Debt Collectors Must Provide More Documentation When Consumers Request Validation
How does verification work? When a debt collector first starts collecting a debt, it must send a letter to the consumer informing him or her that it is requesting payment. This is required under 15 U.S.C. § 1692g(b).
If the consumer wants, he or she can then request what is called “verification” of the debt. This request must be made within 30 days. If the consumer requests verification, the debt collector may not continue to collect until it responds.
This is where the problems start. Oftentimes, consumers have very specific disputes about accounts. For example, they may dispute the amount, or they may have no recollection of the creditor because it was a result of identity theft, or because the account was already paid off. (Our office has seen all of these issues.)
But no matter what the dispute, debt collectors usually send the same canned response, an account statement. This usually does not respond to the issue raised by the consumer.
What the court ruled is that a debt collector has an obligation not just to provide an account statement, but to provide an “explanation as to the nature of the challenged item itself, such as a purchase on a particular date, a missed rental payment for a specific month, a fee for a particular service provided at a specified time, or a fine for a particular offense assessed on a certain date.”
That is, the debt collector has to actually respond to the substance of the dispute.
Moreover, the verification process may be ongoing. If the consumer responds and requests more information, the debt collector may be obligated to respond.
This is a clear victory for consumers. As the court held, a dispute verification must be sufficient to help the consumer to decide whether to pay the debt, or to dispute its validity.
Additionally, because the Massachusetts debt collection regulations are generally interpreted in accordance with the FDCPA, this decision is likely to better assist consumers in Massachusetts in disputes with both debt collectors and creditors.
The case is available here: Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC
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