Under Section 1692g of the Fair Debt Collection Practices Act, if a consumer disputes a debt within 30 days of the first Miranda warning[1], the debt collector must cease collection efforts until the debt collector “obtains verification of the debt or a copy of a judgment, or the name and address of the original creditor, and a copy of such verification or judgment, or name and address of the original creditor.” 15 U.S.C.A. § 1692g (West). The statute seems straight forward, but with the advice on the internet (good, bad or indifferent), it has become more complicated. Debtors are now retrieving form letters and sending those off in response to demand letters in efforts to trip up debt collectors. Many times, those expansive letters request anything from the attorney employment agreements with their clients to the law firm’s insurance. The question is, does the law firm have to respond with every document request in order to have properly verified the debt under Section 1692g of the Fair Debt Collection Practices Act?
Fortunately, the courts have answered this question “no.” The courts have developed two tests. First, the traditional and more lenient test still applied by many courts was originally expounded in Chaudhry v. Gallerizzo, 174 F.3d 394, 406 (4th Cir. 1999). It required “nothing more than the debt collector confirming in writing that the amount being demanded is what the creditor is claiming is owed.” Haddad v. Alexander, Zelmanski, Danner & Fioritto, PLLC, 758 F.3d 777 (6th Cir. 2014) (citing Chaudhry 174 F.3d at 406 (4th Cir. 1999); see also, Clark v. Capital Credit & Collection Servs., 460 F.3d 1162 (9th Cir. 2006)). A second test was held in Haddad, where the the Sixth Circuit stated that sufficient “verification” requires the debt collector to “provide the consumer with notice of how and when the debt was originally incurred or other sufficient notice from which the consumer could sufficiently dispute the payment obligation.” Haddad, 758 F.3d at 786.
So what does this mean for a debt collector when responding to these letters? Generally, if the debt collector can give the basis for the original charge, an accounting of the debt and the name of the original creditor, the response to the verification will be sufficient. See e.g. Ritter v. Cohen & Slamowitz, LLP, 118 F.Supp.3d 497, 502, 504 (E.D.N.Y. 2015); Stoneheart v. Rosenthal, No: 01-CV-651, 2001 WL 910771, at *23 (S.D.N.Y. Aug, 13, 2001); and Hawkins-El v. First American Funding, 891 F.Supp. 2d 402 (E.D.N.Y. 2012); Hawkins-El v. First Am. Funding, LLC, 529 Fed.Appx. 45 (2d Cir. 2013) (affirming District Court’s opinion). However, in one instance, a court found that a verification contained internal inconsistencies, and was therefore insufficient. See Mack v. Progressive Financial Servs., Inc., No. 4:13cv544, 2015 WL 123742, at *1 (E.D. Tex. Jan. 8, 2015). Thus, it is important to make sure that the information given is accurate and consistent, otherwise the verification may be deemed insufficient, and all subsequent collection efforts may be in violation of the FDCPA.
Once the debt is verified, the debtors may continue their collection attempts, as stated in Hawkins-El “Plaintiff’s debt already had been verified for purposes of the FDCPA. Plaintiff cannot forestall collection efforts by repeating the same unsubstantiated assertions and thereby contend that the debt is ‘disputed.’ If Plaintiff were permitted to do so, debtors would be able to prevent collection permanently by sending letters, regardless of their merit, stating that the debt is in dispute. Such a result is untenable as it would make debts effectively uncollectible.” Hawkins-El, 891 F.Supp.2d at 410.
[1]See 15 U.S.C.A. § 1962g (a)(4) requiring “a statement that if the consumer notifies the debt collector in writing within the thirty-day period that the debt, or any portion thereof, is disputed, the debt collector will obtain verification of the debt or a copy of a judgment against the consumer and a copy of such verification or judgment will be mailed to the consumer by the debt collector.”