If you have unpaid debt or have defaulted on loans, you can expect to receive a debt collection letter from a debt collection agency, if you haven’t already received one.

Debt collection companies buyout credit card debt and unpaid loans from banks and other lenders, and then try to collect the debt from you in order to turn a profit.

Due to various technicalities, they may not legally have a right to collect the debt, but that won’t stop them from trying.

In some cases, you may indeed owe the debt that they are collecting, but additional fees and high interest charges may have been added to your debt since you defaulted on your loan.

Of course, you always have the option of paying off your debt, but if you feel that the loan is invalid and the collector is mistaken, or that the additional fees and interest charges are excessive and possibly illegal, or if you just want the collector to verify that they are the legal owner of your debt and that they have the right to collect your debt, it is a good idea to write a first response debt dispute letter to make the debt collector verify your debt.

It’s your right to dispute your debt, so you should take advantage of this option, and at least make the debt collection companies work a little harder. It may save you a lot of money and possibly allow you to forgoe paying off your entire debt or a portion of your debt.

As a case study, we are following the actions of one consumer, who is an associate of ours:

On July 25, 2007, the said consumer received a debt collection notification from a debt collection company on a debt of around $2,500.

This consumer concedes that they stopped payment on roughly $900 in credit card bills over 4-5 years ago, and they have never paid off their debt.

The original credit card company sent them regular notifications for several months, which became less frequent over time and eventually stopped.

They hadn’t received any communications regarding the debt for well over a year or two, until this recent debt notification from the collection agency.

However, the current debt collection company is not related to the original credit card issuer and the additional fees and charges are quite high.

The debt collection agency is demanding the complete payment of the debt, but is offering them the option of disputing the debt in a letter (which the consumer has a legal right to do).

In this case, the consumer chose to write a debt dispute letter to the collection agency.

The initial debt dispute letter must be sent within 30 days of of receiving the notification from the collection agency, and the consumer will need to get a return receipt notification from the post office to track the letter.

On August 6, 2007, they sent the following Initial Debt Collection Dispute Letter, which they obtained for free from Debt-n-Credit-Letters.com, which offers this and many other consumer rights letters for use in financial communications.

Example of Initial Debt Collection Dispute Letter

Today’s Date

Your Name
Your Address

Collector’s Name
Collector’s Address

Dear {insert name of collector or company},

I am writing in response to your (letter or phone call) dated {insert date}, (copy enclosed) because I do not believe I owe what you say I owe.

This is the first I’ve heard from you, or any other company on this matter therefore, in accordance with the Fair Debt Collection Practices Act, Section 809(b): Validating Debts:

(b) If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.

I respectfully request that you provide me with the following information:
(1) the amount of the debt;
(2) the name of the creditor to whom the debt is owed;
(3) Provide a verification or copy of any judgment (if applicable);
(4) Proof that you are licensed to collect debts in (insert name of your state)

Be advised that I am fully aware of my rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act. For instance, I know that:
(a) because I have disputed this debt in writing within 30 days of receipt of your dunning notice, you must obtain verification of the debt or a copy of the judgment against me and mail these items to me at your expense;
(b) you cannot add interest or fees except those allowed by the original contract or state law.
(c) you do not have to respond to this dispute but if you do, any attempt to collect this debt without validating it, violates the FDCPA;

Also be advised that I am keeping very accurate records of all correspondence from you and your company including recording all phone calls and I will not hesitate to report violations of the law to my State Attorney General, the Federal Trade Commission and the Better Business Bureau.

I have disputed this debt; therefore, until validated you know your information concerning this debt is inaccurate. Thus, if you have already reported this debt to any credit-reporting agency (CRA) or Credit Bureau (CB) then, you must immediately inform them of my dispute with this debt. Reporting information that you know to be inaccurate or failing to report information correctly violates the Fair Credit Reporting Act § 1681s-2. Should you pursue a judgment without validating this debt, I will inform the judge and request the case be dismissed based on your failure to comply with the FDCPA.

Finally, if you do not own this debt, I demand that you immediately send a copy of this dispute letter to the original creditor so they are also aware of my dispute with this debt.

Signature here
Your Printed Name

They included a copy of the original letter from the collection agency and made copies of all of the documents for themselves, as it is important to keep a paper trail.

This will at least stop the collection agency from writing or calling you, and it will take some time for them to verify your debt.

In many cases, upon receiving a debt dispute letter from a consumer, the collection agency will be forced to stop collections for one reason or another.

In other cases, they may be forced to drop some of the fees and charges your account has accumulated.

Either way, this consumer has now made it the collector’s responsibility to prove their debt.

This is just one example of a consumer and their reaction, and we will follow up with this case study on a step by step basis to document the process of disputing debt and resolving bad credit issues.

A debt dispute letter is the first reponse to collection agencies that send you an initial debt collection letter.