How to fight 3rd party collection agencies, and win!
Most of us have experienced going to the mailbox, going through the mail, and randomly receiving a collection notice from a 3rd party company representing an original creditor that you don’t even remember owing money to. It happens to a lot of people, don’t feel bad about it.
There are 2 courses of action that most people take when one of these notices is received.
1. Stick your head in the sand, and ignore it.
2. Pay the money
Which do you normally choose? Did you know that there is a 3rd option? That third option is called VALIDATION. You do not have to pay a debt that is not 100% accurate and validated, and guess what, most 3rd party collection agencies cannot validate the debts they purchase.
I am going to share my method of asking 3rd party collection agencies for validation.
Step 1: Craft a letter directly to the 3rd party collector that has your name, collection account number (collection agency will assign their own number, make sure you don’t put the original account number) and a short paragraph stating that you demand validation (not verification) of the account in question. Make it clear that if the matter is not resolved immediately the matter will be referred to legal counsel. Send this letter certified mail return receipt requested.
(This step should be completed immediately upon receiving a collection notice from a 3rd party collection agency, but if you happened to ignore, or miss the notice it can be done after the collection is already posted to your credit report)
THE COLLECTION AGENCY WILL MOST LIKELY IGNORE THIS LETTER. Get this in your head from the start. If they don’t ignore you, they will send back paperwork that most likely DOES NOT VALIDATE THE ACCOUNT. Continue to step 2.
Step 2: Compose a letter to the 3rd party collector stating that they FAILED TO VALIDATE THE ACCOUNT IN QUESTION, and if the matter is not resolved this matter will be referred to legal counsel. Send this letter certified, return receipt requested.
Prepare yourself- the collection agency will probably ignore this letter too, but we don’t mind. If they have not deleted it within two weeks of receiving this letter, continue to step 3.
Step 3: In the last two letters we have stated that we would refer the matter to legal counsel if ignored, so that’s just what we are going to do. Most people don’t have the cash to have a lawyer send a demand letter to a collection agency every time they get one in the mail, but there is an affordable option to accomplish this. It’s called “Legalshield” and I can tell you from experience that the 3rd party collection agencies that I have used this method with have almost always ignored my letters, but they have never ignored the letter from my legal provider that I have access to through legal shield. I feel the small monthly price that I pay for my membership brings a tremendous amount of value back to me. I have shared this method with all my friends that had 3rd party collections on their credit report, and to date every single one has been deleted, and they all enjoy a 700+ credit score. I hope this method works for you as well.
If you feel this will bring value to someone that you know, please share this with your friends, family, and networks so they can enjoy the benefits of a good credit score.
If you use this method and have good results, please share your story in the comments. I would love to hear about it.