CFPB and FTC File Amicus Brief Urging Application of FDCPA Beyond Initial Debt Collection Notice

 by Massie P. Cooper, Tim J. St. George and David N. Anthony 

On August 20, the Consumer Financial Protection Bureau and the Federal Trade Commission jointly filed an amicus brief in Hernandez v. Williams, Zinman & Parham, P.C. The case concerns the interpretation and enforcement of the Fair Debt Collection Practices Act, and is currently on appeal to the U.S. Court of Appeals for the Ninth Circuit.

The case involves § 1692g(a) of the FDCPA, which provides that a “debt collector” must send a consumer a validation notice containing important information about the consumer’s debt and rights either in “the initial communication” or “[w]ithin five days after the initial communication with a consumer in connection with the collection of any debt.”  After receiving the notice, consumers have thirty (30) days to dispute the debt and to request information about the original creditor. If the original creditor is unable to verify the debt, then the debt collector cannot pursue the claim.

The plaintiff in Hernandez claimed that she received an inadequate validation notice. The defendant argued that the notice did not violate the FDCPA because the notice was not the “initial communication” that the plaintiff received about the debt. The defendant claimed that because the debtor had previously received a validation notice from a prior debt collector, subsequent debt collectors had no obligation to abide by the FDCPA’s requirements for validation notices. The district court granted summary judgment in the defendant’s favor, concluding that the validation notice requirement only applied to the first communication from the initial debt collector.

The CFPB and the FTC argue that the FDCPA requirement to provide a validation notice applies to every debt collector who contacts a consumer regarding a particular debt, not just the first debt collector. “The phrase ‘the initial communication’ is most naturally read—and has been read by this Court and Congress—to refer to each debt collector’s initial communication with a consumer,” the agencies said.

The agencies further argued that Congress enacted § 1692 of the FDCPA to eliminate the problem of debt collectors attempting to collect the wrong amounts from consumers. The agencies concluded that “[f]or these requirements to serve their purpose, they must apply to initial and subsequent debt collectors alike.”

Finally, the agencies argued that even if the Court finds ambiguity in the language of § 1692g(a), the Court should defer to the views of the CFPB and FTC – the agencies charged with implementing and enforcing the FDCPA.

 Read more at Consumer Financial Services Law Monitor by Troutman Sanders LLP. 

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