Responsible Lending, 02/02/2015

If your creditors do validate the debt, and it must be paid, but you can’t afford to pay it in full – debt settlement services would be your next best option. Learn about debt settlement services.

Golden Financial Services and our partner company’s can assist you with all types of unsecured debt including credit cards, medical bills, and unsecured personal loans. Call 1-866-376-9846 to learn more about consumer credit counseling, debt settlement, debt consolidation and debt validation