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Debt Buyers Validate Little More Than Half Consumer-Challenged Debt [FTC Report]

January 31st, 2013 · No Comments · Credit Repair

by Credit Info Center

(Last Updated On: January 31, 2017)

Today comes news further supporting our best piece of advice for fighting old debt — the debt validation process. As revealed in an investigation by the Federal Trade Commission (FTC), collection agencies that buy old debt from original creditors are only able to validate consumer-challenged debt a little more than half the time (51.3 percent). So if you haven’t already, may this serve as any further inspiration you need to try the debt validation process.

As reported by The Consumerist, some of the key findings of the study are as follows:

1) When collection agencies buy debt from original creditors, they are rarely provided with:

  • a breakdown of the principle balance, interest or fees associated with the account
  • supporting documents proving the debt owed

2) When original creditors sell old debt to collection agencies, they:

  • provide no guarantee to the debt-buyer that the information attached to the debt is accurate
  • may only allow a period of 6 months to 3 years for the debt-buyer to request supporting documents
  • provide no guarantee that they can follow through with the request for documents supporting proof of the debt

This is all very good news indeed for consumers who are in need of credit repair. If a collection agency is harassing you for payment on old debt, the debt validation process is your legal right to request proof of said debt. Without proper supporting documents provided by the original creditor, this is impossible for the debt-buyer to do. And if unproven, then you are under no legal obligation to pay the debt and the negative listing associated with the debt must be removed from your credit reports. Note, just be sure to send the debt validation letter within 30 days of the initial communication from a collection agency.

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