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12.10.15 by Andrew Shafer


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The FDCPA requires that within five days following the initial communication with a consumer, the collection agency must send a validation notice that complies with 15 U.S.C. 1692g. The statute requires five pieces of information be included in the validation notice. They are:

1) The amount of the debt (including any pre-judgment interest allowed by the agreement creating the debt);

2) The name of the current creditor who owns the receivable;

3) A statement that the collection agency will presume the debt is valid unless the consumer disputes the debt within 30 days after receipt of the validation notice.  Note, there is no requirement that the Consumer dispute the debt in writing;

4) A statement that if the consumer disputes the debt in writing within the 30 day period, the creditor will obtain verification of the debt and will provide the Consumer with a copy of any judgment entered on the debt; and

5) A statement that if the consumer sends a written request within 30 days of receipt of the validation notice, the collection agency will identify the original creditor if different than the current owner.

A brief survey of FDCPA class action claims shows that the vast majority of these claims stem from 1692g violations [faulty validation notices] because if an agency has violated the statute with one consumer, it likely committed the same violation with many others.  The class action rules were written with this type of claim in mind (one mistake replicated hundreds or thousands of times, affecting hundreds or thousands of consumers).

Overshadowing is, by far, the most common alleged FDPCA violation on which class actions are based.  What is overshadowing?  Simply, it is talking out of both sides of your mouth. On the one hand, you provide the consumer with her statement of rights. On the other, you demand she pay the bill to avoid “further collection actions” [or some other cryptic threat that clouds over a sunny day].  If a least sophisticated consumer would be confused by the two statements, you have overshadowed the validation notice and you have stumbled into the world of class action defense.

How do you avoid overshadowing?  In an ideal world, the validation notice would not include any demand for payment. That would come in the second letter which you would not mail until at least 33 days after you mail the validation notice.

However, we all know that the collection industry does not live in an ideal world. So, how can you invite payment without overshadowing the consumer’s notice of his rights?  While we discourage clients from having the validation notice do double duty, if the agency insists on seeking payment, it is critical to include a notice containing additional language to make it clear to the least sophisticated consumer that his right to demand validation is not affected by the payment demand. Regardless of how you request payment, it is essential that you add a statement that unambiguously alerts the consumer to the fact that his right to demand debt validation is absolute. Consider adding a sentence such as: “Nothing contained in this notice is intended to limit or restrict your rights under federal and/or state law to demand we validate debts for you; that we provide you with a copy of any judgement entered agasint you and that we advise you of the current holder of the debt if you request the same in writing within 30 days of your receiving this notice.”  We suggest that this language stand out by bolding it or putting it in all caps.