Debt “prove it” letter

You may find yourself in a situation where you are being chased for a debt that you do not think you owe. Debt collection agencies will send letters to people with the same name, in the hopes that one of them will pay up. It is up to the debt collection agency to prove that you owe the money, and not for you to prove that you do not owe it.

National Debtline have put together a template letter to send to debt collection agencies, asking them to prove that the debt is yours.

Dear Sir/Madam

Account No: xxxxxxxxxxxxxx

You have contacted me regarding the account with the above reference number, which you claim is owed by myself.

I would point out that I have no knowledge of any such debt being owed to CREDITOR

I am familiar with the Consumer Credit sourcebook of the Financial Conduct Authority (FCA) which states the following rules.

“A firm must not ignore or disregard a customer’s claim that a debt has been settled or is disputed and must not continue to make demands for payment without providing clear justification and/or evidence as to why the customer’s claim is not valid.” 7.5.3

“A firm must suspend any steps it takes or its agent takes in the recovery of a debt from a customer where the customer disputes the debt on valid grounds or what may be valid grounds.” 7.14.1

“Where a customer disputes a debt on valid grounds or what may be valid grounds, the firm must investigate the dispute and provide details of the debt to the customer in a timely manner.” 7.14.3

“Where there is a dispute as to the identity of the borrower or hirer or as to the amount of the debt, it is for the firm (and not the customer) to establish, as the case may be, that the customer is the correct person in relation to the debt or that the amount is the correct amount owed under the agreement.” 7.14.4

“A firm must provide a customer with information on the outcome of its investigations into a debt which the customer disputed on valid grounds.” 7.14.5

“Where a customer disputes a debt and the firm seeking to recover the debt is not the lender or the owner, the firm must:
(1) pass the information provided by the customer to the lender or the owner; or
(2) if the firm has authority from the lender or owner to investigate a dispute, it must notify the lender or owner of the outcome of the investigation.” 7.14.6

In not ceasing collection activity whilst investigating a reasonably queried or disputed debt you are using deceptive/and or unfair methods.

Furthermore, ignoring and/or disregarding claims that debts have been settled or are disputed and continuing to make unjustified demands for payment amounts to physical/psychological harassment.

I would ask that no further contact be made concerning the above accounts unless you can provide evidence as to my liability for the debt in question.

I await your written confirmation that this matter is now closed. Otherwise I will have no option but to make a complaint to the trading standards department and consider informing the FCA of your actions.

If appropriate I will also take this matter forward as a complaint to the Financial Ombudsman Service and Information Commissioner’s Office.

I look forward to hearing from you.

Yours faithfully

(Type your name, DO NOT SIGN IT)

Once you have sent the letter, you may receive a response telling you that they have traced the debt to you. You can disregard this, as they need to provide proof, which should be the original credit agreement with your signature. This is why you shouldn’t sign the letter, as this could be used to re-create the original credit agreement.

If you genuinely do not owe the debt, you should receive a letter saying that they have dropped it and you will no longer be contacted. If you do owe the debt then you should look at ways to pay it back, whether this be in a lump sum or installments. If you need any further help then Step Change are a fantastic debt charity who offer free advice to those in debt. They can help you negotiate with your creditors and reach a suitable payment plan.

Within the past 6 months, we have had to use this letter ourselves in regards to a supposed debt with Three. After sending the letter, we received a response simply stating “we have traced the debt back to you”, with a deadline to respond by. When we didn’t respond we received a letter telling us that the matter is now settled. This “prove it” letter does work with creditors.