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?

After you get approved for the debt validation program, a case manager will do a thorough credit report analysis. The case managers have experience and expertise in this area. This part of the program is designed to find potential inaccuracies and critical information that does not belong.

With a debt validation program two different stages need to be addressed:

A. the actual debt collection companies need to be disputed (debt validation)

B. the credit report needs to illustrate accurate and verifiable information 

After the initial credit report analysis – a case manager will start challenging and disputing each debt enrolled into the program. When the debt collection agency is not able to prove that they have 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!  

Sometimes this concept can be difficult to grasp.

Think about if you get a speeding ticket; yes you were speeding, but somehow your lawyer gets it dismissed! What the lawyer is essentially doing is; checking for errors, and if any arise your ticket gets dismissed. If the police officer wrote the wrong date or license plate number on the ticket – ticket dismissed! At court, the lawyer may request to review certain required documents – such as what type of instrument was used to calibrate the speed, and if the police officer can’t provide these required documents – the ticket gets dismissed. With debt validation, the concept is similar in nature.

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

A debt validation program can be the most cost-effective debt relief solution. We recommend starting with debt validation if qualified, rather than having to resort to a debt settlement program. 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. Keep in mind, 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 cheap 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.  

Google “debt collection company scams” or “bank fraud,” and you will find there is no shortage of bank and debt collection fraud and abuse. 

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 could be a good chance that 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 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, by calling 866-376-9846 now.

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.”

Then in 2009 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

Invalidating a debt can be an option for a consumer that has debt collection accounts. Credit Card Relief Programs are also available at Golden Financial Services.
600 Palm Ave #221
Imperial Beach, ca
Phone: 866-376-9846

Terry received debt relief assistance from Golden Financial Services.
Client Review
Date Published: 09/23/2014
5 / 5 stars