Collection agencies and collectors – BE VERY CAREFUL. An unpublished opinion from from the United States District Court from the Northern District of Ohio called Jerman v Carlisle, McNellie et al at 2006 U S Dist LEXIS 85339 held that a debtor’s demand for verification of the debt does not have to be in writing in order to be effective.
As you are probably are aware, the Fair Debt Collection Practices Act requires third party debt collectors to send a validation notice to the consumer within 5 days of the collector’s initial communication (15 USC 1692g). While a debt collector’s notice to the consume must be in writing, the consumer’s demand for verification of the debt does NOT need to be in writing.
So whats the problem, here?
There are a great number of debt collectors, including attorneys, who think that if a debtor gets a letter with a scary tone, that it will shock the debtor into paying the debt…yeah…right…wake up!!!! By drafting language in the validation notice that is different than the safe harbor language of 15 USC 1692g, all the collector is doing is opening himself up to lawsuit by the debtor. This lawsuit is not only a fund raiser for the debtor, but an especially happy time for the debtor’s attorney who knows that the collection agency or attorney who dared to be creative with the validation notice, will end up paying the debtor’s attorney’s fees. Why should a collector then get creative with his demand letters, you ask? The short answer is, he shouldn’t. It’s just ego doing the drafting of a validation notice that does not track, word for word, the safe harbor provisions of 15 USC 1692g. Collectors, including attorneys, here’s a message for you….this is just business, its not ego. Yeah, yeah, I know. The client expects to be dazzled by your brilliance and fine command of the English language. I have a better idea….How about protecting the client from lawsuits under the FDCPA that are completely avoidable? Draft your validation notices carefully, plainly and very very simply. After all, the standard that courts use to determine whether the FDCPA has been violated is the “least sophisticated consumer.” (Translation – “drooling idiot”). If you letter can trick a drooling idiot into thinking that his rights are different than what they are, you have violated the FDCPA. Now, we all know that consumers are not drooling idiots. Some of my best friends are consumers and they don’t drool. You don’t want to look like a drooling idiot in front of your client when she asks you about the lawsuit that she was served with because the validation notice that you drafted does not comply with FDCPA.
Moral of the story/case – The FDPCA does not require that consumers respond in writing in order to protect their rights. Don’t tell consumers that they must send their disputes in writing in order demand validation of the debt.
Note to my fellow collection attorneys – I know that this case is not a published opinion. Big deal, right? Wrong. The court went through a very interesting analysis in which it analyzed cases that held that a consumer’s demand for validation must be in writing. See Graziano v Harrisoni, 950 F2d 107 (3rd Cir 1991). The court sided with the majority of district courts that held that a plain reading of the FDCPA imposes not such writing requirement upon the consumer. I think that this is the better reasoned approach.