What is an “itemized statement” for debt collection purposes?

Southern is a third party debtor collector as defined by the federal Fair Debt Collection Practices Act (FDCPA) and as such we have certain legal obligations when a consumer disputes a debt.  Case law has long been settled that in order to validate the debt, a debt collector must provide proof or evidence that the obligation or debt is correct and owed by the consumer.  The questions arise; What is a dispute?  What is an itemized statement?

A dispute can be almost any reason a consumer gives for not owing the bill.  “My insurance should have paid that”, “I never got those services”, “The car broke down two months after I bought it so I am not going to pay”, “Health care should be free and the hospital charges too much”.  And thousands of other things we have heard all constitute a “dispute” under the FDCPA.  It doesn’t matter if they never disputed to your office prior to assignment, and it doesn’t matter if they did dispute to your office and you already sent all the documentation needed to prove the debt.  A consumer has rights under this federal law and we generally cannot proceed with collection until and unless we validate the debt.  Please keep in mind the FDCPA is a “consumer protection law” and not designed in any way to favor creditor rights.  So if the consumer disputes, we are required to respond.

An “itemized statement” should be a plain-language document in some accounting method that demonstrates the charges and credits for this debt and MUST equal the amount originally sent for collection.  A list of invoice numbers on a disputed debt does NOT provide enough information for a consumer to validate the debt.  A bookkeeper telling us over the phone “They owe the bill and never disputed it before” does NOT validate the debt.  A statement showing “Balance Forward” does NOT validate the debt.  We must see the charges, credits or payments, and the balance must match the same amount sent to collections.  Any signed contract or authorization goes a long way to providing evidence of the debt being owed as well.  When you see a request for an “Itemized Statement” from our office, we are fulfilling our legal compliance obligations under the FDCPA and trying to move forward to collecting your debts.  Please keep in mind it doesn’t matter what your office sent prior to assignment, the FDCPA sets forth a whole new set of rights for a consumer and obligations for a debt collector, and we must meet those standards or we will not be able to collect your debt, and may also face legal peril.

If you have any questions or concerns over our requests for documentation or are not sure what an itemized statement is or is not, please feel free to contact our Client Consultants for more assistance!

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