When disputing a debt, it is a good idea to put your dispute into writing and maintain a copy of the correspondence for your records in the event further collection activities are pursued. While a letter of credit dispute doesn't alleviate responsibility of a debt, it does prevent further collection attempts until you can show proof you no longer owe or the creditor can prove you do.
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Debt Dispute Letter Basics
Basic format for a debt dispute cover letter is the standard business format (block paragraph as opposed to first line indents). Use a standard font. Place the date, your name and address at the top of the letter. Drop down two single spaces and type the name and address of the creditor. If there is a collection account number associated with the debt, indicate this by writing RE: (account number). The salutation should be the name of the contact person (if known) or the name of the company.
If you are responding to a letter or phone call, indicate this in the first paragraph. Something simple like "I am writing in response to your (phone call, letter) dated (date of call or letter). I do not owe what you are trying to collect from me." If this is the first you are hearing of this debt, state that in the opening paragraph of the letter.
Fair Debt Collection Practices Act, Section 809(b)
The second paragraph should quote the Fair Debt Collection Practices Act, which applies to validating debts. The Fair Debt Collection Practices Act, Section 809(b) states, in part, "If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or any copy of a judgment . . ."
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Ask the creditor to provide the full amount it claims you owe, name of the original creditor (if attempt to collect is through a collection agency), and a copy of the original debt record. You also have the right to request proof the agency is licensed to collect debts in its state of origin.
Close your letter with "I am fully aware of my rights under the Fair Debt Collection Practices Act and the Fair Credit Reporting Act." Indicate you know that the creditor cannot add interest or fees except as allowed by the original contract or state law. Inform the creditor that any further attempt to collect the debt in question without validation violates the Fair Debt Collection Practices Act.
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