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Interesting FDCPA Case Law


BV80
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Here's some interesting rulings.  1692g(a) states:

(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.

We assumed that every first letter we receive from each CA/JDB is an "initial communication".  According to some courts, this is not the case.

Some courts have ruled that in the case of more than one CA collecting for the same OC, the initial communication only applies to the first CA.  In other words, Citibank hires ABC Collections to collect on a defaulted account.  ABC Collections is the first CA hired by Citi to collect.  That CA will have to include the 30 day notice in their first letter.

ABC Collections gets no response from you and returns the account to Citi.  Citibank then hires XYZ Receivables to attempt collection.  According to these certain courts, XYZ in NOT required to include the 30 day notice in their first letter to you.

The reason is because the initial (first) communication came from ABC Collection Agency, and there can be only ONE initial communication.  Therefore, subsequent debt collectors are not required to include that notice.

The court agrees with those courts which have determined that a subsequent debt collector is not required to provide additional notice and another thirty-day validation period after a validation notice has been timely sent to the debtor. McNall v. Credit Bureau of Josephine Cty., 689 F.Supp.2d 1265, 1269 (D.Or.2010).

Other courts that have ruled the same way:

Section 1692g does not require another debt collector, undertaking collection efforts after a validation notice has been timely sent, to provide additional notice and another thirty-day validation period. Ditty v. CheckRite, Ltd., 973 F.Supp. 1320, 1329 (D.Utah 1997).

Second, as to the law, even assuming that Wells Fargo was acting as a debt collector in this case, it was not obligated to provide Oppong with what would be a second validation notice (beyond that already provided by Federman and Phelan on behalf of First Union) with the requisite information. Oppong v. First Union Mortgage Corp., 566 F.Supp.2d 395, 403-04 (E.D.Pa. 2008), affd, 326 Fed.Appx. 663 (3d Cir. 2009).

Thus, the statute, which uses the passive voice for "the initial communication," does not indicate that the initial communication and the validation notice must be made by the same debt collector. Further, the statute only identifies a single initial communication. Nichols v. Byrd, 435 F.Supp.2d 1101, 1106-07 (D.Nev.2006).

The Court thus holds that there is only one "initial communication" with a debtor on a given debt under § 1692g(a), even though subsequent debt collectors may enter the picture. Senftle v. Landau, 390 F.Supp.2d 463, 473 (D.Md. 2005).

 

Ms. Donohue was entitled solely to one debt validation notice. 15 U.S.C. section 1692g(a) did not require Nielson to send an additional notice to Ms. Donohue for collection of that debt. Donohue v. Nielson, 161 Wash.App. 606, 255 P.3d 760, 763 (2011).


The foregoing are not JDB cases.  Therefore, they didn't rule a JDB doesn't have to send the 30 day notice because a collector for the previous may have done so.  These cases were strictly based on multiple collectors for the same owner of the account.  In addition, a few courts have disagreed with the above rulings.

There are 2 points to this post.  1)  We can't make a blanket statement regarding the requirements of CAs under the FDCPA.  The cases I cited prove that point.  2)  It's up to the consumer to find out how their own courts have ruled on this and other issues.


 

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I do not agree with this:   

 

When a ca get a collection account they normally add their fees and any other charges they think they can get away with...OC's original acct balance was lets say 500 dollars,ca #1 get the account and adds their fees for a new balance of lets say 650 dollars,,,CA # 2 get the account and adds their fees to it so now it is up to 800 dollars..

 

I would say you should be entitled to  a right to validate each one of those debts...say ca # 2 trys to pull a fast one and lists ca #1 as the OC, it happens and I can prove it. Neither one of these collection letters are the same, you should have the right to challenge each and every ca that comes along....

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I do not agree with this:   

 

When a ca get a collection account they normally add their fees and any other charges they think they can get away with...OC's original acct balance was lets say 500 dollars,ca #1 get the account and adds their fees for a new balance of lets say 650 dollars,,,CA # 2 get the account and adds their fees to it so now it is up to 800 dollars..

 

I would say you should be entitled to  a right to validate each one of those debts...say ca # 2 trys to pull a fast one and lists ca #1 as the OC, it happens and I can prove it. Neither one of these collection letters are the same, you should have the right to challenge each and every ca that comes along....

 

I don't agree with it either, but the courts don't care about my opinion.

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I would simply proceed with treating each collector as required to provide the notice on their initial communication anyway.  As pointed out, courts have gone both ways.  Just use better arguments, such as BTO suggested.

 

Again, it depends on how your court has ruled.  If a consumer is in one of the states in which the court has ruled that a subsequent CA does not have to provide the 30 day notice, it doesn't matter how good your arguments are.  If the CA's attorney points out how the court has ruled, your argument won't hold much weight.  That being said, you could take it all the way to the Circuit Court of Appeals and see if they'll hear the case.

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Thing is no one is talking to each other

 

CA 3 has no idea it is number 3

 

It is easier for them to dunn you as if they are the first, the time involved in verification that you received a dunn from CA#1 would be prohibitive

 

Yes, it would be easier for a CA to dunn you as if they were the first CA.  But, the fact that these cases exist shows that CAs are talking to someone.  They can ask the OC if they were the first CA hired to collect the debt.

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Yes, it would be easier for a CA to dunn you as if they were the first CA.  But, the fact that these cases exist shows that CAs are talking to someone.  They can ask the OC if they were the first CA hired to collect the debt.

 

If they were sued in those circuits over a violation that invovled the 30 day notice it would make sense that they would ask the OC and use the defense but then if they do not have to include the 30 day notice what happens then if CA #1 did not validate the debt, if they are allowing CA 3 to claim the defense that you were already dunned and given the 30 day notice then their letter should be considered a continued collection effort without validating and violate FDCPA

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If they were sued in those circuits over a violation that invovled the 30 day notice it would make sense that they would ask the OC and use the defense but then if they do not have to include the 30 day notice what happens then if CA #1 did not validate the debt, if they are allowing CA 3 to claim the defense that you were already dunned and given the 30 day notice then their letter should be considered a continued collection effort without validating and violate FDCPA

 

Your scenario is a different issue.  My post was related to one issue:  Subsequent CAs for the same account.  It was not about the 1st CA not validating.  The CAs in the cases I cited were sued because they didn't include the 30 day notice...no other reason.

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Question then, if a JDB is unable to collect, must he return it to the OC to be farmed out again. Or can that JDB sell it to the highest bidder on his own? I was under the impression that if the current JDB wants, since he owns the account that he is free to sell it at will to whomever.

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Question then, if a JDB is unable to collect, must he return it to the OC to be farmed out again. Or can that JDB sell it to the highest bidder on his own? I was under the impression that if the current JDB wants, since he owns the account that he is free to sell it at will to whomever.

 

Usually a JDB just sells the account to another JDB.  I've heard that there have been some agreements that allow an OC to repurchase the debt from a JDB, but I don't know how often that occurs.

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Great info BV80.   We have to be aware of rulings that don't go our way and stay on top of things to give debt collectors as few of victories as possible. 

 

Like some others I don't agree, but let's remember our opinion does not matter.   I can't count the number of times I've laughed and posted or said to a debt collector their opinion was irrelevant.  

 

Here is the good news, in my opinion.   As far as victories for the other side goes, this is one I can live with.   In the big picture with all the violations and all the cases that are filed, I can live with this.  I don't agree but pretty much every ruling goes in our favor.  In all honesty I'll trade this for the incredible rock and a hard place third party disclosure paints collectors in a corner.  They can have this one and leave my third party disclosure alone. 

 

The U.S. Supreme Court ruling bona fide error can't be used even if a debt collector acts on the wrong advice of their attorney and it's still a violation? Yeah, I'll take that and they can have maybe a second in line collector does not have to give the full Miranda. 

 

I ask you if paying this debt will help my credit and you answer pretty much anything but I don't know or I can't answer that and it's a violation?  Yeah, I'm good with trading this small victory, if you want to call it that, to the other side. 

 

I'm sure if give the choice in two recent cases, the court ruling that a debt collector has the burden of proving, if leaving a robo call message, that the burden is on the collector to prove that the debtor gave express permission to be called by robo call by the debt collector and not just the OC, or being able to leave off the maxi Miranda from a second in line collector, ........  I'm thinking the collection industry would gladly trade rulings with us.   I'm pretty sure given those two choices, 100% of us would tell the collectors to keep their so called victory. 

 

You get the point.  While I never like a victory for the other side, in the big picture, this is about as good as a defeat as you can get.  It's like a football team that has clinched the division and home field throughout the playoffs, but still has a game left to play.  They put up some token opposition and get beat, then go on to still win the Super Bowl.  I guess that team that beat them in the last game of the season is happy? 

 

Nice find BV80 and way to keep us on our game and sharp. 

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Oh I agree that this is nothing major, but it's out there.  It's something of which we need to be aware.  The fewer surprises we have coming at us, the better.

 

For instance, I didn't know until the other day that the 8th Circuit had ruled in Wilhelm v. Credico that a debt collector does not have to report your debt as disputed on your credit report if they were already reporting before you disputed the account in a DV.   It's just another aspect of the FDCPA for which we need to do some more research before making a blanket statement that a debt collector must report your account as disputed on your CR.  We may need to qualify that statement by adding "if they begin reporting after one disputes the debt."

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And to add to your good advice and topic, while I've done it for only one violation (it was a slam dunk however), this is a reason why it's always a good idea to have three violations so if one takes a nose dive you have some back-up.  

 

Of course the main thing to remember is that the collectors generally make your job pretty easy.  Usually you don't have to worry about the violations being borderline.  The collectors usually do a good job of making sure you have plenty of violations that will stick. 

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I don't agree with it either, but the courts don't care about my opinion.

thats the biggest problem,,,courts don't care about our opinion, we are the one that are oppressed by the debt collectors but we have no say so....we need to file more case and maybe set some new case law

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They say what ever happened with ca #1 they can use as a defense. so what if ca #1 screwed the pooch, can ca #1 screw up transfer to the next ca?.......but if ca#1 followed the law then they say what ever ca #1 did should also apply to the next ca.

 

You can't have your cake and eat it to.

 

If they claim this is so then it should work both ways.

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Question then, if a JDB is unable to collect, must he return it to the OC to be farmed out again. Or can that JDB sell it to the highest bidder on his own? I was under the impression that if the current JDB wants, since he owns the account that he is free to sell it at will to whomever.

It depends on who owns the debt, if the jdb owns the debt they can sell it, but if the OC still owns it they can not

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thats the biggest problem,,,courts don't care about our opinion, we are the one that are oppressed by the debt collectors but we have no say so....we need to file more case and maybe set some new case law

 

Thing is most Consumer attorneys are not looking to make new case law, unless they have a little don q in them they are going to concentrate on the cases that are backed up with case law that is already established.

 

Thing is by talking about what does and does not work and our thoughts and ideas about what can be and maybe not be violations has a lot of value, my attorney has told me he peruses the forum to see what is going on here and I am sure there are many others that do as well.

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They say what ever happened with ca #1 they can use as a defense. so what if ca #1 screwed the pooch, can ca #1 screw up transfer to the next ca?.......but if ca#1 followed the law then they say what ever ca #1 did should also apply to the next ca.

 

You can't have your cake and eat it to.

 

If they claim this is so then it should work both ways.

Any owner of the debt can sell the debt to any other party willing to buy the debt, whether they are a JDB or an OC.

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They say what ever happened with ca #1 they can use as a defense. so what if ca #1 screwed the pooch, can ca #1 screw up transfer to the next ca?.......but if ca#1 followed the law then they say what ever ca #1 did should also apply to the next ca.

 

You can't have your cake and eat it to.

 

If they claim this is so then it should work both ways.

If CA #1 "screwed the pooch" then your rights were not given to you.  Works the same with Miranda in criminal.   I really don't see this as a big deal.   You're given your Miranda rights and then each new officer that comes in to interrograte you does not have to read your Miranda rights all over again.  However, if you were not properly Mirandazied then of course all other parties can't rely on somebody that screwed the pooch. 

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thats the biggest problem,,,courts don't care about our opinion.

NO, that's the greatest thing in the world.  Have you ever been to a collectors board.  If courts really cared about opinions and listed to "opinions" then we would have no FDCPA at all.  Opinions can make laws, the courts care about laws.  This is a good thing really, a very good thing.  This is so minor in the big picture. 

 

If a collector leaves a voicmail it's third party disclosure even if they leave their warning.   If they don't leave a voicmail it's a violation for not properly disclosing who they are.   The collectors have argued the law puts them between a rock and a hard place.  They beg, cry and plead to the courts and the courts say this.....

 

“The Defendant has been cornered between a rock and a hard place, not because of any contradictory provisions of the FDCPA, but because the method they have selected to collect debts has put them there. See, Leyse v. Corporate Collection Services, Inc. 545 F.Supp.2d 334 (S.D. New York 2008).

 

Of course the FDCPA is contridictory but it's the law and using the plain language it is what it is so now the collectors have gone to Congress and gotten H.R. 4101, 112th Cong. (2012) which the last time I checked has died without ever being brought up past the initial stages, a great thing for us.

 

Let's don't get too carried away with how we the consumer are getting screwed here.  The FDCPA 99% of the time works in our favor and is the biggest pain in the rear ever for collectors.  This is not a great ruling and I disagree with it but it is far from any big deal for the consumer.

 

Any consumer that would recognize a Miranda or not is going to be smart enough to know how to deal with a collector anyway.  A person that does not know what they are doing and is going to deal with a collector is going to do so with or without that warning. 

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If CA #1 "screwed the pooch" then your rights were not given to you.  Works the same with Miranda in criminal.   I really don't see this as a big deal.   You're given your Miranda rights and then each new officer that comes in to interrograte you does not have to read your Miranda rights all over again.  However, if you were not properly Mirandazied then of course all other parties can't rely on somebody that screwed the pooch. 

 

I don't know if the above scenario would arise, but if it does, we have another he said/she said.  I think that most CAs are going to include the proper language whether they're the first CA or not just to cover their tushes, but you never know.

 

If multiple CAs have worked for the same OC to collect the same account, a CA can find out from the OC if they were the first CA to contact the consumer.   If they weren't the first, they have a defense in certain courts.  If we bring the suit and make the allegation, the burden of proof is on us. 

 

In a he said/she said situation, a court can go either way.   It will depend upon who the court believes has the better case..."he" or "she".  That's one of the reasons courts across the country can disagree with each other.  

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If we make an allegation that the maxi Miranda was not included in the initial communication then we have made a prima facie case when we show the letter.   The burden is not on us to show we never received that warning.  That now flips the burden to the other side for the affirmative defense that a maxi Miranda had already been given.  If they can meet that burden, THEN the burden flips back to us to argue the new collector is now sending another "initial communication" 

 

Then you run into the same problems a JDB has with chain of custody.  You can't just submit a letter and say look Judge here was their warning as it's hearsay.   So while I think this is a bad ruling, it's not that big of a deal.  I agree, most will still include the language.  It will be a nightmare to raise the affirmative defense that the warning had already been given because they will then have to get other collectors into court to testify, and those collectors will have no dog in the fight.   In other words the exact same situation as chain of custody. 

 

They might have to spend 5K just to defeat a simple allegation of no maxi Miranda being given and then it's not even close to a suit filed in bad faith, and now they are down 5K right out of the gate.  Or they can just inc the language and make the whole matter moot. 

 

Don't think for a second I won't jump all over it as part of a suit with other violations, I will.  However, I doubt we see a lot of first letters from a different collector without the language.   It's the same reason Police will give a Miranda warning even if it's a time they are not required.   Why even crack the door for the allegation of improper conduct to be made.

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My question then, is how does a DV request factor in here?

 

Let's say Citi sells an account to ABC. ABC gets timely DV request and rather than play, sells the account to XYZ.

 

Using the logic of the court, one could reasonably argue that XYZ is bound by the DV request sent to ABC and any collection activity they engage in prior to providing that validation is a violation.

 

Thoughts?

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