New York City Debt Collection Defense Attorney

Debt collector sends you a demand letter. You demand proof within 30 days. Without proof given, you are sued. Problem?

Yes. And it happens all the time.

But federal law (Fair Debt Collection Practices Act or "FDCPA") gives consumers the right to demand, in writing, "verification" of a debt within 30 days of a collector's communication. If done, § 1692g(b) of the FDCPA specifically states that the collector "shall cease communication...until the debt collector obtains verification."

Courts across the country have ruled that the affirmative step of a collection lawsuit amounts to a collection activity in violation of this law. This is because the summons and complaint has the effect of overshadowing the validation notice by making it "appear to the least sophisticated consumer that being taken to court trumps any other out-of-court rights she had." ( Ellis v. Solomon & Solomon, P.C., 599 F.Supp.2d 298, 304 [D.Conn.2009]); Curto v Palisades Collection, LLC, 07-CV-529 S, 2011 WL 5196708 [WDNY Oct. 31, 2011]).

This statute triggers your rights to obtain verification if you 1) dispute the debt (or any portion of it); or 2) demand the name and address of the original creditor (if different from the current creditor).

So then what kind of response is sufficient to satisfy a collector's burden to "verify" the debt? The minimum required information appears to be the original creditor, balance, and accrued interest. If the collector is seeking to collect on a judgment, then the judgment must be provided. If the debtor demands more than basic, factual information, the law appears to require the collector to be "reasonably responsive" to the verification demand. Some courts hold that a collector need not conduct an independent investigation to verify the accuracy of debt.

But what about situations where collection lawyers sue for "finance charges" allegedly contained in contracts but no such charges appear in the contract? In that scenario, my belief is that collection lawyers can easily be liable under the FDCPA. I believe that collection lawyers have the minimal obligation under the FDCPA to determine that the underlying contract authorizes collection of finance charges and interest rates. Bringing lawsuits while failing to conduct this minimal investigation implicates several other provisions of the FDCPA because of special considerations involving collection attorneys. For example, lawyers have the additional obligation under state law to avoid bringing or maintaining "frivolous" claims.

If you have been contacted by any debt collector, contact me right away so we can discuss your rights.