We have recently seen a rise in the number of plaintiff's attorneys and regulators challenging long standing language found in the initial letters for many agencies. Does this look familiar?
Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt or any portion thereof, this office will assume this debt is valid. If you notify this office within 30 days from receiving this notice, this office will: obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.
If this is your language, be on the look-out for legal challenges. The latest wave of class action suits are rooted in the FDCPA disclosures under section 1692g(b) – with the plaintiff attorneys claiming the description of the 30-day notice requirement is confusing to the “least sophisticated consumer.”
In Yrok Gee Au Chan v. North American Collectors, Inc., the court found the language failed to inform the consumer that he must dispute the debt in writing to preserve his right to receive verification of the debt. The court further ruled that the validation notice failed to notify the consumer that any portion of the debt can be disputed to trigger the right to receive a verification.
Similarly, the court in Baker v. G.C. Servs. Corp. found fault with the following language under an analysis of section 1692g(a)(4): “Verification of this debt, a copy of judgment or the name and address of the original creditor, if different from the current creditor, will be provided if requested in writing within 30 days. Otherwise, the debt will be assumed to be valid.” The Baker court found the language failed to provide notification the consumer may dispute the validity of the debt, or any portion thereof.
Special care should also be taken when referring to the writing requirements for disputes. On May 29th, the Second Circuit Court of Appeals in Hooks v. Forman, Holt restored a previously dismissed case and determined that the FDCPA allows a consumer to verbally challenge a debt in certain instances and that validation notices that failed to recognize the distinction may violate section 1692g(a)(3). The court reviewed the initial collection letter that provided in part: “Unless you notify us in writing within thirty (30) days after receipt of this letter that the debt, or any part of it, is disputed, we will assume the debt is valid.”
Recognizing a split in the circuits between the Third Circuit in Graziano v. Harrison (finding a writing requirement) and the 9th Circuit going the other way in Camacho v. Bridgeport Financial, the Hooks Court concluded; “The language of section 1692g(a)(3) does not incorporate the writing requirement specifically included on other sections of the same statute . . . . We see no reason to ignore this difference in statutory language.”
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