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  • Writer's pictureFair Capital

The Ultimate Guide on How to Dispute a Debt and Win

Updated: Sep 10, 2023

Have you ever been left feeling powerless and frustrated when faced with a questionable debt or a dubious credit card transaction? If so, this article is your lifeline. We're about to embark on a journey that will arm you with the knowledge and strategies you need to confidently dispute a debt with a collection agency or challenge a transaction with your credit card company.


We'll also delve into the differences between debt validation and verification, the responsibilities of debt collectors, and what you can expect throughout the process. Additionally, we'll provide tips on how to dispute a debt and win!

How to Dispute a Debt and Win
 

Takeaways:


The difference between debt validation and verification

Collections on Your Credit Report? What you should do.

Disputing Charges with a Credit Card Company

 

Debt Validation vs. Debt Verification: Understanding the Distinctions

Debt validation and debt verification are often used interchangeably, but they have distinct meanings. Debt validation refers to providing a debtor with a "debt validation notice" containing specific information about the debt. This notice is typically sent within the first communication or within five days of initial contact, as required by the Fair Debt Collection Practices Act (FDCPA).


A Debt Validation Notice will include the basic information about the debt such as follows;

  1. The amount of the debt

  2. A reference number

  3. Itemization date

  4. Validation period end date

  5. The name of the current creditor

  6. Information about the debtors' rights

  7. How to dispute the debt

  8. A statement that the collector will provide the name and address of the original creditor upon the consumer's written request within the the validation period (if different from the current creditor).

Debt Verification: What Debt Collectors Must Provide for Verification

On the other hand, debt verification refers to a debtor disputing the validity of a debt and requesting the collection agency to verify it. If a debtor disputes a debt in writing within the validation period (Usually 30 days), a debt collector must send verification of the debt to the debtor before continuing collection activity. Now the question is; what information or documentation does a collection agency need to provide to validate a disputed debt?


What information does a debt collector have to provide to validate a debt dispute?

Section 1006.38(d)(2) of Regulation F (collections laws) states that upon receipt of a dispute submitted by the consumer in writing within the validation period, a debt collector must cease collection of the debt, or any disputed portion of the debt until the debt collector provides either verification of the debt or a copy of a judgment to the debtor.

The FDCPA, however, does not define “verification” nor does the Act identify the specific information that a debt collection agency must provide to confirm a disputed debt. The lack of legislative history, Federal Trade Commission (FTC) interpretations, and court cases have exacerbated the problem of interpreting what constitutes sufficient verification.


Debunking False Expectations

The lack of clarity surrounding debt disputes has led to numerous online resources offering misleading advice on how to best dispute a debt. This false information often causes unnecessary trouble to debtors and may result in the debt being reported to credit bureaus or to even facing a lawsuit that could have been avoided if dealt with correctly. These sources frequently suggest that debtors request various documents, such as a signed contract, the debt collector's agreement with the creditor, and proof of the collector's license in their state. However, many of these demands are not legally supported, and debt collection firms are generally under no obligation to provide such information. It is, therefore, important to have realistic expectations and not to assume that a debt collection agency will supply the information they are not obligated to provide.


Some courts have been very clear that the Fair Debt Collection Practices Act (FDCPA) does not mandate debt collectors to supply an original, certified, or signed copy of the document that created the debt as a form of verification. Furthermore, certain courts have determined that a debt collector is not required to maintain comprehensive records of the debt or provide copies of bills or other detailed evidence upon request for verification. However, it is evident that a collection agency is obligated to verify a disputed debt and send verification upon establishing its validity.


Verification may vary by state

The majority of states do not have more restrictive verification requirements than the FDCPA. However, some states have additional requirements or have other provisions that may require debt collectors to provide information about a debt to consumers in certain circumstances.


Collections on Your Credit Report? What you should do.

Before we unravel the How to Dispute a Debt and Win guide, it's critical to recognize that these steps work effectively only when you're challenging a legitimate discrepancy. Disputing a valid debt will not only fail to resolve the situation but can also have negative consequences.


Step 1: Identify the Discrepancy: Examine your debt details thoroughly. Cross-check with your own records to understand the nature of the discrepancy.


Step 2: Gather Evidence: Compile all necessary documents that support your dispute - payment receipts, emails, contracts, etc.


Step 3: Contact the original creditor: Even if your account is under a collection agency, it's worth contacting the original creditor. While some may avoid discussions post-collections, many will be open to dialogue to resolve discrepancies. If resolved, ensure the creditor informs the collection agency about the correction.


Step 4: Don't be afraid to talk to a debt collector: Contrary to common belief, a professional debt collection agency can be very helpful to debtors. Collection agencies serve as a crucial bridge between debtors and creditors, facilitating open communication and providing the necessary support and answers. This also ensures that debtors always have timely assistance when needed.


In most cases, debt collection agencies can expedite the process of conveying accurate information to debtors. This is because creditors are required to respond to their debt collection partners within a reasonable timeframe. By engaging in open and honest communication, debtors can better navigate the complexities of debt disputes and work towards amicable resolutions.


Step 5: Request Verification: Write to the collection agency or creditor requesting verification of the debt in question. Debt Validation Letter and Instructions.


Step 6: Draft a Dispute Letter: Write a formal letter detailing the specifics of your dispute. Include your personal information, account details, reasons for the dispute, and any supporting evidence. Debt Validation Letter and Instructions.


Step 7: Send Your Letter: Send your dispute letter via certified mail with the return receipt requested. This will provide proof that the creditor received your letter.


Step 8: Follow-up: If you don't receive a response within 30 days, reach out again. Stay persistent.


Step 9: Explore External Assistance: Facing an uncooperative or unlawful debt collection agency? Consider escalating the issue to the Consumer Protection Bureau or consult a consumer law attorney or debt counselor for professional advice.


An overview of the debt collection dispute process: Flowchart

Create a flow chart of the debt collection dispute process Creditor assigns a debt to a debt collection agency. Within 5 days, the debt collection agency sends a validation letter to the debtor with basic information on the debt. The debtor has approximately 35 days to dispute the validity of the debt and request verification. Debtor can dispute via: a. Mail b. Electronically (if the collection agency supports it) c. Via credit bureaus d. Over the phone (if the collection agency supports it) If disputing via credit bureaus, the process involves: a. The debtor sends a dispute to the credit bureaus. b. The credit bureaus request verification from the debt collection agency through the e-Oscar system. c. The debt collection agency initiates an investigation and also requests the original creditor to investigate the account and confirm its accuracy. d. After finalizing its investigation, the debt collection agency updates the status on e-Oscar. e. The debt collection agency then notifies the debtor and provides verification if the account has been verified as accurate.

Disputing Accounts with Credit Card Companies

Step 1: Identify the Discrepancy

Before you can dispute an account, you need to identify the issue. This could be an unauthorized charge, an error in the billing statement, or a charge for a product or service you didn't receive. Review your credit card statement thoroughly and highlight any discrepancies.


Step 2: Gather Supporting Documents

Once you've identified the issue, gather any supporting documents that can strengthen your case. This could include receipts, emails, contracts, or any other evidence related to the disputed charge.


Step 3: Contact the Merchant

Before reaching out to the credit card company, it's often beneficial to contact the merchant directly. They may be able to resolve the issue quickly and save you the trouble of a formal dispute.


Step 4: Initiate the Dispute

If the merchant is unable to resolve the issue, it's time to contact your credit card company. You can usually do this online, over the phone, or by mail. Provide a detailed explanation of the dispute and include any supporting documents.


Step 5: Follow Up

After you've initiated the dispute, be sure to follow up regularly. The credit card company may require additional information, and staying proactive can help expedite the process.


Best Practices for Disputing Accounts

  1. Act Quickly: Most credit card companies require you to dispute a charge within 60 days. The sooner you act, the better your chances of a successful dispute.

  2. Keep Records: Document all your communications with the merchant and the credit card company. This includes dates, times, names of representatives, and the content of the conversations.

  3. Stay Patient: Disputing a credit card charge can take time. Stay patient and persistent, and remember that the process is designed to protect your rights as a consumer.

Unknown Tricks for a Successful Dispute

  1. Leverage Social Media: If you're having trouble reaching the merchant or getting a response, try reaching out on social media. Many businesses are keen to maintain their online reputation and may be more responsive to public posts.

  2. Use a Certified Letter: If your dispute isn't being taken seriously, consider sending a certified letter. This not only provides a paper trail but also signals to the credit card company that you're serious about the dispute.

  3. Consult a Consumer Advocate: If you're struggling with the dispute process, consider reaching out to a consumer advocate. They can provide advice, support, and sometimes even intervene on your behalf.



FAQs

How to Dispute a Debt and Win?


What proof does a collection agency need to provide to confirm a disputed debt?

The FDCPA does not define "verification" or identify specific information that a debt collection agency must provide. However, the debt collector must cease collection of the debt until they provide either verification of the debt or a copy of a judgment to the debtor.


Are debt collectors required to provide signed contracts, agreements with creditors, or proof of their license to debtors when verifying debts?

No, many of these demands are not legally supported, and debt collection firms are generally under no obligation to provide such information.


Do all states have the same debt verification requirements?

Most states do not have more restrictive verification requirements than the FDCPA, but some states have additional requirements or provisions that may require debt collectors to provide information about a debt to consumers in certain circumstances.


What information should I request from the debt collection agency?

You can request a validation notice that includes the amount of the debt, the name of the creditor and the date the debt was incurred. You can also ask for a copy of the original signed agreement (if one exists), an invoice or a statement; however, the collection agency is not necessarily legally required to provide these documents.


How to dispute a debt and win.


Please note that the information provided on this website, including any content, materials, and resources, is for general informational purposes only and should not be construed as legal advice.

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Disclaimer: Any and all information is not intended to be, nor is it, legal advice. Please consult your attorney for information concerning allowable rates of interest.

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