Why is the Original Creditor needed?

Identifying the original creditor that a collection agency is attempting to collect on is vital.  There are several reasons why, with the most important that you make sure that a collector has the right to collect on a debt.    

• Protect Yourself!  Before you attempt to resolve a debt with a collection agency, you must verify that this is an account that you actually owe and that the collection agency has the right to collect on this debt.  Not all Collection Agencies own your debt – many collection agencies are only hired by the Original Creditors to collect on the debt that the Original Creditor still owns.  It is common practice for Original Creditors to hire several different Collection Agencies to attempt to collect on the debt.  Before you settle any debt, you need to make sure the Collection Agency still have the right to collect on the debt
• UGotiate UGuidance:  By identifying your original creditor with UGotiate, you will receive more accurate guidance and tips in regards to negotiation strategies, settlement averages/trends and industry standards.  UGotiate tracks recent resolutions not only by collection agencies, but also but the original creditors - so it is important to include this info in your creditor list to ensure you receive the best guidance available. 
• A collection account could be sent back to the original creditor.  This does happen from time to time - that the original creditor will take back an account from a collection agency to handle directly.  So, it’s important to identify who the original creditor is as soon as possible so that you will not be in the dark months down the road if the account is sent back to the original creditor and you start receiving letters and/or calls from them.

Tips to identify the Original Creditor

If you are looking at a collection letter and can’t find the original creditor’s information, it’s okay.  Some collection agencies include the original creditor’s name and account number on each letter that they send you, while others don’t.  If you don’t know the original creditor for one of your collection agency accounts, just skip that step for now – but it is VERY important to research this and log back in to update this info as soon as you have it.

• Validation of Debt Request (VOD):  Each time you indicate in the system that one of your accounts is with a collection agency, you will be prompted to send the collection agency a letter requesting that they validate that the debt is yours and that they have the right to collect on this debt.  Collection agencies are not required to respond to your VOD, but if they do not send you documents validating the debt, they can no longer actively collect on the debt (they cannot call you or send you collection letters).  If the collection agency does validate the debt properly, they will likely send you documents with the original creditor name and account number.  Once you have this info – enter it into Ugotiate right away!  If the creditor does not validate the debt, you will have to try another way to get the original creditor info… keep on reading for additional suggestions!
• Research your records:  Do you have statements from your original creditors filed away?  If so, grab your statements - compare them to the collection letters - and try to identify which original creditor is tied to which collection agency. Some collection agencies will list the original creditor account number on their letters – or at least the last 4 digits – you may be able to match it up that way. 
• Request a copy of your credit report: You may be able to match your original creditor accounts to your collection account by looking at your credit report.  You can request a free copy of your credit report at www.annualcreditreport.com
• Call the collection agency:  This is the least recommended option – but it is a possibility should you choose to use it.  If you do choose to call a collection agency, it is suggested to keep it short and simple.  Let the collector know right away that before you discuss any aspect about this account, you need to know the original creditor name and account number.  Request that they verbally provide you the info now and also mail you a letter with the info for your records.  It is very likely that the collector will try to engage in you in conversations about paying this debt, to set up payments – they will likely try to get whatever information they can out of you.  Again – keep it short and sweet – let the collector know that you are willing to resolve this debt, eventually – but you need to have some information first.  For more details on handling creditor phone calls, take some time to read through the Phone Call Scripts.