On January 31, a New Jersey District Court judge found that including a toll-free telephone number in an initial validation letter sent by a collection agency did not violate the Fair Debt Collection Practices Act (“FDCPA”) and therefore granted a debt collector’s Rule 12(c) motion to dismiss.

In Riccio v. Sentry Credit, consumer plaintiff Maureen Riccio incurred a debt which was assigned to Sentry Credit for collections.  Sentry sent Riccio a validation letter, which provided Riccio with a toll-free number, mailing address, and website to contact Sentry concerning the debt.  Riccio brought a putative class action lawsuit against Sentry, claiming its debt collection practices violated the FDCPA because Sentry’s letter failed to properly inform the least sophisticated consumer that to effectively dispute the alleged debt, such dispute must be in writing.

Riccio asserts that Sentry’s letter violated Sec. 1692g by failing to effectively inform Riccio what she must do in order to dispute the alleged debt.  Riccio further relies on Caprio v. Healthcare Revenue Recovery Group, LLC, 209 F.3d 142 (3d Cir. 2013) (holding that any dispute of a debt must be in writing in order to be effective).

Sentry provided verbatim language of Sec. 1692g in its letter to Riccio.  Specifically, the language instructs Riccio to “notify this office in writing within 30 days from receiving this notice, that you dispute the validity of this debt.”  The court also noted that no additional language appears in Sentry’s letter requesting that the consumer dispute the debt by telephone call.  The Court did recognize that Sentry provided both a toll-free telephone number and a website for the consumer to use to contact Sentry for payment arrangements.  However, there was no reference or instruction to Riccio to use either medium to dispute the debt.

The Court was not persuaded by Riccio’s argument and found that Sentry’s collection letter, when read in its entirety, did not contain overshadowing language and therefore did not violate the FDCPA.

This case attacks the Third Circuit’s holdings in both Caprio and Graziano v. Harrison, 950 F.2d 107 (3d Cir. 1991) (holding that a debt collector fails to meet the requirements of Sec. 1692g when the validation notice is overshadowed or contradicted by accompanying messages or notices from the debt collector).  The Court ruled that if the letter does not instruct the consumer to call the collector in order to dispute the debt, then merely having a telephone number in the collection letter does not overshadow the 1692g notice disclaimer and therefore does not violate the FDCPA.

We will continue to monitor judicial development of this issue.