On August 23, the U.S. District Court for the District of New Jersey dismissed an action against a collection agency on issues related to a validation notice. In Rosa v. Encore Receivable Management, Inc. et al., No. 15-cv-02311, the plaintiff alleged that the collection agency sent letters to at least 50 people in New Jersey that deceived consumers into believing they could dispute their debt by either calling or writing when in fact a consumer could only make a legally effective dispute in writing. The Fair Debt Collection Practices Act requires that within five days of a debt collector’s initial communication with a consumer, the debt collector must provide written disclosures that include a “validation notice.” The validation notice must inform the debtor of how to obtain verification of the debt in the event of a dispute and that he or she has thirty days in which to do so. Courts have established that this notice must be conveyed effectively to the debtor and cannot be overshadowed or contradicted by other language contained in the correspondence. In this case, the plaintiff alleged that language requesting that the debtor call or write to the collection agency in the event payment has already been made overshadowed the validation notice and provided an alternative option to dispute a debt that was not in compliance with requirements under the FDCPA for validation notices.
In reviewing the validation notice in this case, the district court applied the standard from a case decided in the Third Circuit, Caprio v. Healthcare Revenue Recovery Grp., 709 F.3d 142 (3d Cir. 2013). In Caprio, the court held that a validation notice is overshadowed or contradicted where the collection correspondence would make the least sophisticated consumer uncertain as to his rights. The letter sent by the debt collector in Caprio instructed the debtor to either call or write if the debtor believed he did not owe the amount listed as due, and the language about calling the debtor was in bold typeface. With respect to the form of the letter, the circuit court found that the message basically instructed the least sophisticated debtor to either call or write in order to dispute the debt. Regarding the letter’s substance, the circuit court found that the language drew extra attention to the legally deficient option of calling the debt collector because the words “please call” and the toll-free number were printed in bold on the front of the letter. No such emphasis was included in the validation notice, which was relegated to the back of the letter. In that case, the circuit court found that the letter could reasonably be read to have two or more different meanings, one of which is inaccurate.
In this action, the district court followed the Third Circuit’s two-prong analysis in Caprio to review both the form and substance of the correspondence. The court found that the language instructed the consumer to call the debt collector only if the bill had already been paid. Therefore, the language did not appear to be an alternative way to dispute the underlying debt. Furthermore, the validation notice appeared on the same side of the correspondence and in typeface of the same font, size, and color as the instruction to call the debt collector, resulting in no extra emphasis or textual prominence of the phone number or instruction to call the debt collector. Therefore, with respect to the options of either calling to notify the debt collector that the debt has been paid or following the procedure for disputing the debt, the court found there was no emphasis of one option over the other, and the letter did not leave the least sophisticated consumer uncertain as to his or her rights under the FDCPA.