The collection industry has changed a great deal in the last ten years. Where companies used to assign a debt to their collection department or to a collection agency and paid them after they has collected the debt, now companies are selling their debt to the debt collection agencies at a fraction of the balance of the account. If the collection agency is able to collect the rest of the debt from you, then they get to keep the difference between the money that they paid to the company and the money that you paid to them.
This trend has resulted in some debt collection companies using some unscrupulous practices in order to collect a debt that they think that you owe. They attempt to collect debts that they are not legally entitled to, add additional fees to bump up their profit percentage, or use deceptive practices to get you to pay money that you do not owe. But there is a way to ensure that you are only paying debts that the collection agency is entitled to and that is by asking for debt validation.
There are several things that the debt collection agency can provide for debt validation.
Proof Of Debt the debt collection agency can provide you with proof that the creditor has assigned or sold the debt that you owe to the creditor to the collection agency. The debt collector would not be able to legally require you to pay the debt without this paperwork and any court would throw out the case without it. If the debt collector refuses to provide proof of debt to you, it is a good indication that the collector has no legal right to collect the money for the debt.
Account Statements From Original Creditor the debt collection agency can provide you with account statements from the company that the account was opened with or the debt was originally owed to in order to prove their right to collect the debt. This will also ensure that excessive fees have not been added by the collection agency to the total amount that was owed to the original creditor.
Copy Of Original Signed Credit Card Or Loan Agreement if the debt collection agency can provide you with a copy of the signed original agreement between you and the original creditor, then they have a legal right to collect the debt on behalf of the original creditor. It does not matter whether the debt was assigned or sold.
If the company cannot or refuses to produce at least one of these documents for you to prove that they have a legal right to pursue you for collection of the debt, then you should not send them any money regardless of whatever threats they make. Without at least one of these documents, their case for collection will never hold up in court and they know this, which is why they will make dire threats and lie to you about the consequences of your actions if you do not pay them the money. Do not be fooled and do not pay any debt collector money without first having the debt validated.