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IC System Misleading Notice of Validation Rights FDCPA Class Action

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Bill with Words "Final Notice" Stamped in Red

The Fair Debt Collection Practices Act (FDCPA) requires that debt collectors tell consumers of their rights to validate the debt. The complaint for this class action claims that debt collector I. C. System, Inc. (ICS) provided misleading information about these rights in its letter to the plaintiff, thus violating the FDCPA as well as the Wisconsin Consumer Act (WCA).

The class for this action is

  • All natural persons in Wisconsin
  • Who were sent a collection letter in the form shown by Exhibit A attached to this complaint
  • Attempting to collect a debt for personal, family, or household purposes,
  • Sent between July 2, 2017 and July 2, 2018, and
  • Not returned by the postal service,
  • That tells the recipient that “[i]f you feel you are or have been a victim of Theft of identity, please notify us within 30 days of this notice.”

The original debt allegedly incurred by plaintiff Kuldeep Kaur was for personal, family, or household purposes. Specifically, its source was phone service bills from AT&T Mobility.

Later, ICS was assigned to collect the debt. The company sent Kaur a debt collection letter dated November 2, 2017, a copy of which is attached to the complaint as Exhibit A.

The letter was the initial contact between the company and Kaur. The FDCPA specifies that specific information must be provided to consumers either within the first contact or within five days of it. Included in this information is a notice of the consumer’s right to validate the debt.

Although ICS’s letter did contain a notice of validation rights, the complaint cites two problems with it.

First, it was followed by this sentence: “If you feel you are or have been a victim of Theft of Identity, please notify us within 30 days of this notice and call AT&T Mobility…” If a consumer believed the debt to be the result of identity theft, the complaint says, this is a dispute of the debt. What the letter does, then, is take a subset of debt disputes and provide different—and faulty—information for it.

In order to trigger verification under the FDCPA, the complaint says, the dispute must be presented in writing. The different information for identity theft gives the consumer the impression that that type of dispute may be made over the telephone.

Finally, the sentence tells the consumer to “notify us within 30 days of this notice…” The complaint says that this is also a violation of the FDCPA because the validation period does not begin on the date of the notice but on the date the consumer receives the notice.

These points make the validation notice unclear and misleading, the complaint claims.

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