Texas Court Holds FDCPA Requires Snail Mail

Banking, Commercial, and Consumer Finance   |   May 9, 2017
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A debt collector runs afoul of the Fair Debt Collection Practices Act (FDCPA) if it fails to mail its response to a consumer’s request for verification of debt, ruled a Texas federal judge in Ghanta v. Immediate Credit Recoveries, Inc.

In Ghanta, a consumer received an initial correspondence from a debt collector for tuition expenses, and disputed the debt by email. The consumer also sent a request for debt verification to the defendant debt collector through the Consumer Financial Protection Bureau’s (CFPB) online portal. The defendant failed to respond to the email dispute, but uploaded a letter addressed to the CFPB through its portal, indicating that the plaintiff consumer “does in fact owe the balance” and “is responsible for th[e] bill.”

The defendant then resumed collection efforts by sending another collection letter to the plaintiff, who sued for violations of the FDCPA, claiming that the defendant failed to mail him verification of the debt before reinitiating collection efforts.

Judge Reed O’Connor of the District Court for the Northern District of Texas held that the FDCPA specifically requires that verification of the debt (or a copy of a judgment) be mailed to the consumer by the debt collector pursuant to 15 U.S.C. § 1692(g)(b). The court rejected the defendant’s argument to impose a more contemporary view of mailing, noting that Congress amended the FDCPA as recently as 2006 and did not change the requirements of § 1692(g)(b).

The court also rejected the defendant’s argument that its violation of the FDCPA was a minor one that should be overlooked in light of the fact that the consumer received the response through the CFPB portal, noting that the defendant failed to satisfy its statutory duty to mail the verification and the FDCPA is a strict liability statute. The court did not address whether an online portal response would have been sufficient had the consumer only disputed the debt through the portal and not also by email.

Judge O’Connor further ruled that even if the debt collector were permitted to respond through the CFPB’s online portal, the response itself contained insufficient information to verify the debt. At minimum, the verification should have contained sufficient “information for Plaintiff to determine if he had already paid the alleged debt or Defendant was attempting to collect from the wrong consumer.” The court noted that the verification failed to include “the amount of the debt, when the alleged debt accrued, or any description of the transaction resulting in the alleged debt.”

The court entered summary judgment in favor of the plaintiff consumer and a jury will determine an award of actual damages, if any. Debt collectors would be well-advised to stock up on forever stamps in light of the court’s ruling.

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