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When a consumer disputes a debt

June 22, 2017 at 8:04 PM

Recently a consumer called both the business and our office asking for details on the debt that had been submitted for collection. 

Most likely this consumer had received numerous statements regarding this bill, so most likely the debt was no surprise.  The fact is – the consumer has a right to verify the debt and dispute if they believe they do not owe the debt. 

How would you handle a consumer (that you had turned over to collections) who asked for clarification? The process is defined by the Fair Debt Collection Practices Act and is very regulated.  Professional Collection Service also has internal procedures that follows these guidelines and are effective for our agency.

Let’s review how the process works…

When you submit an account, you are only required to provide the date of service and amount owed.  You may provide more information but it is not necessary. We will need statements and other info only if the debt is disputed OR we take legal action.

Once the debt has been turned over to collection and per your listing agreement, all communication regarding this debt is now with the collection agency. From this point, you will NOT send statements (or charge interest).  If they call your office, politely state they should contact us. 

The consumer is sent a letter listing the creditor (our client), the date of service and the amount owed. The letter also clearly states they have 30 days from the date of letter to dispute the debt IN WRITING – to our office (not to creditor).  Review that letter HERE…also see this link as to the process of dispute.

If the consumer does not contact our office in 30 days, the debt is considered valid and we proceed to collect the debt. For most accounts we phone and/or send letters regarding the debt and if the debt is over $50, the debt is reported to the credit bureau and will show up on the consumer’s report.  

This process, by law, is meant to protect the consumer and the creditor.  The consumer is given an opportunity to dispute a debt that potentially could hurt their credit worthiness and they may not truly owe. The laws also protect the creditor and agency by requiring the consumer dispute IN WRITING within 30 days of written notice (from collection agency) of the debt.

A disputed debt will not be reported to the credit bureau or - if the debt has already been reported, it will be listed as “disputed”.  When we receive the written notice of dispute, we cannot contact them regarding the debt until the dispute is resolved. When a dispute has been initiated, we will ask the creditor for documentation (statement, payments received, etc) so we can verify the debt. This process means that you, as a creditor, will want to have accurate records regarding any debt you submit for collections.

Hope all this helps! If you have any questions, visit our FAQ page or….ask!  We are here to help!

Category: Collection Regulations

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