Dispute Letter,
Information on Fair Debt Collecting
Under the laws established by the Fair Debt Collection Practices Act, or FDCPA, once a debtor has received first notice of a debt from a debt collector, he or she has thirty days to produce a dispute letter. This dispute letter (a written notice of the dispute of a debt or only a portion of that debt) must be sent to the collection agency within 30 days.
This is not a grace period during which collection activities will cease. The FDCPA considers this a dispute period wherein the collection agency must verify the debt at the debtor's insistence. During the initial communication between a debt collector and the consumer, the debt collector explains what a dispute letter is to the consumer and how he or she must write it to dispute the debt or a portion of the debt. After this, it is up to the consumer to pursue his or her dispute by themselves. It is not the debt collector's responsibility to remind a debtor about a dispute or that the dispute period is ending. If a dispute letter is not sent out, a debt collector proceeds in collection activities.
However, during the 30-day dispute period, if the debt collector has not yet received a dispute letter, they may pursue collection activities so long as they do not interfere with the consumer's right to dispute. Debt collectors do not need to assume that a debtor will send out a dispute letter. Unless they actually receive one, they may carry on with their work.
In accordance with section 809 of the FDCPA, once a dispute letter has been received by a collection agency, then all collection efforts must cease until that debt or a portion of that debt have been verified.
Sometimes, the first communication a debt collector has with a debtor includes in some way proof of a debt or a portion of that debt. However, the debt collector must verify that debt or a portion of that debt again if the debtor has written a dispute letter. This particular part of FDCPA law is meant to assist debtors if a debt collector somehow contacts the wrong debtor at the beginning of his or her collection activities. Dispute letters may be written for any discrepancies pertaining to a debt, whether they are incorrect figures or information such as the wrong name.
Also under section 809, within five days of the first communication, a debt collector must provide a written notice (if it not contained within the first communication) stating the amount of debt and the creditor's name. It must also state that the debt collector assumes the debt's validity unless it is disputed within thirty days via a dispute letter. The notice must also state that the debt collector will send verification of the debt upon receiving a dispute letter, and that they will identify the original creditor upon written request.
Section 809 further states that if a debtor fails to produce a dispute letter to dispute a debt's validity a court may not interpret such as an admission of liability. Additionally, within 30 days of the first communication, an attorney debt collector has the option of taking legal action if it is required, regardless of whether there has been a dispute letter or not. If a dispute letter has been received, legal action may still be taken, but collection activities must still cease until verification. Finally, debt collectors may report debts to a credit bureau within the 30-day dispute period before receiving a dispute letter or other request for debt verification or a Debt settlement letter.