Debt Validation

Debt Validation
  • Ask for debt validation when a collection agent attempts to collect a debt.
  • If a creditor cannot verify a debt it may not collect the debt.
  • Send a debt validation letter immediately, because there is a 30-day time limit.

What is debt validation and how do I do it? Also, how do I know if a debt is properly validated?

Ask for a debt validation when someone attempts to collect an old debt from you.

Collection agents are bound by federal and state laws concerning the collection of debt. Original creditors must also follow debt collection rules when attempting to collect a delinquent debt. The Fair Debt Collection Practices Act (FDCPA) and the Fair Credit Reporting Act (FCRA) are key federal laws regarding these issues. Many states have consumer protection laws that overlap with both acts, and have stricter rules protecting consumers.

Wise Advice The FDCPA and FTC use the word verify to describe this process. and other personal finance Web sites call it validate or validation. These terms refer to the same process and are interchangeable.

Assignment of Debt

Most consumer debt contracts give the original and subsequent creditors the right to assign the debt. Assignment is legalese for “sell the rights to the contract.” Collection agents buy most debts for 5 to 50 cents on the dollar. The collection agent has the right to collect the entire balance due plus interest, but does not necessarily expect to collect the full amount. State laws set the interest and fee rules collection agents can tack onto a debt.

Wise Advice Consumers with old delinquent debt often ask how their state statutes of limitation may impact their rights. See the resources Statute of Limitations Laws by State and How to Tell Which Statute of Limitations Applies to Your Situation to learn more about this issue.

How to Ask For a Debt Validation

If a collection agent demands payment of a debt a consumer does not owe, or more than they owe, the consumer can dispute their responsibility for the debt or the validity of the amount. The formal terms for this process are “debt verification” or “debt validation.”

A consumer should, as a matter of course, validate a debt when a collection agent attempts to collect the debt. Why? Just because a voice on the telephone claims someone owes the collection agent money does not necessarily mean the collection agent has the right to collect the debt, or that the debt is even owed. If a collection agent cannot validate the debt, it may not collect the debt or report it to the consumer credit reporting agencies. A collection agent is stopped dead in its tracks if it cannot validate a debt.

A disputed debt could be:

  • One already paid
  • One you do not owe
  • An amount different from what is demanded
  • Related to a hospital stay. If you informed the hospital you could not pay for the care, the hospital should have considered payment under its charitable care policy.
  • A time-barred collection (see the statute of limitations Quick Tip above)
  • One discharged in bankruptcy
Good Idea Is it worth your time to validate a debt? Yes! According to a 2013 FTC study, col­lectors could not verify nearly 50% of disputed debts. The least likely accounts to be validat­ed are med­ical, tele­com­munica­tions, utility debts, and accounts more than 6 years old.

Here is a template of a debt validation letter to help you get started: Sample Debt Validation Letter

Edit our sample debt validation letter to fit your needs. Then, send it USPS Certified Mail to the collection agent who demands you pay the old debt. Be sure to send this letter within 30 days of receiving notice of the attempted collection. Keep careful records of your debt validation. Repeat this process if the collection agent sells the collection account in question to a different collection agent. (See the comments from readers below for examples of collection agents that seem to sell the accounts of people who ask for debt validations.)

To learn more background information about debt validation and what information you can expect to receive from a collection agent, read on.

Debt Validation Statutes & Case Law

Debt validation rules are set by Congress in statutes and by federal courts in case law. As with other laws, Congress writes the rules, and then the courts interpret them. Here, it is important to understand both because some federal appeals courts interpreted the verification rules narrowly.

We discuss both the statutes and the case law here because other personal finance Web sites focus on the statutes only, and others offer incomplete discussions of the case law. Some discuss only state appellate law, which applies in that state only. You need to understand both the statutes and the case law to get a complete picture of your rights.

Debt Validation Statutes

Let us look at the statute first. Here is FDCPA Section 809(a) (15 U.S.C. § 1692g(a)):

  1. “Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing —
    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.”

According to the statute, after receiving the notice of dispute from the consumer, the collection agent must:

  • Suspend collection activities regarding the claimed debt until the collection agent receives verification of the debt or receives a copy of the judgment against the consumer
  • Provide verification, by mail, to the consumer, including:
    • The name and address of the original creditor
    • A statement from the original creditor the debt is valid
    • The amount of the original debt
    • Copies of judgments (if any)
  • Not report the debt to the credit reporting agencies, including Equifax, Experian, and TransUnion, according to some interpretations of the statute. Or, according to other interpretations, may report the debt to the credit reporting agencies as “disputed.”

If the collection agent is collecting more than one account from a consumer, the consumer must instruct the collection agent how to apply any payments made to each debt. The collection agent may not apply a payment to a disputed debt.

Debt Validation Case Law

If all federal appeals courts had been asked to interpret the debt validation law and did so consistently, we would have a fair understanding of how validation is supposed to work, what information collection agents are supposed to give consumers when validating a debt, and a uniform application of the rules.

States following the 3rd, 4th, 9th & 11th standards
New Jersey*
North Carolina
Northern Mariana Islands
South Carolina
Virgin Islands*
West Virginia
* Must provide dates the debts were incurred to residents in these jurisdictions.

However, four federal appeals courts that could find weighed in with definitions of validation that appear tighter than what Congress may have had in mind when writing the FDCPA.

  • In the Third Circuit, the court articulated this standard: “computer printouts which confirmed amounts of debts, the services provided, and the dates on which the debts were incurred constituted sufficient verification” (Graziano v. Harrison, 950 F.2d 107, 113 (3d Cir. 1991))
  • The Fourth Circuit uses a much lower standard: “[v]erification only requires a debt collector to confirm with his client that a particular amount is actually being claimed, not to vouch for the validity of the underlying debt” (Chaudhry v. Gallerizzo, 174 F.3d 394 (4th Cir. 1999))
  • The Ninth Circuit follows the Fourth Circuit’s lower standard (Clark v. Capital Credit & Collection Servs., 460 F.3d 1162 (9th Cir. 2006))
  • The Eleventh Circuit sets the bar even lower: “verification of a debt involves nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed; the debt collector is not required to keep detailed files of the alleged debt” (Azar v. Hayter, 874 F.Supp. 1314, 1317 (N.D. Fla.), aff’d, 66 F.3d 342 (11th Cir. 1995), cert. denied, 516 U.S. 1048 (1996))

Although this has no legal weight or precedent, FTC counsel seems to follow the Fourth Circuit standard, too. (Wolman-LeFevre letter dated March 10, 1993)

We could find no cases in other nine circuit courts regarding debt verification, and no federal cases contradicting the four mentioned. The US Supreme Court has made no decision in this area.

Therefore, in states in the US Third, Fourth, Ninth, and Eleventh Circuit Courts, collection agent must provide two or three pieces of data in writing when a consumer asks for a debt validation:

  • Confirmation from the original creditor the consumer owes the debt
  • Confirmation from the original creditor the amount demanded is accurate
  • Dates the debts were incurred, if the consumer resides in Delaware, New Jersey, Pennsylvania, or the Virgin Islands (Graziano v. Harrison as cited above).

It is unclear if the other circuit courts would require a collection agent to provide the dates the debts were incurred, or an itemization of the collectors’ added charges, which is what the FTC has recommended Congress add to the FDCPA.

If you live in one of the other nine circuits, then you can argue the collection agent must follow the statute, and not the standards set by the Third, Fourth, Ninth, and Eleventh Circuit Courts.

Tip Dealing with debt? A debt resolution partner might be able to help.

Must a Collection Agent Cease Collecting When it Receives a Verification Notice?

Collection agents must cease their collections activities when they receive a verification notice. A collection agent may resume these activities when it mails a copy of the verification to the consumer.

The 30-day period during which a consumer has a right to request a verification is not a grace period. A collection agent may continue their collection activities, including filing a lawsuit against the consumer.

In a 1997 opinion, the Seventh Circuit states "[t]he debt collector is perfectly free to sue within the thirty days; he just must cease his efforts at collection during the interval between being asked for verification of the debt and mailing the verification to the debtor." Bartlett v. Heibl, 128 F.3d 497, 501 (7th Cir. 1997) (Posner, J.).

The Sixth Circuit stated "[a] debt collector does not have to stop its collection efforts [during the thirty-day period] to comply with the Act. Instead, it must ensure that its efforts do not threaten a consumer’s right to dispute the validity of his debt." Smith v. Computer Credit, Inc., 167 F.3d 1052, 1054 (6th Cir. 1999).

There is no time limit on when a collection agent must respond to a verification. It may, for example, respond with its evidence 75 days (to pick a number out of the air for the sake of argument) after receiving the consumer’s debt validation request. It is unclear if, during those 75 days, the collection agent may not report the debt to the consumer credit reporting agencies, or if it must report the debt as “disputed.”


Send a debt validation letter immediately because there is a 30-day time limit for doing so. The collection agent, in turn, must respond with validation. As discussed above, what is complete and proper validation depends on your state of residence. See the resource What if a Collection Agent Does Not Validate a Debt? if the collection agent does not comply with your debt validation request.

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Comments (197)

Ricki P.
Buhl, ID  |  April 11, 2014
I had a judgment already served to me and my original debt was a little over $1,000. I have paid almost $1,400 and the lawyers still say I owe $2,000, I'm assuming in fees. What can I do?
April 11, 2014
Study your state's usury rules and judgment rules to learn the permitted interest rate for judgments. Do the math on your payments and balance due. If the judgment-creditor is exceeding the state judgment interest rate, then consult with lawyer who has civil litigation experience.
Ann C.
Oconomowoc, WI  |  March 28, 2014
I received a call at work and cell from a collector, and I believe the debt to be mine but the amount is way high like $2,000 to the $800 I think it should be. I want to send a validation letter but they have not given me any address for themselves. They sent me an e-mail with original creditor name and the $2,000 amount and an offer to settle for about $1,000. How do I handle this?
March 28, 2014
Assume you are dealing with a scam artist until you receive written validation of the debt. E-mail is not good enough!

What to do? Insist the caller give you his or her employer's name, mailing address, and the account number of the collection account. Then follow the instructions at the top of this page, and send a written request for debt validation using USPS Certified Mail.

Include in your debt validation letter a request the caller stop calling you at work.

Under federal law, a collection agent can add fees and interest to a collection account when:
  • State law allows it (most do), and
  • The original contract allows fees and interest

The original contract is almost never included with a collection account. As a result, honest collection agents do not add interest and mystery fees to a collection account. Unscrupulous ones do in hopes consumers will not know this FDCPA rule. If the mystery fees were added by the original creditor, then you don't have a strong argument. But if the collection agent added $1,200 to the original debt, then they are almost certainly in violation of the FDCPA. Consult with a lawyer if the collection agent validates the debt to discuss how to proceed.

Kim A.
Lapeer, MI  |  March 11, 2014
I just received a call regarding a consumer debt from my husband from 1992. She mentioned he could receive a 1099C. What is a 1099C? Also, can I be held accountable for his debt. This was 10 years prior to marriage. Should I be concerned? Do we need to follow up on this. After 22 years I am confident he has no records regarding this reported debt.
March 21, 2014
Read 1099-A vs. 1099-C to learn about 1099-Cs.

If you live in a community property state, it is possible for creditors to reach assets owned by both spouses for debt of one spouse. In some community property states, this rule applies to pre-marital debt, too. If you live in a common law state, then it is much less likely state law will allow creditors to reach assets owned by the non-creditor spouse.

You mentioned this is "consumer debt." If the debt is medical or involves supporting a spouse, some states follow the doctrine of necessaries, which requires spouses to support each other and pay each others' medical debts.

Take these three steps:
  1. Validate the debt by following the steps outlined above. A debt that cannot be validated cannot be collected. Roughly half of all collection accounts cannot be validated, and the older the debt the less likely it is the collection agent will be able to validate the debt.
  2. Send the collection agent a cease communications notice with the debt validation.
  3. If you receive a notice of a lawsuit, consult with a lawyer to file an answer. Ignoring a lawsuit will not make it go away and will almost certainly make your situation worse.

You want the collection agent to file a lawsuit over a 22-year-old debt. Why? Under the Fair Debt Collection Practices Act, a collection agent may not file a lawsuit on time-barred debt. If it does so, you have a cause of action (a legal reason to file a lawsuit) against the collection agent for violating the FDCPA, and the right to collect damages for this violation.

Devin S.
Fresno, CA  |  February 12, 2014
I have credit card debt I ignored since 2007. Now I want to fix my credit and someone said look up statute of limitations in California where I live. I have never been sued by any creditors that I am aware of. I know the credit card company's have sold my debt but I have never talked to any of those collectors by phone or by mail. What's the best way to handle this?
February 12, 2014
Read our answer to a similar question to yours here. Please ask any follow-up questions you may have on that page.
Tina B.
Foley, AL  |  February 04, 2014
I received a phone call at work today from a collection agency stating that I owed money for a Student Loan. I told them not to call me at work and to call me on my cell after work. They called and went over my financial situation and they said I qualified for some program. I was surprised that I was getting a call from collections because I have been paying on my Student Loans. After asking more questions, found out it is for a Student Loan from 1992 (22 years ago). They said that I made my last payment in 1996. They said that I got forbearances. I went to school from 2008 - 2011 at an online school. I asked him what school the loans were for and he said the same school name. However, I was not attending that school back in 1992. So I am trying to prove otherwise. But also, can they contact me after 22 years????
February 05, 2014
Validate the debt by following the instructions in the original article above. A debt that cannot be validated cannot be collected.

Can a collection agent contact a consumer to collect a debt after 20+ years. Yes, a collection agent is permitted to call and ask for payment after the statute of limitations has expired from residents of all states except residents of Wisconsin and Mississippi.
Irvine, CA  |  December 02, 2013
I received a debt validation from a collection agency. They sent me a copy of the application in which I did not complete. It was for a YMCA in a city I am not even close to. I have never even been to a YMCA. All the information on the application is not correct (DOB, address, employer, etc.). There is nowhere to put a social so I don't even know how this showed up on my report. I don't know what my next step is. Do I contact the original creditor or the collection agency to tell them this is not me? Thanks for your help!
December 02, 2013
Send the collection agent a notice of insufficient validation, and explain in your letter what you wrote here: They're trying to collect from the wrong consumer. In a country of 330+ million residents, this is a frequent occurrence.
D H.
San Ramon, CA  |  August 04, 2013
I received a collection notice on 4-19-2013 for a bill from a surgery center. My insurance denied the claim so the amount went unpaid. I noticed the collection agency did a hard inquiry on my credit so I decided to dispute the debt. I received a letter a little more than a month after the initial dispute. attached was a printout that the claim is validation of the debt. No forms with any signatures of mines, or anything showing the original creditor has any relationship with this collection agency. Immediately after the dispute, the collection agency started reporting tradelines with experian, equifax and transunion, which they hadn't done prior to my disputes. My question is what could I possibly do about this matter? It seems very fraudulent to me.
August 05, 2013
Exactly which facts a collection agent needs to obtain from the original creditor varies slightly by which federal circuit you live in. Review the "Debt Validation Statutes & Case Law" section above to learn if the collection agent validated the debt in accordance with the FDCPA and case law.
Lindsey B.
Ellensburg, WA  |  June 19, 2013
A collector who holds a dental bill in my name sent me a bill. I sent them a Validation Demand Letter in return.. here is the link to the template I used for that letter: (link removed) In the letter I asked them for:
  • Proof I agreed to this debt with my signature(s)
  • Proof the amount you are claiming is correct and legal, which will require all statements and payment history from the original creditor
  • Proof this account is within the Statute of Limitations and has not expired
  • Proof you are the owner of this account, which will require the contract and terms between you and the original creditor Proof you are legally licensed (bonded and insured if applicable) to collect this debit in my state
  • For verification purposes, I will need your business license number(s)

They responded w/: a payment history from the original creditor, as well as a letter from the original creditor stating if the account was not paid by 4/20/2009 to their office that they were planning on sending the account to this specific collector.

I don't see that they sent me everything that I asked for. For instance, I did not receive these items requested on the Debt Validation list from them:

  • Proof I agreed to this debt with my signature(s)
  • Proof you are the owner of this account, which will require the contract and terms between you and the original creditor Proof you are legally licensed (bonded and insured if applicable) to collect this debit in my state
  • For verification purposes, I will need your business license number(s)

So my first question is, Don't they have to send me everything I asked for in my original Debt Validation letter? Is what they did send me considered enough? Or am I within my rights to send them a letter back stating they did not provide me what I requested and warning them about violating my rights under the FDCPA to get them to stop pursuing me for this debt and to get them to cease reporting this debt to the Credit Reporting Agencies? Also, if I am within my rights to send them a letter warning them about the above details, do I need to wait until 30 days from the date I originally sent them out the original Debt Validation Letter? Or is it ok to send it right away since they already responded to my original letter?
June 20, 2013
Take a moment to review our original answer above. The Fair Debt Collection Practices Act and the federal circuit courts have a much lower standard of verification than the form letter you found would suggest. You can certainly send the collection agent a notice of insufficient validation. It is my opinion, however, that federal law does not obligate the collection agent to share information about its business license or copies of your signature on any documents.

As things stand now, the standards for what a creditor is required to furnish to validate a debt are lax and not consumer friendly. This issue, however, is getting more attention and there is pressure from the FTC and the CFPB to set clear standards that better protect the individual consumer.
John F.
Glendale, CA  |  February 12, 2014
Bear in mind, regarding signatures, that a debt can be valid even if you did not sign anything. There are many such debts-- you could call a man to paint your fence. He says it will cost 200.00. You say okay- paint it. He does so. You owe him the 200.00 (unless he used bad paint, or missed a lot of spots, etc.) This is known as a verbal contract.
February 12, 2014
You are correct: The law recognizes written, spoken, and implied contracts.

When it comes to loans and credit cards, most lenders and credit card issuers will argue they and their credit card customers are bound by written contracts, and that the statute of limitations for written contracts apply. Courts, in reaction to this argument, will say, "Fine, then show us the contract the consumer signed."
Samantha R.
Oakland, CA  |  January 11, 2013
In 2006, I briefly enrolled in a credentialing program With the promise I would receive financial aid to pay for the program. Even though I filed a FAFSA and required financial aid, the school never addressed this. I had to withdraw.

A couple of months ago, the school contacted me and claims that I owe them over $6,000. I responded to them in writing within 30 days to dispute the debt and they never responded.

Today, I received a collections notice on behalf of the school from a collections agency. I plan on disputing it right away. Should I include in the dispute letter that the statute of limitations is up? I live in California where the statute of limitations is 2-4 years. How likely do you think it is that they will get the debt verified and take me to court?

If the affirmative defense is used, then the case would be thrown out right?
January 15, 2013
You have several defenses.
  1. Consult with a lawyer who has consumer law or civil litigation experience. If the school promised to help you find a loan, and you dropped out shortly after enrolling because it failed to fulfill its promise, then you owe the school nothing. The $6,000 debt should not exist.
  2. Assume for a moment you have legal liability for the debt, the California statute of limitations for a breach of contract is 4 years. Here in 2013, we are long passed the California statute of limitations. Should the school or its collection agent file an action against you (a lawsuit, in other words), you have the affirmitive defense of statute of limitations you can assert. If you assert this defense at trial and the court looks at the timeline here, it will dismiss the case.

No outsider can answer the question, "Will creditor X file an action against me," because creditors and collection agents are unpredictable. I have seen collection agents sit on collection accounts totaling tens of thousands of dollars, and other collection agents file small claims cases for $500 accounts.

My advice? In your debt validation letter, explain that if the collection agent files an action, you plan to assert all available defenses including breach of contract and the California statute of limitations.

Kimberly O.
Fort Worth, TX  |  November 19, 2012
My husband received a phone call about a debt (payday loan) he supposedly owes from 2006. He was told that he would be summoned to court if he did not pay. My husband kept asking for information on it and all they told him was the amount of the debt and the name of the place that he originally had the debt to. When he asked if they could send the info to his email they told him yes and asked for his email address. He gave it to them and they never sent anything. The guy told my husband 'so you admit you owe this debt?'. my husband said he did take out payday loans before but they were paid for. when he tried to ask for more information about the loan, they kept skating around the question and tried to get him to pay money today. When he refused until he got info, they said he would be served with a summons at his place of employment. Now, I read that the statute of limitations in Texas is four years so is what the debt agency saying valid or are they blowing smoke up your... you know. lol any info would be greatly appreciated.
November 19, 2012
First, your spouse should reread the original article above to learn the steps necessary to validate a debt. If a collection agent refuses to give a consumer its contact information to validate a debt, then the consumer should assume he or she is dealing with a fake debt collector.

Second, you mentioned you reside in Texas. Read the article Payday Loans & Hot Checks in Texas to learn why the collection agent's statement your spouse could expect to be served a summons at his place of employment is possible under law.

Third, the Texas statute of limitations is four years for a breach of contract, as you mentioned. However, that does not mean the creditor is prohibited from filing a civil lawsuit against your spouse. However, it does mean that if your spouse mounts a defense against the creditor, and the court believes the statute of limitations defense, the case will be dismissed.
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