NCO Group Gets Collection Letter FDCPA Class Action Dismissed

A federal judge in Pennsylvania last week dismissed a proposed class action lawsuit that sought damages under the Fair Debt Collection Practices Act (FDCPA) for language used in a collection letter. The lead plaintiff took a swing at a hyper-technical violation and got called out by the judge.

In Brandon Hillman v. NCO Financial Systems, the plaintiff took issue with the collection agency’s wording of the validation notice in its initial communication letter. Arguing that he, and “all others similarly situated” deserved some compensation for violations, the plaintiff took aim at the following passage in the dunning letter:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of the 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, 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 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.

Hillman alleged that the language violated the FDCPA [specifically,15 U.S.C. § 1692g(a)(4)] because it failed to disclose to the consumer that the consumer must notify the office within thirty days that he or she disputes the validity of the debt to trigger the statutory right to verification. Merely “notify[ing] the office” that the consumer requests verification, according to plaintiff, is insufficient to obtain the statute’s protections.

U.S. District Court Judge Jan E. DuBois in the Eastern District of Pennsylvania noted in the order that the plaintiff focused too much on the fact that the second sentence in the letter did not explicitly mention a dispute in writing.

“The flaw in plaintiff’s argument is that a consumer, as a matter of law, does not specifically need to identify a dispute in writing, as plaintiff claims, to exercise the right to verification,” wrote DuBois. “Under the FDCPA, requesting verification is sufficient to trigger a debt collector’s verification obligations. ‘Dispute’ is a term of art in FDCPA parlance that means a request to verify the existence of a debt.”

DuBois granted the defendant’s motion to dismiss and dismissed the case with prejudice.

Editor’s Note: This is exactly the type of thing covered in insideARM’s To the Point: Written and Verbal Communications, a fantastic report available in the Research Library. For example, one question covered in the report: When the validation letter sent by a consumer is dated several weeks prior to the postmark on the envelope, what is the best way to respond to these letters? Check it out.