Fair Debt Collection
One of the most important sections within the Fair Debt Collection Practices Act, or FDCPA, is section g, which describes the debt dispute and validation process, including the precisely worded notice that you must be given about your rights. This section is the FDCPA’s most technical, and unlike most other sections which include intuitive violations, this section covers concepts the average consumer usually doesn’t recognize. So anytime you hear from a debt collector or see one on your credit report have the collection account reviewed by an experienced Fair Debt attorney, your money is too important to just guess as to whether your rights have been violated.
To begin, the act requires, within five days of the debt collector’s initial communication with you, that the collector send you a letter that advises you, amongst other things, of the amount you allegedly owe, whom you allegedly owe, and a statement advising you that if you dispute the debt or any portion of it within thirty days, that collections will cease until the debt is validated. This letter is called the “initial G” and these “G rights” can be used to end the collection of unsubstantiated debts.
This section further restricts the collector’s ability to scare you into waiving these rights by prohibiting any behavior, within this thirty day dispute period, which overshadows or is otherwise inconsistent with your right to dispute the debt or request validation. One obvious example of overshadowing could be the collector sending you a G letter that contains your G rights but nonetheless threatens immediate consequences if you don’t pay the debt sooner than the thirty days. Again, this is a complicated section and you should make it a habit to exercise your G rights by disputing all debts within this thirty day time frame as well as have all initial G’s reviewed by an FDCPA attorney. If a debt collector violates your G rights, he may be penalized and have to you a monetary award, even where you suffer no harm. The debt collector also has to pay your attorney fees, meaning you can usually enforce your FDCPA rights at no cost to you.
And even if the FDCPA doesn’t apply or wasn’t violated for one reason for another, the collector or someone else in the account chain may have violated other rights of yours, for example, the account could be improperly credit reported in violation of the FAIR CREDIT REPORTING ACT or they could be using a dialer to ring your phone in violation of the TELEPHONE CONSUMER PROTECTION ACT. Things like collection letters, collection voice mails, collection call logs, and detailed notes of conversations with collectors, as well as credit report entries showing collector pulls and reporting, can each form powerful evidence in the fight against debt collection and help you to level the playing field.
1692g(a) Notice of debt; contents
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.
Analysis
The debt collector is not required to provide more than one notice for each debt. And although the FDCPA imposes no requirements as to the form, sequence, location, or type size of the notice, an illegible notice does not comply with this provision. The notice need not identify the original creditor, only the current creditor, but as little as one wrong word may render the notice in violation of the FDCPA, so collection letters can be gold.
1692g(b) Disputed debts
If the consumer notifies the debt collector in writing within the thirty-day period described in subsection (a) that the debt, or any portion thereof, is disputed, or that the consumer requests the name and address of the original creditor, the debt collector shall cease collection of the debt, or any disputed portion thereof, until the debt collector obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor, is mailed to the consumer by the debt collector.
Collection activities and communications that do not otherwise violate this subchapter may continue during the 30-day period referred to in subsection (a) unless the consumer has notified the debt collector in writing that the debt, or any portion of the debt, is disputed or that the consumer requests the name and address of the original creditor. Any 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 or request the name and address of the original creditor.
Analysis
A debt collector must verify a disputed debt even if he has included proof of the debt with the first communication, because the section is intended to require the collector to conduct an investigation based on the dispute itself.
Importantly, however, debt collectors can take legal action during the thirty (30) day period for disputing a debt, provided the collection activity does not overshadow and is not inconsistent with the consumer’s right to dispute. Specifically, the FDCPA treats these thirty-days as a period within which the consumer (debtor) may insist that the collector verify the debt, and not a grace period that prohibits collection efforts. However, once you dispute a debt in writing, ALL collection actions must cease until the collector validates the debt in accordance with this section.
Bill collectors are usually able to validate debts fairly quickly on delinquent accounts less than a few years old. However, as the debt ages it becomes harder to validate because the original creditor may have deleted some accounts or the records have been lost or misplaced due to the business being sold or it went out of business. Another reason is debts are sold on the junk debt circuit so many times, the original creditor information may have been lost along the way.
This means often times when a consumer demands validation information, the current creditor is unable to or otherwise fails to respond to the collector in a timely manner. This could be for a variety of reasons, including lost records, deleted accounts, sold/transferred debts, and so forth. And although there is no time limit on responding to the consumer’s dispute, quite often collectors are unable to obtain the validation required by the FDCPA so just they drop the account. When they do this, they are NOT required to inform you of this so you never hear from them again. However, you will hear from the new collector who holds the account; when this happens, repeat your dispute.
If you are sued within the thirty day period, be prepared to show the judge proof of your dispute and mention that the collector failed to respond with the proper validation as required in the FDCPA. Provide certified copies of all documents backing up your story. Often, the judge will stay the case order the collector not to return until complying with the validation requirements of the FDCPA. Remember, collectors can pursue collection actions, including court action, while waiting on you to dispute a debt, so it’s imperative that you dispute a debt immediately.
1692g(c) Admission of liability
The failure of a consumer to dispute the validity of a debt under this section may not be construed by any court as an admission of liability by the consumer.
Analysis
They can continue to collect if you don’t dispute, but that you didn’t dispute is not admissible evidence in a collection lawsuit.
1692g(d) Legal pleadings
A communication in the form of a formal pleading in a civil action shall not be treated as an initial communication for purposes of subsection (a).
Analysis
A debt collection lawsuit against a consumer (including the filing of a complaint or service of legal papers by an attorney in connection with a lawsuit to collect a debt) is not a “communication in connection with collection of any debt,” and thus does not confer section G notice-and-validation rights on the consumer.
1692g(e) Notice provisions
The sending or delivery of any form or notice which does not relate to the collection of a debt and is expressly required by title 26, title V of Gramm-Leach-Bliley Act [15 U.S.C. 6801 et seq.], or any provision of Federal or State law relating to notice of data security breach or privacy, or any regulation prescribed under any such provision of law, shall not be treated as an initial communication in connection with debt collection for purposes of this section.
Sample Debt Collection Letter
| 404 Liberty Street Trenton NJ, 08650 August 16, 2002 Creditor: McKorner Furniture Account Number. 123456789 Dear Mr. Nopay: This letter is notice of our efforts to collect the overdue payments on the above account. We must advise you that we have prepared a lawsuit which will be filed against you in exactly 7 days from the date of this letter if we have not heard from you within that time frame. We must also advise you that we fully intend to pursue garnishment of wages, liens against property, and the attachment of all financial assets and that the cost of these actions, the lawsuit and any statutory interest charges will be added to the amount owed above. Sincerely, Bill A. Collector |
In the above letter there are at least four specific FDCPA violations. Can you spot them?
- There is no notice of “G” rights in the letter;
- The mini-miranda isn’t provided;
- It is illegal (overshadowing) to threaten a lawsuit in seven days when the suit will not (or cannot) be filed for several weeks; and,
- The threat of garnishment/lien/attachment, without first having a judgment.
(Pub. L. 90–321, title VIII, § 809, as added Pub. L. 95–109, Sept. 20, 1977, 91 Stat. 879; amended Pub. L. 109–351, title VIII, § 802, Oct. 13, 2006, 120 Stat. 2006.)