If you believe you owe $250 to a creditor, but the debt collector says you owe over $300, what can you do? The Fair Debt Collection Practices Act (FDCPA) says you can dispute a portion of a debt. But the complaint for this class action alleges that a collection letter from Rosenthal Morgan and Thomas, Inc. doesn’t properly inform debtors of this right.
The class for this action is all natural persons to whom Rosenthal Morgan and Thomas, Inc. mailed a written communication in the form of Exhibit A to an address in Wisconsin, between August 24, 2018 and September 14, 2018.
Krystal Bunch supposedly incurred a consumer debt for home security from Vector Security, Inc. for personal, family, or household purposes. The invoice from the company is attached to the complaint as Exhibit A. It shows a remaining amount due of $249.11.
At some point, the debt was assigned to Rosenthal for collection. The company sent Bunch a collection letter dated July 26, 2018, which is attached to the complaint as Exhibit B. The amount of debt is shown as $316.37.
The complaint alleges, first, that the company improperly added amounts to the debt that it has no right to collect. It says that the FDCPA requires that the debt be broken down into its component charges (for example, interest and fees).
Second, the letter is not clear on Bunch’s rights. The FDCPA requires that the debt collector must obtain verification of the debt or any part of it if the consumer notifies the debt collector in writing within the thirty-day period. But the letter says, “If notice is sent to this office in writing writing within thirty days from receipt of this notice, this office will obtain verification of this debt or obtain a copy of the judgment…”
In other words, the letter does not make clear that even if Bunch recognizes the general existence of the debt, she can dispute a part of it—the part of it that exceeds the $249.11 shown on her invoice.
The standard that the FDCPA uses to determine whether debt collection letters are clear and unambiguous is that of an unsophisticated consumer. The complaint quotes an earlier court case that says, “The unsophisticated consumer is uninformed, naïve, and trusting, but possesses rudimentary knowledge about the financial world, is wise enough to read collection notices with added care, possesses reasonable intelligence, and is capable of making basic logical deductions and inferences.” But the unsophisticated consumer cannot be expected to know the details of her rights under the law.
Because the letter doesn’t mention Bunch’s right to dispute a portion of the debt, the complaint says that the letter is “confusing, misleading, and deceptive to the unsophisticated consumer.”