Writing letters to collection agencies: Use caution.

I've spent many years writing a lot of letters. Not love letters unfortunately but letters to deal with credit issues. Letters to creditors, collection agencies and credit bureaus.

You'd be surprised just how many people do not how to write a letter, not because they're uneducated but because these letters are tricky in nature. Anything you put in writing to a creditor or collection agency can come back to haunt you in a big way.

When a consumer uncovers a negative entry on their credit reports, their first instinct is to contact the source and try to improve it or remove it. But if your dealing with a collection account that is a big mistake unless you know what you're doing.

The collection agency can easily get you to admit the debt is yours or worse, pay it before you've even had a chance to determine if its truly accurate. I don't think you'd pay someone else's bills so why pay an invalidated debt?

People do though, all the time. The truth is, you should never simply pay a collection item on your credit reports without first asking to have the debt validated. Validation of debts is where you ask the collection agency to provide proof to you that the debt is valid such as, balance, date of last activity, charges and supporting documentation.

Once you have clearly investigated the debt then you would be wise to send the agency a letter. Phone calls don't preserve your rights so make sure everything is in writing. Remember, a collection agency isn't your creditor. They are hired simply to collect debts.

Whether you decide to pay it or dispute it, you need to be careful how you word your letter because it will become ammunition for the debt collector to come after you.

If you decide to pay it, because you've determined it is accurate and you owe the money, draw up a letter advising the collection agency that you will pay the debt if they agree to remove the item from your credit reports. You really don't want a "paid collection account" on your credit because it still looks bad. You want it gone.

Some may say, well isn't that illegal? Absolutely not. A collection agency owns the right to the debt and just as they reported it, they can remove it. Most of the time the agency only places it on your credit anyway as a collection tool. To get you to contact them. It's a bargaining chip. It is not the same as a creditor who must report your credit history during the time you do business with them.

I've deleted tons of negative entries on credit reports back in the day before I began offering financial advice simply because I asked. You cannot underestimate how bad the agency wants to collect the debt and they will bargain with you.

On the other hand, if you feel the validation process proved the debt isn't yours or is in some way inaccurate, then you need to proceed with great caution in your letter because anything you say WILL be used against you.

I recommend you first check the SOL (Statute of Limitations) on the debt. Debts expire and if yours has, legally you cannot be sued. Yep, it's true and everyday thousands of consumers pay old expired debts.

In your letter to the collection agency be sure to list your complaint, I.e, my debt is past the statute of limitations, the debt is not mine, the time allowed to place it on my credit reports has passed and so on.

Be specific and mention nothing about promising a payment if you dispute the debt. Doing so can renew the SOL on the debt all over again.

Do some research before you write any letters and be careful to review and research what you put in those letters to protect yourself. There's a lot of information online about writing sample letters, researching expired debts and dealing with collection agencies.

I've written an ebook on this, but to put that here, just seems too self promoting so I'll just say do research until you're satisfied that you are handling the issue correctly.

Good luck!

Comments 8 comments

Specificity profile image

Specificity 7 years ago from EAU CLAIRE, WI

This is a really great hub on this topic.  I have, in fact, linked to it in my own 3-part series on dealing with collectors. A Stumbleupon.com thumbs up from me!

sophieqd profile image

sophieqd 7 years ago

Sample letters for disputes to creditors collectors and credit bureaus

This is really good information.

grinwithin profile image

grinwithin 7 years ago from Jersey Shore

Great hub! Don't forget the new tactics NCO and Client Services are using.

Client Services never contacted me, just tried to damage the credit. I called the original creditor and they sent a document clarifying they have not contracted Client Services to collect any account on their behalf AND there was no account placed in collection with them. In fact, the bank provided a letter of credit reflecting the account I do hold has never been late or past due since its inception in the 90's.

I forwarded this information to the Attorney General. When the Attorney General started investigating Client Services, they sent a copy of my letter to them as well as my "evidence" their alleged charge off was fabricated. Moreso than that, they were investigating Client Services for fraudulently misrepresenting themselves as representing their client, the original creditor.

Client Services folds, the trade line is deleted and within 10 days, I start getting calls at the telephone number provided to the Attorney General from another collection firm, NCO regarding the same account.

Even though the company crossed state lines to continue harassment, escalating to excessive phone calls. They of course, will not send anything in writing and refuse to stop calling.

Talk about crossing state lines to avoid prosecution.

Transportation Collection Agency 6 years ago

A great hub indeed! Thanks for the advice and word of caution.

Rita R. 5 years ago

A very well-written and helpful article! It is usually such a hassle to collect past dues. I make it easier by keeping track of billing information in a template that then allows me to then automatically send the billing dues out. I use this straight forward template: http://www.oneclickstatements.com/commission-state...

Rita R.

Jenny S. 5 years ago

Thank you for putting up this sample collection letter... It's always a sticky situation to be in. In my business experience, I personally try to use templates to sending out professional invoices with my collect letters, it helps get a speedy response back. A really good one I found I'll throw in at the bottom of my post.

Jenny S.


Tawnya James 5 years ago

Great content, it was really useful. Thank you

for posting it.


Collection Letter

martinabanaford 4 years ago

hello paul sorry iv took so long this is there contact

and some info , there there most competitive in the game ,just say marts put you on

    Sign in or sign up and post using a HubPages Network account.

    0 of 8192 characters used
    Post Comment

    No HTML is allowed in comments, but URLs will be hyperlinked. Comments are not for promoting your articles or other sites.

    Click to Rate This Article