Daily Decision Deep Dive: Sending Multiple Letters With Validation Language Could Overshadow the Validation Period

Two collection notices sent during the 30-day validation period could leave the least sophisticated consumer confused.

11/16/2018 10:30 AM

FDCPAIndustry Advancement ProgramNews
Daily Decision Deep Dive: Sending Multiple Letters With Validation Language Could Overshadow the Validation Period

Maloney v. Alliance Collection Agencies, Inc., No. 17-CV-1610, 2018 WL ------- (E.D. Wis. Nov. 6, 2018)

A debt collector sent two validation notices to the consumers within the 30-day validation period. Each notice contained the following language required under the FDCPA:

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 in writing within 30 days from receiving this notice that you dispute the validity of this debt, or any portion thereof, 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 of 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.

The consumers claimed that receiving two such notices within the 30-day validation period was confusing; potentially leaving recipients unsure as to how many days remained to dispute the debt. The consumers also alleged that the second notices left them unsure of whether the 30-day validation period applied to all the debts listed or only those for which they had not received prior validation notices. The debt collector moved to dismiss the consumers’ claims, arguing the letters did not violate the FDCPA.

In considering the merits of the consumers’ claims, the court turned to the plain language of § 809 of the FDCPA, which states in part, “[a]ny collection activities and communication during the 30-day period may not overshadow or be inconsistent with the disclosure of the consumer’s right to dispute the debt . . . .” The court observed that the collector’s first notice stated that the debt collector would validate the debt if disputed within 30 days. Likewise, the second notice, sent within 30 days of the first, said the same thing. Based on this, the court reasoned that “when receiving the second notice, an unsophisticated consumer might be confused as to how much time remains to dispute the debt. Similarly, the notices sent to [the consumer] listed new debts in addition to the original debts, and repeated the language from the first notice regarding the 30-day validation period. There is at least a possibility that a consumer would be confused as to whether the new 30-day period applied only to the newly listed debts, or also to the debt in the first notice.” This confusion, the court asserted, could lead an unsophisticated consumer to wait until after the original 30-day validation period to dispute the original debt, unknowingly forfeiting the statutory right to compel the debt collector to cease collection and validate the original debt.

The debt collector argued the second letter was not false or misleading because the consumers had not alleged that the debt collector would not honor the new 30-day validation period. Rejecting this line of reasoning, the court opined that even if the debt collector was willing to honor the new 30-day validation period, it would not be apparent to a consumer upon receipt of the letter. Furthermore, the court observed that choosing to validate a debt does not absolve a debt collector of liability for misleading a consumer about her rights. The court asserted, “There is a real risk that [the debt collector’s] second notice could mislead an unsophisticated consumer into forfeiting her rights under the FDCPA. The unsophisticated consumer is likely not aware that she has a statutory right to dispute the debt within 30 days of the first notice, and that doing so will require the debt collector to cease collections activities while the verification is pending . . . Thus, a consumer who receives a second notice may reasonably wait until after the initial 30-day period to dispute the claim. In doing so, she unknowingly forfeits the statutory right to dispute the debt and trigger the ceasing of collections activities required by the statute.” Accordingly, the court denied the debt collector’s motion for judgment on the pleadings, finding there was reasonable chance that an unsophisticated consumer would be materially confused by the notices.

Coleman June Web

ACA International attorney member June Coleman of Carlson & Messer LLP offered the following analysis of the court’s decision: Courts have repeatedly held that offering more time or offering to accept disputes orally in the validation notice is a violation, even if it appears consumer friendly.  This is because even though you promise to treat it as a written dispute within the 30 day period, ultimately, the law only provides certain protections if the dispute letter is in writing and within the 30 day period.  And you can imagine the possible arguments that might be made about including more than one debt on the initial 1692g notice.  Although it is more costly to have a first letter and a second letter, and to program your systems to handle how to send an initial 1692g first letter when you have multiple accounts, it ends up being less expensive than defending one or more FDCPA individual and class action lawsuits.  My advice would be to send a single initial 1692g letter for each debt to reduce the risk of consumer litigation.

June Coleman may be reached at:

Carlson & Messer LLP

5901 W. Century Blvd.

Los Angeles, CA 90045


(916) 287-4212

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