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Keep it Simple: Use the Fair Debt Collection Practices Act to your advantage.

By: Robert R. Musick and Mark R. Colombell

We learn a lot about the Fair Debt Collection Practices Act (“FDCPA”) from litigation. Despite the fact that the FDCPA contains only 18 sections and can be read in less than 15 minutes, it is far from being the model of legislative clarity. Keeping it simple is often the best practice when it comes to staying in compliance.

Recently, a federal District Court Judge in Virginia denied a collector’s attempt to dismiss a lawsuit based on language contained in a dunning letter. In Bicking v. Law Offices of Rubenstein and Cogan1, the defendant law firm mailed a dunning letter to the plaintiffs with the following validation notice:  

CONSUMER NOTICE PURSUANT TO 15 U.S.C. SECTION 1692(G)[sic]2 Unless you notify this office within thirty (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 thirty (30) days from receiving 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, within thirty (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. This is an attempt to collect a debt and any information obtained will be used for that purpose. This letter is from a debt collector.

The law firm left out the words “in writing” in their validation notice. Plaintiffs’ counsel argued that the notice failed to inform the consumer that in order to obtain validation of the alleged debt and/or the name and address of the original creditor the request had to be in writing, thus running afoul of 15 U.S.C. § 1692g(a)(4) and (5) and § 1692e(10)3. The law firm argued that it would have honored a verbal request for validation and therefore the plaintiffs did not suffer harm. The judge did not agree with the law firm and pointed out that the notice provided deviated from the requirements of the statute; and therefore, the notice likely violated the FDCPA4.

Unlike other consumer protection statues, the Truth in Lending Act (“TILA”) for example, the FDCPA does not contain any safe harbor forms. However, Section 1692g is as close as you will come to finding a safe harbor in the FDCPA, so why not use it? Section 1692g states the following:

Within five days after the initial communication with a consumer in connection with the collection of any debt, a debt collector shall, unless the following information is contained in the initial communication or the consumer has paid the debt, send the consumer a written notice containing-- (1) the amount of the debt; (2) the name of the creditor to whom the debt is owed; (3) a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector; (4) a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector; and (5) a statement that, upon the consumer's written request within the thirty-day period, the debt collector will provide the consumer with the name and address of the original creditor, if different from the current creditor.

15 U.S.C. § 1692g(a).

The FDCPA does not require that a validation notice use the exact language from the statute. However, don’t open the door for plaintiffs’ attorneys by trying to be creative. Taking the language directly from the statute greatly reduces the likelihood of the plaintiffs bar challenging your notice.

Unfortunately for the law firm, this case will go forward; and, did I mention that this is a class action?

1 Bicking v. Law Offices of Rubenstein and Cogan et al., 2011 U.S. Dist. LEXIS 48623 (E.D.Va. May 5, 2011).

2 You will also note that the notice incorrectly cites the applicable statute, which should read 15 U.S.C. 1692g, not 1692(G), a distinction that was not lost on the court.

3 FDCPA § 809(a)(4) and (5); § 807(10).

4 At this stage in the litigation the court was not making a ruling on the merits of the plaintiffs’ claim. The court simply determined that the plaintiffs have alleged enough facts that, if proven, could constitute a violation of the FDCPA.

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Robert R. Musick is the Virginia Compliance Chair for ACA International and concentrates his practice in consumer financial services and civil and commercial litigation. Bert is a Director at ThompsonMcMullan, P.C. and may be contacted at 804.698.5924 or bmusick@t-mlaw.com.

Mark R. Colombell concentrates his practice in consumer financial services and civil and commercial litigation.Mark is a is a Director at ThompsonMcMullan, P.C. and may be contacted at 804.698.6251 or mcolombell@t-mlaw.com.