The Fair Debt Collection Practices Act (FDCPA) tries to help consumers who owe debts by forbidding abuse and requiring clarity, accuracy, and information about the debtor’s rights. The complaint for this class action details multiple alleged violations of the FDCPA by a single defendant—Nationwide Credit, Inc.—on behalf of three consumers. The problems lie in the notice of validation rights.
The class for this action is all consumers to whom Nationwide sent a collection letter, on or after July 23, 2018, that was substantially and materially similar to the letters sent to the plaintiffs in this case.
The FDCPA requires that third-party debt collectors provide consumer debtors with certain information, either in their initial contact with them or within five days of it.
Among the information that must be provided is the consumer’s right to dispute the debt, or any part of it, within thirty days of the receipt of the debt collection letter. This is called the validation right. To retain all rights under this provision, or to obtain the name of the original creditor, the consumer debtor must make the dispute in writing.
The information must be stated clearly, without ambiguity, and should not be able to be misunderstood even by an unsophisticated consumer. It must not be “overshadowed” or contradicted by other information in the communication.
The first problem with the collection letters sent by Nationwide to all three plaintiffs is that the letters contain more than one address for Nationwide. One is a post office box address on the payment coupon. The second is a different post office box, also on the payment coupon. The letter does not make clear which address the consumer should write to if he wants to dispute the debt or obtain the name of the original creditor.
The complaint alleges that unsophisticated consumers could be confused about where to send the required letter and might therefore be discouraged from exercising their rights.
The second problem with the collection letters sent to all three plaintiffs is that the information about the debtor’s validation rights is not clear and conspicuous. The complaint says, “A collection letter overshadows the validation notice if it is formatted in a manner such that the validation notice is visibly inconspicuous.”
Each of the letters, the complaint claims, “buries the required validation notice within its text.” The letter puts the validation notice in running text in the body of the letter, but sets out the payment information in a box at the center of the letter’s body. This box, plus a computer image on the left side, and a list of various other rights, all serve to divert attention away from the validation notice.
The complaint claims that the “rights are positioned and deemphasized in such a way that it discourages the least sophisticated consumer from exercising her rights.”