Obtain proof of debt from collectors before you pay

To Her Credit columnist Sally Herigstad
Sally Herigstad is a certified public accountant and the author of "Help! I Can't Pay My Bills: Surviving a Financial Crisis" (St. Martin's Press, 2006). She writes "To Her Credit," a weekly reader Q&A column about issues involving women, credit and debt, for CreditCards.com, and also wrote for MSN Money, Interest.com and Bankrate.com, and has guested on Martha Stewart Radio and other programs.

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Question for the CreditCards.com expert

Dear To Her Credit,
I sent a debt validation letter to a collection agency for an account I had with a previous company. This collection agency responded by sending me a letter stating that they had purchased the debt from a previous creditor that was associated with my name, and they showed the last four digits of my Social Security number. That's it! They did not send me the proof I was asking for.  What should I do next?  -- Jennifer

Answer for the CreditCards.com expert

Dear Jennifer,
That sounds like very thin "proof" indeed. If that's all they have, you shouldn't send them anything. You have no way of knowing if they actually own the debt. It's possible they are trying to collect before they purchase the debt as that happens all the time. That's not enough information to prove that they currently own the debt, however.

If a collection company really owns your debt, it should be able to show recent statements on your account. The balance and activity should match your records. They may also be able to show your application with your signature.

Some states have even more requirements for what constitutes validation of a debt. For example, new rules in Maryland require the collector to show a listing of each prior owner of the debt, among other things. The trend nationwide is to require more information from collectors, who may have only the sketchiest information after the debt is passed from one to another over time.

I'm surprised they even tried to submit validation when they had so little. Most collection companies in that situation would simply move on. Their time is money, and they'd rather spend their time on someone who is a little less savvy, perhaps more easily intimidated. Apparently, they hoped you didn't really know what debt validation is and gave it a whirl. It won't work.

Do not send the collector money or give them any more information about yourself or your financial situation unless they can prove they own the debt, how much you owe and that the statute of limitations has not expired. The burden of proof is on them and if what they've sent so far is all they have, they shouldn't get far.

In the meantime, it's important to check your credit report (you can pull it for free once a year from each of the three big credit bureaus at AnnualCreditReport.com) and make sure this company isn't damaging your credit score.

If the collection company cannot satisfactorily prove that it owns this debt, you should tell the company to stop contacting you. Send a letter by registered mail. If necessary, write to the credit bureau and tell them you do not owe this debt. Our debt collection sample letters can help.

If the collection company persists, you may need legal help. You can go to a low-cost legal center, or you can look for a consumer lawyer who provides a free pre-consultation. As thin as their evidence is, I wish I could tell you to just ignore them. However, ignoring a collector is never a good idea. Resolving issues like this as quickly as possible is one of the most important ways you can take care of your credit.

See related: Know your rights: Fair Debt Collection Practices Act

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Updated: 01-20-2018