On May 16, 2019, Judge Arleo of the District of New Jersey reversed herself and released her latest opinion in Poplin v. Chase Receivables approving a statutory G notice initial debt collection notice.
Sessions, Fishman, Nathan & Israel was successful in convincing the Court to reverse its previous denial of a motion to dismiss, grant summary judgment, and dismiss the case.
In a rare reversal, the Court issued a more reasoned decision and ruled that the validation language in the initial collection letter that tracked the FDCPA was effective to convey to consumers their dispute rights. Unlike every other circuit, the Third Circuit (which covers Pennsylvania, New Jersey, and Delaware), has determined that a dispute must be submitted in writing to be legally effective to avoid the presumption of the validity of the debt.
There has been a flood of litigation surrounding the validation notice in the Third Circuit. Consumer attorneys continue to contend that the statutory validation notice is insufficient to convey to consumers that a dispute needs to be submitted in writing to be effective.
Decisions in the New Jersey and Pennsylvania federal courts have been mixed -some finding that using the statutory notice is enough, some finding that it not- all too frustrating for debt collectors trying to comply with the law.
There are several cases now on appeal before the Third Circuit that are expected to ultimately decide this issue. In addition, the CFPB released its notice of proposed rulemaking thatacknowledges the issue and proposes a rule that would clarify that a dispute may be made orally or in writing (contrary to the Third Circuit position). The CFPB has also proposed a model G Notice that would provide a safe harbor against litigation.
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