What is Debt Validation?

Anytime payments are involved, people like certainty. Nobody wants to feel like they’re squandering money, whether the amount is small or large. Consumers deserve protection.

After all, there are many scams out there, and business relies on a foundation of trust; customers need to trust that the credit card companies will support them if there’s fraud. Otherwise, they’ll be more hesitant to make purchases on credit, and that doesn’t help them or local businesses.

Ideally, customers decide to buy something, and then they pay for it. In practice, it doesn’t always happen this smoothly. Sometimes, consumers are confused about the terms of their purchases and don’t understand what they are. In other cases, they are correct in identifying debt collection scams and rightfully don’t owe a penny to this online fraud.

Let’s check out more about debt validation, why it exists, and how Summit A*R can navigate related processes for you.

What Exactly is Debt Validation?

Everybody wants to be positive about what they owe before making payments, and everybody wins when there’s more alignment between parties. A debt validation is a letter that debt collectors must provide containing pertinent information, such as the debt’s size, deadlines for payment, and how consumers can dispute it.

Professional debt collectors are lawfully required to provide this information, which signals to the debtor that it’s legitimate and also clarifies the specifics of what’s owed. Here is some basic information about what debt validation letters must contain:

• The name of the credit to whom you owe.
• The amount owed.
• This debt can be disputed but only within 30 days, after which point the debt collector assumes it’s valid.
• If the consumer disputes it, the collector must provide evidence the debt is real.

If consumers get a call over the phone from a debt collector, they’re within their rights to ask for a validation letter to see the request in writing. At that point, it must be submitted within five days.

How to Minimize Debt Validation Letters and Prevent Them from Arising

If consumers receive a debt validation letter, it usually means that something in the process hasn’t worked optimally. Ideally, consumers understand what they’re buying and the financial terms, and then they send the money over, fulfilling the agreement. A debt validation letter wouldn’t be necessary if both parties lived up to their end of the deal.

Where was the problem, exactly? Did the consumer misunderstand the terms initially? Did the business fail to provide clarity on what would be owed and when it was due?

Providing clear instructions at the outset can help prevent debt collection disputes from arising by reducing confusion and reducing the likelihood of needing to send any debt validation. Companies may still do all they can and run into customers trying to avoid payments, just like customers may receive a fraudulent collections call and ask for debt validation to prove it’s real.

If businesses do their best to genuinely ensure there’s alignment at the start, they’ll run into fewer problems down the road. Hiring Summit A*R to handle your consumer debt collection solutions takes the issue off your plate entirely.

In addition to collecting debts, we can also provide accounts receivable consultations to optimize your processes and pre-emptively prevent problems from arising. We’re a lot more than just debt collectors.

Full-Service Litigation

Customers and clients who get a debt validation letter don’t always comply, and these difficult accounts pose headaches for companies. At some point, they must decide: is investing the time, money, and energy needed to track down this client worth it, or should they cut their losses and accept that they won’t get paid?

It’s not a great choice. Sometimes, recouping a large sum costs a smaller one. But you don’t know if you’ll get it in the end, and you’re spending more money as it drags on. On the other hand, if customers or clients feel that they can buy things without paying for them, it sets a bad precedent for the future.

A*R Summit can help you in a couple of ways. We have our own skip-tracing department staffed with a licensed, certified private investigator in-house. You won’t have to pay extra to use their services. They can find debtors who don’t want to be found and their assets. Locating these people won’t take time and energy away from your HR department or other vital personnel.

If things really escalate, we can help you take on debt collection lawsuits with a qualified attorney. These matters aren’t all in your control, but you’ll get professional support no matter how your clients or customers behave.

Keeping Relationships Intact

Summit A*R is proud to be among the most ethical debt collectors in the country. We never use aggressive, hostile tactics like robocalls or threats and always make it a point to treat people with kindness. This approach has a few benefits.

For us, we managed to recoup nearly double the industry’s national average. Treating people kindly isn’t in conflict with getting results! Plus, it helps our partners maintain positive relationships with people they’d like to do business with again.

After all, disputes over money can be awkward and uncomfortable. We know how to put ourselves between you and the debtor to resolve the situation amicably and quickly to everybody’s satisfaction. You’ve worked hard over the years and invested lots of money into advertising to develop good relationships.

We’ll help ensure you can keep them positive effortlessly by taking on the collecting and all related tasks ourselves and doing it in a friendly, professional, but insistent tone.

Commerce needs a fair amount of mutual trust in the process for it to go smoothly and successfully for both parties. Businesses need to accept that customers and clients aren’t wrong to be wary in a digital environment that isn’t exactly free of fraud.

Customers should grasp that businesses sometimes make considerable upfront expenditures and rely on getting paid back later and honouring this process. When there’s friction or misunderstanding, debt collection agencies and a debt validation letter might be necessary. Hopefully, they don’t come up, but if they do, Summit A*R can handle everything for your company, so your top personnel are free to work where they’re most effective.