The Fair Debt Collection Practices Act (FDCPA) is meant to protect consumers from improper, misleading, or abusive debt collection. California has a similar state law, the Rosenthal Fair Debt Collection Practices Act (RFDCPA). The complaint for this class action claims that Monarch Recovery Management, Inc. has violated both laws in the way it represents the consumer’s right to dispute the validity of the debt.
The class for this action is all persons in California to whom Monarch sent an initial written communication based up what the complaint calls the Template, in connection with the collection of a consumer debt, after August 23, 2018.
The FDCPA requires, among other things, that certain information be presented to an alleged consumer debtor. This information must be conveyed either in the first communication of the debt collector to the consumer or within five days after it. Among this information is that the consumer has the right to dispute the debt or any part of it.
Plaintiff Terri Stivers allegedly owed a consumer debt, for transactions incurred for personal, family, or household purposes. The debt originated with a personal Synchrony Bank consumer account. After the account allegedly went into default, at some point the company assigned Monarch to collect the debt.
Stivers received a debt collection letter from Monarch dated Mary 30, 2019. This was Monarch’s initial communication with her. The complaint calls this letter the Template, because it is believed that Monarch uses roughly the same template for all its consumer debt collection letters, changing only certain personal details.
On the consumer’s right to the validation of the debt, the letter reads, in part, “Unless you notify this office in writing within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume that this debt is valid.”
What’s wrong with this? The complaint takes issue with the words “in writing.” “The Template falsely represents that a consumer must dispute the alleged obligation in writing in order to prevent [Monarch] from assuming the validity of the alleged obligation.”
The complaint quotes an earlier case as saying, “The plain language of subsection (a)(3) [of the FDCPA] indicates that disputes need not be made in writing…”
The validation requirement often is criticized in FDCPA cases, but the interesting thing is that it’s usually in an opposite manner. That is, while consumers can dispute the debt by telephone, for example, their full rights are not protected unless they make the dispute in writing. Clearly this is a tricky section to compose to convey consumers’ rights as clearly as possible.