@Birdman First, let me clarify something that I think you are misunderstanding. The rights you have under the FDCPA for debt validation does not have a 30-day clock. If you look at section § 809, it states a consumer has 30 days from initial contact with the debt collector to request debt validation. Initial contact. This does not start from the first notice you receive from the collector. It starts after you have contacted the collector (ALWAYS by certified mail).
As an example, the letter I posted above....My girlfriend's son evidently forged her name on a Prompt Care form or listed her as an alternate guarantor. She didn't even know it existed on her credit report until she allowed me to start helping her with her credit. It was over 3 years old and Pheonix Financial was still badgering her via mail and reporting it. Once I contacted them (in her stead) and requested initial confirmation of the debt they were trying to collect, they sent me some crap typed up on their company letterhead with some numbers and dates adding up to almost $3,000. No original documentation, no signatures, nothing that proved the debt. From that point, our 30 day clock started, and I immediately sent the letter I shared above.
So....
Step 1: Once you have received notice from the collector stating their intention to collect a debt, or have noticed it being reported as a Derog, you contact the collector and ask them to explain what the debt is, and with who the supposed original contract was entered into.
Step 2: Wait for the collector's response. Once they have responded and given clear intention of the debt they are asking for and it is clear that mutual communication has started between you and the collector, NOW you have 30 days to request Debt Validation.
Step 3: Send your debt validation letter (again by Certified Mail). When they are unable to do so, send a 2nd validation letter repeating your request, explaining that they have not submitted proper validation. Then finally, send a 3rd and final request for proper validation. So, this process will take some time, as they have 30 days to respond between each request.
And this is where the beauty starts. HIPPA laws were created to protect the consumer and your rights to privacy. This also creates a series of Catch22's that puts collectors behind the proverbial 8-ball.
First, let me also make it clear....this only applies to medical debts. This does not apply to loans and credit card debts because they do not have to dance around HIPPA laws.
In addition, you should never ever ever ever communicate with these collection agencies by phone. Always by Certified Mail, so you have tracking and proof of communication. Along with that.....you can never (and I can't stress this enough) admit on any level that the debt is yours and you agree that you owe anything. You can not enter into an agreement with the collection agency to make any partial payment toward that debt, or else you have indemnified yourself to that debt, and debt validation is no longer an option.
So here are the Catch22's that will enable you to have the debts removed....
First: Paragraph 1 of the Debt Validation letter:
"I am requesting proof that I am indeed the party you ask to pay the debt, including documentation which shall include: the name of the patient, an original bill, a detailed statement of procedures, full accounting for the amount allegedly owed, the dates of the alleged services, and a copy of documentation that shows that there is some contractual obligation with my signature that is binding me to pay this alleged debt."
Doctors, hospitals, and healthcare organizations are restricted by HIPPA laws from distributing or selling any of your personal medical information for any reason whatsoever. Therefore, when they pass off medical debts to collection agencies, (and usually the debt is sold to the highest bidder, or in some rare cases, the doctor/hospital has some contract with a particular debt collector) they can not under any circumstance provide them with any "original documentation" which details any procedures you may (or may not have) received. This also means they will not have anything with your signature along with said procedures.
If the collection agency is able to provide ANY of this, then the doctor/hospital that provided it is already in the deepest s**t they can possibly be. They can then be sued and held for malpractice for violating your rights to privacy provided to you under the HIPPA laws. This is taken very seriously and will be pursued to the highest level. Therefore, the collector will never be able to effectively "validate" any debt.
Second: Right to Subrogation
This also directly ties together with the "original documentation" that can not be provided. The only way a collection agency has ANY right to subrogation to collect on a debt, is for that agency to be listed by name on the financial form that someone signs as a guarantor. Since this is never done, (again, like I mentioned before, because outstanding debts are usually sold to the highest bidder) that means the collection agency can also never provide proof of any such subrogation. They are not legally on the original contract and have no right to collect any debt.
Last point of interest: Statute of Limitations
As was the case for my girlfriend in this case with Pheonix Financial....the debt validation letter was only intended to have the Derog removed from her credit reports. Here in SC, the statute of limitations to legally pursue a debt is 3 years. Since that limit had already been surpassed, I was very quick to remind them of this in the last paragraph. This effectively meant, regardless of whatever crap they tried to do in any attempt to validate anything was irrelevant at this point, so they might as well not even try. So check your own state's Statute of Limitations if you have an old debt remaining on your CR's. In which case, you could just skip steps 1 & 2, and send a debt validation letter like the one above, making it clear the SoL has already expired and it would be in their best interest to stop reporting.
You are required to request debt validation 3 times. This proves you have taken ample steps to have proper validation submitted. (Which of course, the collection agency will never be able to do) At this point, if they do not respond again, which in most cases they won't....If you do not see the Derog removed within the next 2 months of reporting, that's when you contact the credit bureaus. Send a certified letter with copies of your communication with the collection agency, debt validation requests, etc. and ask for the Derog to be removed by all 3 bureaus. If they do not comply, that's when you start a case with the CFPB. This means you have proof of requested debt validation, no response within 30 days, and no removal of that debt from your reports. (And in our case, expired statute of limitations)
Added note: In most cases, (which is what happened with my girlfriend) they will never respond to your first request and immediately submit to removing the Derog without the 2nd or 3rd debt validation letters ever being sent. Because the collection agencies understand that if someone sends a letter this detailed, with full understanding of their rights under the FDCPA, FCRA, (and obviously without directly saying it, HIPPA Laws) or they must have a family attorney who has drafted this for them.....they already know, this is not the chicken to chase. There are many many other easier chickens to catch....they will abandon any further attempts with you. If the collection is sent back to the doctor/hospital, they will not spend the time to pursue it, and likely won't try to find another agency.
The collection agency likely bought your $3,000 debt from the hospital for $200 (pennies on the dollar) and is always wanting you to make an "arrangement" to pay partial total, because they will usually come out way ahead. And once you make an arrangement, you indemnify yourself if they ever decided to take you to court, and it also immediately resets the statute of limitations. The hospital was just happy that the collection agency bought the debt, so they can take it off their books. But by doing so, the collection agency also entered themselves into a debt contract (which is not legal) that they do not own. (Hereby incurring a debt to their own detriment) In laymans terms, they put themselves in harms way, so you can not be held accountable.
So, be prepared if necessary, to send many Certified letters. If it gets to the point that you have sent 3 Debt Validation letters, copies of all 3 letters to each bureau, and finally copies of all 6 letters to the CFPB....you're going to spend a little money, but.... the Derogs will be removed.