Debt /det/ (noun): something, typically money, that is owed or due.

Medical, student loan, insurance, automotive, and credit card- debt collections in the United States is an $18.6 billion industry. With more than 7,000 collection agencies, it is easy to see why consumers are overwhelmed when it comes to reconciling their debt.

Knowing if they’re paying the correct amount to the right party is a fair concern. Especially, after the debt is sold from the original creditor to a collection agency. To assist consumers, the Federal Trade Commission is responsible for enforcing the Fair Debt Collection Practices Act (“FDCPA”) which protects consumers from “deceptive, unfair, and abusive debt collection practices.”

Industry Data

In 2020, pandemic restrictions were instituted in some states prohibiting collections. However, such restrictions have since expired and some collections agencies have even reported an increase in payments which they credit to less spending during the pandemic.

Regarless of the increase in payments, the Consumer Financial Protection Bureau‘s 2022 Annual Report to Congress reported that consumer debt rose to a new high of $15.58 trillion in 2021. The increase was largely driven by credit card and automotive debt. Although, medical debt still accounts for more than 50 percent of all collection tradelines.

Know Your Rights

When creditors determine that you are past due on a payment, they will turn over your balance to collections. Balances are typically turned over three to six months after remaining unpaid.

If debt collectors are contacting you, it’s important to understand the rights you have. Debt collectors are required by law to send a debt validation letter to describe the debt- what you owe, whom you owe, and the deadline by which you need to pay. If you are initially contacted by phone, text, or email, the validation letter is to be mailed to you within five days.

Whether it is your debt or not, ignoring the collectors will not make the situation disappear. Instead, the United States Consumer Financial Protection Bureau (CFPB) suggests that you contact the agency to inquire about the debt.

What A Collector Cannot Do

There are a few things to keep in mind when dealing with debt collectors. Legally, collectors are not to contact a consumer outside the hours of 8:00 a.m. and 9:00 p.m. They cannot use obscene or abusive language or harass a consumer. Collectors are not to share your personal information with others and if you’ve informed them that you are not to be contacted at work, they must respect your request. They are not to lie about the debt you owe or be unfair in terms of collecting more than you owe.

For consumer advice from the Federal Trade Commission, as well as their full list of frequently asked questions regarding debt collection, click here.

Why Is a Validation Letter Crucial

The last thing anyone wants to do is pay an outstanding balance they don’t have to. Perhaps the debt isn’t yours. What if, the debt is past the statute of limitations and legally you are not required to pay? Or, consider if it is a collection scam?

Be mindful that more than 50% of debt collection complaints are for attempts to collect a debt that is not owed, as reported by the Consumer Financial Protection Bureau. Report a debt collector to the Federal Trade Commission, the Consumer Financial Protection Bureau, and the state attorney general if you suspect any illegal or inappropriate actions.

The Significance of a Verification Letter

You’ve received a validation letter…now what? After receiving a validation letter from a creditor or collector you have 30 days to respond with a verification letter. Yes- the two sound very similar. However, they are very different and serve two purposes.

The objective of a verification letter is to dispute the debt. You can dispute the debt all together if you do not owe the debt or you can dispute how much you owe based on your records.

You can still send a verification letter after 30 days of receiving the validation letter, but after 30 days the debt is assumed to be yours. So, promptly responding is important.

Validation vs. Verification Letter

The Consumer Financial Protection Bureau offers several validation sample letters to guide your correspondence.

Importance of Certified Mail

The importance of Certified Mail® for both a consumer and debt collector is substantial.

Collectors send debt validation letters and notice of legal proceedings via Certified Mail, while consumers utilize Certified Mail to send debt verification letters. In both cases, 'proof of mailing' and acceptance by the United States Postal Service are necessary for record-keeping.

Thorough records are especially important when dealing with debt collection.

Convenience and Tracking with Certified Mail Labels

Our services allow you to skip the trip to the Post Office altogether.

Certified Mail Labels allows users to easily address certified letters from the comfort of their home or office. You’ll still receive provides proof of mailing, USPS tracking, Electronic Delivery Confirmation, and Return Receipt Signature. As an added value, customers have access to their records for ten years at no additional cost. Learn how to Add Value, Pay Less: Tracking with Certified Mail Labels.

Unlike the US Postal Service, there are no stickers, forms, or long lines to wait in! Certified Mail Labels requires no monthly fees, no contracts, and no software or special equipment. Just log on, address, print, and mail!

It’s time to skip the trip to the Post Office with Certified Mail Labels. Create your account now and be on your way to debt free living today!

To skip the trip to the printer and post office, consider our full-service print and mail option. Contact our customer support team to learn more about our full services solutions.

Additional Resources
Repair your credit one certified letter at a time
How to dispute debt collection that comes via Certified Mail