Certain Debt Repair Companies Use and Abuse Debt Validation, Collectors Charge

There are legitimate, consumer-friendly debt repair companies. And then there are suspect debt repair companies, which have been around for years, charging vulnerable consumers for services that may not help their circumstances and, in some cases, may actually hurt their fragile finances. One relatively new technique in the suspect debt repair company handbook – the mass debt validation request – has caught the attention of debt collectors. Collectors may have no choice but to plow resources into dealing with spurious requests for debt validation, a technique can often leave both collectors and consumers worse off.

The rules are clear. Collection agencies must send consumers a written validation notice when they first contact them. Consumers have 30 days to request – in writing – verification of the debt.

The process was designed by Congress to protect consumers being pursued for debts that were not theirs. Some debt repair services discovered that they can gum up the collections process by blanketing collection agencies with identical or nearly identical requests for debt validation – and sell this as a service to consumers struggling with debt.

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