Words matter, especially in debt collection communications. As a collector recently learned the hard way, debt collectors should attempt to use words precisely in order to comply with the Fair Debt Collections Practices Act.
In Hackler v. Tolteca Enterprises, Inc., plaintiff Sadie Hackler rented a home in Texas. After she moved out, her landlord charged her for damages to the property, which she disputed. The landlord eventually turned the disputed debt over to a collection agency. The collection agency, defendant Tolteca Enterprises, Inc. d/b/a Phoenix Recovery Group, sent Hackler a letter attempting to collect the debt, which included this critical passage:
If you dispute the validity of this debt within 30 days from receipt of this notice, we will mail verification of the debt to you. If you do not dispute the validity of this debt within 30 days from receipt of this notice, we will assume it is valid. At your request, we will provide you with the name and address of the original creditor if different from the current creditor.
The FDCPA requires a debt collector, either in its initial communication to the consumer or by written notice within five days of the initial communications, to provide two key statements to the consumer: (1) A statement that if the consumer notifies the collector in writing within 30 days that the debt is disputed, then the collector will obtain verification of the debt. (2) A statement that upon the consumer’s written request within 30 days, the collector will provide the consumer with the name and address of the original creditor. Hackler’s lawsuit alleged that the debt collector’s letter failed to comply with these requirements, found in 15 U.S.C. §§ 1692g(a)(4)-(5).
On Hackler’s motion for summary judgment, the United States District Court for the Western District of Texas found the collector liable for a FDCPA violation. There was no dispute that Hackler was subjected to collection activities arising from a consumer debt, and that Phoenix Recovery Group was a debt collector. The only question was whether the letter failed to comply with the notice requirements of the FDCPA. The Court found, as a matter of law, that the letter failed to comply with §§ 1692g(a)(4)-(5) because, although the letter contained information about the debt dispute procedure and about requesting the name and address of the original creditor, it did not inform Hackler that those requests must be made in writing.
The lesson from this case is that every word can matter when it comes to compliance requirements. In Hackler, only a few missing words led to liability. The FDCPA allows for statutory damages of $1,000 per violation, plus the costs of litigation. In this case, Hackler succeeded in certifying a class. Those words may end up being very expensive omissions.