The Role of Validation and Communication in the Debt Collection Process

JurisdictionUnited States,Federal
CitationVol. 43
Publication year2022





From time to time debt collectors have been criticized for their aggressive collection tactics. If there was any doubt, congressional hearings showed the lengths to which some collectors went to collect their debts.(fn1) Debt collectors took advantage of the absence of legislation to pursue debtors without much interference.(fn2) Some debt collectors were fond of making idle threats and harassing telephone calls to force their victims into compliance.(fn3) They engaged in this type of conduct because their success in the field depended in large measure on the amount of money they could recover for their clients.(fn4) The abuses became so widespread that Congress eventually intervened by passing the Fair Debt Collection Practices Act(fn5) ("FDCPA") in 1977.

The FDCPA has several fascinating provisions. This Article will deal first with the validation section,(fn6) a provision that is calculated to make consumers aware of their right to dispute their debt within thirty days after they receive a debt collector's notice. The dispute mechanism is particularly helpful to the consumer because it requires a debt collector to seek verification of the debt for the consumer's benefit once the consumer disputes the debt in writing.(fn7) When that happens, the collector must suspend its collection activities.(fn8) In the absence of the consumer's written query, the debt collector may continue its collection activities during the thirty-day dispute period.(fn9)The result is a persistent tension between the collector's demand for payment and the consumer's claim of a thirty-day respite. It is not surprising, therefore, that a debt collector must frequently confront claims that its collection language contradicts or overshadows the validation language, resulting in a dilution of the consumer's rights under ? § 1692g.(fn10) There is even more confusion when the debt collector demands payment in less than thirty days.(fn11) This Article will discuss the various ways in which the courts have dealt with this recurring theme of conflict between the consumer's right to dispute the debt and the debt collector's right to demand payment within the thirty-day period. Some courts look for transitional language in the collection letter that explains the relationship between the collector's demands and the consumer's right to dispute the debt.(fn12)

Another part of the FDCPA that has attracted judicial attention is the provision covering a debt collector's communication in connection with collection activities. The drafters tried their best to protect consumers from a debt collector's contacts at "any unusual time or place or a time known or which should be known to be inconvenient to the consumer."(fn13) This language does not require actual knowledge of the inconvenience, and so consumers have greater flexibility in making their case against debt collectors that continue to badger them.(fn14)

The statute places similar restrictions on a debt collector if the collector knows that the consumer is represented by an attorney and "has knowledge of or can readily ascertain such attorney's name and address."(fn15) Unlike ? § 1692c(a)(1), this provision requires the debt collector's actual knowledge that an attorney is representing the consumer and this Article will explore whether this difference between subsections (a)(1) and (a)(2) can be justified.

With certain limited exceptions, a debt collector may not communicate with a third party in connection with the collection of any debt.(fn16) This restriction has caused problems for debt collectors that leave messages for consumers on recording machines.(fn17) Although debt collectors frequently use this device in a last ditch effort to contact a consumer, it is always a risky venture because the collector may not know who has access to the machine that bears the collection mes-sage.(fn18) Even if the debt collector wants to be so discreet in its communication that a third-party listener may not be aware that the recorded call is from a debt collector, there is a problem of not complying with the statutory requirement of disclosing that the communication is from a debt collector.(fn19) A review of the cases will show that a debt collector will invariably have difficulty justifying the use of voicemail to accomplish its mission. It runs the risk that someone other than the debtor will hear the collection message, thus resulting in the collector's violation of the provision against third-party contacts.(fn20)

Finally, this Article will discuss ? § 1692c(c) that allows a consumer to notify the debt collector in writing that the consumer wants the collector to stop communicating with him.(fn21) This is certainly a useful weapon in the consumer's arsenal, but there is room for improvement in the subsection's language. The Article will therefore conclude with some recommendations in this area that make a consumer's directive more meaningful in light of the statutory objective.(fn22)



The FDCPA includes a provision that requires a debt collector not only to give a consumer the basic details of the debt that the collector is trying to recover, but also to advise the consumer about the consumer's rights to dispute the debt.(fn23) This significant feature of the legislation responds to the possibility that the collector may be pursuing the wrong person or seeking to collect a debt that the consumer has already paid.(fn24) Congress therefore gave a consumer the right to dispute the debt within thirty days after the consumer receives a communication from the collector.(fn25) If the consumer disputes the debt in writing, the debt collector must suspend its collection activities until it gives the consumer written verification of the debt.(fn26) If the consumer disputes the debt orally, the collector does not have any obligation to verify the debt, but the collector cannot thereafter assume that the debt is valid.(fn27) Although a consumer's oral dispute of the debt does not impose any obligation on the debt collector to respond to the consumer, at least it signals to the collector that there may be something wrong with its claim and that it may want to investigate the matter further.(fn28)

This right to dispute the debt seems straightforward enough. It may seem surprising, therefore, that it has led to so many disagreements. By itself, it allows a consumer to assert a defense against a collector's pursuit, and a consumer normally welcomes news about the right to question the validity of the debt. One must remember, however, that the purpose of a collection letter is to convince the consumer to pay the debt, and a debt collector will use all kinds of language to accomplish its objective. The result is that a debt collector will sometimes demand payment within a certain time, while simultaneously giving the consumer notice of the right to dispute the debt.(fn29) In some cases, the demand for payment is more pronounced and conspicuous than the validation notice, thus leading to claims that the former overshadows the latter.(fn30) In others, the debt collector's messages are simply contradictory.(fn31) Sometimes the debt collector's strategy is to divert the consumer's attention from the dispute mechanism by emphasizing the demand for payment. That demand becomes even more significant when the debt collector insists on payment immediately, or at least within a period that seems to nullify the thirty days granted for disputing the debt. This collision between the debt collector's overtures demanding payment and the debt collector's statement of the consumer's right to seek verification of the debt frequently results in an ineffective message about the consumer's statutory rights.(fn32)

In Miller v. Payco-General American Credits, Inc.,(fn33) the debt collector demanded "immediate full payment," reminding the consumer it had his account on hand for "immediate action."(fn34) Lest there be any doubt about the time for payment, the debt collector emphasized in capitals across the bottom of the collection letter that it expected payment "now."(fn35) The debt collector drew the consumer's attention at the bottom of the first page to the validation notice on the reverse side.(fn36)However, the United States Court of Appeals for the Fourth Circuit questioned whether the consumer would ever venture beyond the information on the first page, which not only heralded the call for immediate payment, but also encouraged the consumer to telephone the collector with his reason for not paying.(fn37) The Fourth Circuit indicated its concern, therefore, not only about contradiction and overshadowing of the validation notice, but also about the possibility that the consumer's telephone response would induce the consumer to forego his statutory rights to have the debt validated.(fn38) An oral communication from the consumer may have given the debt collector some satisfaction, but in the final analysis its only effect would have been to destroy the debt collector's assumption about the validity of the debt, without requiring the debt collector to obtain any written verification for the...

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