Debt Collection Letter Violated FDCPA Guidelines, Court Rules

A federal appellate court has ruled that a collection letter sent by a lawyer demanding payment of a debt owed to her client violated the Fair Debt Collection Practices Act (FDCPA).

The U.S. Court of Appeals for the First Circuit ruled on Sept. 8 that when debt attorney Mandy Spaulding sent Robbie Pollard a notice telling Pollard that she owed $611.84 to Spaulding’s client, it was written in “hopelessly scrambled syntax” that would be confusing to the “hypothetical unsophisticated consumer” who has no legal training in what’s considered legal and illegal debt collection practices under the FDCPA.

Spaulding’s debt collection letter informed Pollard that she had 30 days to dispute the debt, but that doing so may not preclude Spaulding from filing a lawsuit against Pollard before the 30 days was up. The debt collection letter further stated that Spaulding “was not inclined to use further resources attempting to collect this debt before filing suit” and was “obligated to [her] client to pursue the next logical course of action without delay.”

The court found that Spaulding’s letter “overshadowed or contradicted the required notice of the consumer’s 30-day validation right in violation” of the FDCPA.

The letter “seems to threaten immediate litigation” and “implicit in this threat, is the idea that litigation can be avoided only if payment is made forthwith,” the court found. “That idea is reinforced by the fact that the letter appears on law firm letterhead and bears the signature of an attorney.”

The FDCPA requires debt collectors to alert consumers that they are entitled to demand the debt be verified. The court found that even if a collection notice provides that notice, which Spaulding’s letter did, albeit in very fine print, it cannot be “overshadowed or contradicted” in other parts of the letter in such a way that the average person would be unsure of their rights.

FDCPA Guidelines Protect Consumers

The FDCPA prohibits debt collectors from engaging in a variety of tactics, including harassment which is constituted as abusive language, threats or continuing to contact the consumer after the consumer has notified the collector they do not wish to be contacted.

Telephone harassment is also unlawful. Collectors may only call between the hours of 8 a.m. and 9 p.m. and cannot do so in harassing manner.

Debt collectors are also prohibited from making false statements and engaging in deceptive practices, attempting to collect debts that have expired or are not owed (such as those discharged in bankruptcy or debts previously settled), making improper reports to credit reporting agencies and contacting third parties, such as family members or employers, in an effort to collect the debt.

If a debt collector is found to have violated the FDCPA, the debtor is entitled to receive $1,000 in statutory damages, plus any actual damages that they have suffered. Filing an FDCPA lawsuit is one course of action to take against a company that has violated a consumer’s rights under the law.

Congress approved the FDCPA in 1977 to establish legal protection from abusive debt collection practices.

Join a Free FDCPA Class Action Lawsuit Investigation

If you believe that a debt collection firm has engaged in unfair or illegal debt collection practices, get help now with a free case evaluation to see if you qualify for compensation under the FDCPA.

DISCLAIMER: Debt collection itself is not illegal. However, debt collection firms collecting on consumer debts must adhere to the FDCPA. Even though debt attorneys are investigating these companies, their debt collection practices may be legal.