It's shady at best. Legal? I have no clue. Sounds like a good question for RobertEG.
IF they just sent you a dunning notice then they can not charge you a dime to validate the debt as the burden is on them to prove you owe a debt if you requested validation in a timely manner.
IF its well past the 30 days then well I'm surprised they even responded. I wouldn't pay the $25 fee just for them to access their records to validate a debt. I would either put that money towards a PFD.
IF you do not recollect this debt all and it just popped up on your records even if its 10 years old, by them just now putting something on your reports means that they are to supply a dunning notice and give you the right to ask for validation.
Were you aware of this debt from before? has it been lingering and your just now asking for them to validate?
If the collection was ADDED in 2007 even if they never sent you a dunning notice then you'll pretty much be in a crapshoot trying to force them to validate.
IF the DEBT was from 2007 and they just reported it, then they have no basis for charging a fee for validation even if it was from 2007 - its not YOUR fault they didn't try to collect until now, its theirs.
Also if its been on since 2007, let this be a lesson why you should check your reports AT LEAST yearly, if not more often - especially if your denied credit and/or not given the best terms.
Either way, the collecton is 5 years old going on 6 years - is it perhaps beyond SOL for your state? If it is, then you could probably just work on a PFD settlement thing for 10-25% of the debt.
You didn't mention though, do you REMEMBER this debt or were you just hoping to have them delete it if you asked for validation. If you don't recognize it then you could dispute it on that basis - I'm not promoting disputing debts you know are valid, however if you do not recognize this debt and nothing was sent to you, a dispute with the CRA could be in order and if they aren't willing to just validate to you, they may not be willing to validate it to the CRA.
Ok so its well beyond the SOL - that is GOOD NEWS.
How much is the debt we're talking about? $100, $1000, more?
since its outside of SOL, then really all you NEED to worry about is it being on your reports either now or later. You don't need to worry about them trying to sue so really you have far more leverage than they do.
Either way since its beyond the SOL I would not offer them 100%. If they haven't been actively trying to collect on this debt, they probably know its beyond the SOL and they probably think they aren't going to get a dime out of you at this point anyways. I would send an initial offer of 10% with a reminder that they have no leverage in regards to a lawsuit and though you do not recognize this debt you'd like it off your reports now rather than having to wait 2 more years and it being automatically being removed and them loosing ALL leverage they have in regards to collecting this debt.
If they are smart they'll see it as they can make some money without having to do anywork and will take it. I wouldn't go above 50% on a settlement at this point (unless you plan on moving out of Texas). After a year and its still not settled start again at 10% and see if they'll bite, slowly making your way up to 50% and then stop making offers.
Then once it comes off your reports, offer them 10% again. If they refuse - then they have a very poor business model.
A DV is for the CA, not for the OC. Do a direct dispute with the OC. That way it falls on them to validate the debt.
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