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Penn Credit Collection Letter Validation Requirement FDCPA Class Action

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The Fair Debt Collection Practices Act (FDCPA) is meant to protect consumer debtors by requiring that debt collectors provide the truthful and accurate information necessary for them to make informed decisions. The complaint for this class action alleges that Penn Credit Corporation did not send consumers accurate information on how to dispute a debt.   

The class for this action is

  • All individuals with addresses in Pennsylvania
  • To whom Penn Credit Corporation sent an initial collection letter trying to collect a debt
  • Between September 19, 2018 and October 10, 2019
  • That omits the complete and accurate requirement that every part of a consumer’s dispute of a debt must be in writing, as provided for under § 1692(g)

Plaintiff Laquanna Williams allegedly incurred a debt to First Energy/Metro Edison, for personal, family, or household purposes. At some point, Penn was hired by that company to collect this debt. 

Penn sent Williams a letter dated October 1, 2018 attempting to collect this debt. A copy of the letter is attached to the original complaint when it was filed. 

Under the FDCPA, when a debt collector tries to collect a consumer debt, it must provide certain information either at its initial contact with the consumer or within five days of it. This letter was the initial contact. 

Among the requirements are statements about the right of the consumer to dispute the debt. The letter must contain “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[.]” 

It must also include “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 the judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector[.]” In addition, it must include “a statement that, upon a 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.”

What’s wrong with the Penn letter? The complaint claims that “the Third Circuit has made clear that ‘any dispute, to be effective, must be in writing.’” However, the Penn letter “does not meet the required requirements of the FDCPA, as interpreted by the Third Circuit, because it falsely omitted … the requirement that a consumer must dispute in writing.” 

The complaint quotes findings from earlier cases that also support this contention.

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