Diligence LetterCredit Repair Definition
A formal communication, often from a debt collector, providing detailed information about a debt.
Definition
A diligence letter, in the context of debt collection, is a communication sent by a debt collector or creditor to a debtor providing detailed information and documentation regarding an outstanding debt. This often occurs in response to a debtor's request for debt validation or as part of the collector's own due diligence process before pursuing more aggressive collection actions like lawsuits. A comprehensive diligence letter might include copies of the original contract, account statements showing the calculation of the balance (including interest and fees), proof of the collector's authority to collect, and other relevant documentation supporting the claim. It aims to satisfy legal requirements (like those under the FDCPA for validation) and demonstrate the legitimacy of the debt.
Frequently Asked Questions
Is a diligence letter the same as a debt validation response?
It often serves the same purpose. When a debtor requests debt validation under the FDCPA, the collector's response providing the required verification information can be considered a diligence letter. The term emphasizes the collector's effort (diligence) in gathering and providing proof.
What information should I look for in a diligence letter?
Review the letter carefully to ensure it provides: clear identification of the original creditor, the account number, documentation linking you to the debt (like a signed agreement), a detailed breakdown of the amount owed (principal, interest, fees), and proof that the current collector has the legal right to collect the debt.
What if the diligence letter doesn't adequately prove the debt?
If the information provided doesn't sufficiently validate the debt according to FDCPA standards, the collector may not legally be able to continue collection efforts. You can inform the collector in writing why you believe the validation is insufficient and reiterate that they must cease collection until proper validation is provided.
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