Sending Docs After the Validation Period Expires? One Court Says, No

Debt collectors have become accustomed to erring on the side of providing consumers with information regarding their debts, regardless of whether a dispute or verification request is timely. But should they? No, says a judge in the Western District of Missouri, who recently held that doing so may violate the Fair Debt Collection Practices Act (FDCPA).

In Denmon v. Kansas Counselors, Inc. (21-00457; W.D. Mo 2023), a debt collector sent a consumer its initial debt collection letter, and nearly four years later, the consumer mailed the debt collector a letter that said:

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“I reviewed my credit report and discovered that you are reporting that I owe you $300 for a debt to Rockhill Orthopedic Specialists, Inc. I dispute this debt. Please do not contact me about this debt.”

Shortly after that, the collection agency responded by letter with the following language (in addition to the mini Miranda):

“We recently received your request for verification of your account with our office.

In response to your request, we are enclosing documents provided by our client which verify your debt.

Now that our debt has been verified, we will resume collection activity on your account. We are always interested in assisting you in your efforts to resolve this matter.”

The consumer then filed a lawsuit alleging that the debt collector’s response violated the FDCPA. She argued that because her letter asked the debt collector to cease communication, they should not have contacted her, even to provide verification documents. The debt collector filed a motion for summary judgment, arguing that “one unwanted letter is insufficient to support a claim of actual injury,” thus the consumer lacked Article III standing. 

After confirming one letter was sufficient to establish standing, the court rejected the debt collector's argument that it was required to send documents to the consumer. The court held that the letter did not qualify as a validation letter under the FDCPA since the validation period had lapsed. Further, the letter did not otherwise fit under any of the three exceptions to cease requests found in 15 U.S.C.A. Section 1692c(c). In the court’s opinion, despite disputing the debt, since the consumer’s letter was not timely to be considered a dispute, it was simply a request to cease communication.

insideARM Perspective:

This ruling is troubling. Acting in the consumer's best interest, debt collectors often respond to disputes and requests for verification after the verification has expired. No good deed goes unpunished though, and debt collectors must be conscious of the timing of consumer disputes to determine what that dispute actually triggers. 

Is this a one-off, outlier case? Hopefully. If not, the end result may cause debt collectors to strictly enforce the FDCPA's 30 day verification window, and decline to accomodate late requests. This seems to go completely against the consumer-centric world debt collectors have spent significant time and resources to meet.  

Debt collectors are used to having a thin line to walk on; now, it’s a tightrope.