A debt collector did not fulfill its Fair Debt Collection Practices Act obligation to verify a debt by reaffirming the payment demand in a letter posted on the Consumer Financial Protection Bureau’s consumer complaint portal, a U.S. district court judge has decided. The debt collector’s post was not mailed, as required by the FDCPA, and did not include enough information to constitute verification. The judge also said that the FDCPA violation resulted in a concrete injury that was adequate to give the consumer standing to sue (Ghanta v. Immediate Credit Recovery, Inc.).
Debt collector Immediate Credit Recovery, Inc., was hired to collect unpaid college tuition the consumer was said to owe. The company took the correct first step, informing the consumer that if he disputed the debt within 30 days it would obtain verification of the debt and mail that verification to him. Under the FDCPA, collection efforts could not resume until requested verification was provided.
The consumer sent Immediate Recovery a request for verification of the tuition bill, but apparently the company did not reply. Four and a half months later, the consumer made a complaint about the lack of verification on the CFPB portal. The bureau asked Immediate Recovery for a response, and on the same day the company uploaded a statement that the consumer “does in fact owe the balance” and “is responsible” for payment. However, the debt collector offered no details.
The next month, the company sent the consumer a new dunning letter. This, according to the consumer, was an FDCPA violation because the company restarted its collection efforts without having provided him the required verification of the claimed debt.
Standing to sue. The consumer’s first hurdle was convincing the judge that he had described an injury-in-fact that gave him standing to sue. Immediate Recovery claimed he had not.
The long-standing injury-in-fact requirement that a consumer describe an injury that is both concrete and particularized has taken on greater significance in the wake of the Supreme Court’s decision in Spokeo, Inc. v. Robins. According to the judge, Spokeo made clear that an injury must be shown but did not require the showing of an injury beyond what the statute described. An intangible injury that is “closely related to the harm the statute seeks to prevent” can be a concrete injury.
The FDCPA was intended to prevent abusive debt collection practices, the judge said. The consumer said he had been the victim of an act the FDCPA said was an abusive practice, and that was enough to constitute a concrete injury.
Verification method. If a consumer requests the verification of a debt, the FDCPA says collection efforts must cease until that verification “is mailed to the consumer” (15 U.S.C. §1692g(b)). Immediate Recovery argued that “mailed” allowed any method of sending verification, including uploading a statement to the CFPB’s complaint portal.
The judge was not convinced. It is true there are methods of communication available now that did not exist when the FDCPA was enacted 40 years ago, he conceded, but the act said “mailed.” Only Congress could change that language. He also noted that other parts of the same section used “send” rather than “mailed,” which implied that Congress had made an intentional distinction.
Immediate Recovery’s post on the CFPB website was directed to the bureau, not to the consumer, the judge added. There was no reason to conclude that the post resulted from the consumer’s knowing waiver of the right to a mailed verification. Whether the consumer received the verification was irrelevant.
Verification information. Even if the debt collector could verify a debt by posting on the bureau’s portal, this post did not provide adequate verification, the judge then said. While there was no precise description of what information was required, verification required at a minimum that the consumer be given enough information to dispute the claimed debt.
Immediate Recovery’s post did not offer enough information for the consumer to determine if he already had paid the debt or if the debt collector was dunning the wrong consumer. It stated neither the amount of the debt nor when the debt accrued, and it said nothing about the nature of the transaction from which the debt arose.
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