You have two options. You can send a DV, or you can dispute the accuracy of their reporting.
If you send a DV, provided it is timely (i.e., they have either not sent dunning notice, or you are still within 30 days of their dunning notice), it will invoke an automatic cease collection bar on them until such time as they choose to provide the requested debt verification. However, even if they cant verify, they could choose simply not to respond, leaving you in limbo. Probably not the best path if you have a legitimate basis for dispute.
If you dispute, you must first have a legitimate basis for challenging the accuracy of their reporting. Just asserting "account or debt not mine" is usually very flimsy, but in view of their statement to you that they have no records to support the collection, it might pass. They must investigate the accuracy, and if upon their investigation they still agree that they have no supporting documentation, they must then promptly report its deletion to the CRA.
A dispute, unlike a DV, has a set period in which they must either verify, correct, or delete the disputed information. I would suggest sending your dispute directly to the debt collector rather than disputing through a CRA, as disputes made through a CRA dont forward all of your supporting documentation and arguements to the debt collector, so your basis for dispute will be reduced to a check-box on their e-OSCAR form.
Sample direct dispute format, sent directly to the debt collector, not the CRA:
“This is a Notice of Direct Dispute with you, under the provisions of FCRA §623(a)(8)(D), of the accuracy of information you have reported to my credit file.
► (If sent to a debt collector, (CA), it might be beneficial to also include the blurb:
“This is a direct dispute of credit reporting. This is not a request for debt
validation/verification under FDCPA §809(b).”.
(don’t let them just simply sluff it off as a DV letter)
“In compliance with FCRA §623(a)(8)(D), and enacting regulations published at 16 CFR § 660.4, this Notice of Direct dispute includes:
“Identification of the specific information being disputed:
(specify the account number, and the specific information that is disputed under
that identifying account)
“Basis for the dispute:
(how the reporting was inaccurate; was any reporting in violation of any statutory or
regulatory provisions? account or express agreements? CRA reporting gudelines? Account not
yours? etc.)
“Supporting documentation:
(all documents that support your dispute; it is recommended to include,
as part of your documentation, at least a copy of the portion only of your
recent credit report showing the disputed information was
actually reported to your credit flle. The implementing rule suggests a showing
that it appeared in your credit report)
