Collection Disputes: Good Faith or Bad Faith?

Less than 5% of disputes are valid.  Disputing debt to a collection agency is a lot like pleading not guilty to a murder trial when the victim has come back from the grave as a witness.  Both are a waste of time and resources for all parties involved.

What is a dispute?  Under the Fair Debt Collection Practices Act (FDCPA), a consumer has the right to dispute the validity of their debt due.  A dispute can be verbal or written.  A written dispute is the more common of the two because it is a non-confrontational form of dispute.

Grinch 1The internet is a beautiful thing.  The amount of information one can find online is astounding.  On the flip side, that information can be misleading, especially when it comes to disputing debts.  For instance, consumers often find that a collection agency needs to validate the debt.  This is true only within the 30 day window after the consumer has received the first demand letter from the collection agency.

The consumers do their own research knowing that they do, in fact, owe the debt.  They find that they can write a letter to the collection agency hoping the debt will be dismissed and the account will vanish into thin air.  A reputable collection agency will not just dismiss the debt, but do their due diligence and make sure that the debt is in fact in need of repayment.  At Credit Consulting Services, we pride ourselves in reviewing documents thoroughly.

Invalid disputes are a hassle not only for a collection agency, but also for the consumer.  The consumer knows they owe the debt.  They try to dispute it in an attempt to get it removed from their credit even though disputes can negatively impact credit.  The consumer goes through the trouble of composing a letter themselves, or more likely they find some general form letter to use while surfing the web.  That letter can then be sent as “registered mail” which costs the consumer about $6.  That money could’ve been used to repay part of the debt!

Disputing debt does nothing to improve a consumer’s credit score.  Also, bad debt affects the economy as a whole.  When a consumer does not alleviate their debt with a creditor, the creditor has to raise prices in order to pick up the slack the consumer created through their debt.  So this individual’s debt hurts other consumers as well.  Disputing not only affects an individual, but it has a domino effect and hinders other consumers.

ConfusedWe live in the 21st century, and if a debt is truly not valid wouldn’t you pick up the phone and call the agency or creditor to try and get things figured out?  A true dispute happens immediately after the first bill is received by the responsible consumer who pays their bills on time.  Invalid disputes can occur months or even years after the bill is received.  Consumers with wrong intentions do not dispute the debt until it affects their ability to borrow money.  It is quite simple, the debt is either owed or it isn’t.

At the end of the day, if you have a legitimate dispute, respond within 30 days of receiving a statement from the creditor or the first demand letter from the collection agency. Do not dispute the bill simply because you did not pay and want it removed from your credit report to get a better credit rating, which falsely misleads the lender into believing you pay your bills on time.

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