D.N.J. and E.D. Pa. at Odds: Does a Letter Tracking FDCPA Validation Language Confuse a Consumer or Not?

This has been a hot issue in the industry for a while now, and it seems that we are no closer to a resolution. Similar to prior rulings, the District of New Jersey (D.N.J.) has yet again ruled that a letter containing validation notice language that tracks section 1692g(a) of the FDCPA and includes the debt collector’s contact information does not confuse a consumer into thinking that he can dispute the debt orally. The case is Martinez v. Diversified Consultants, Inc., No. 17-cv-11923 (D.N.J. Jan. 24, 2019).

However, another court within the Third Circuit’s umbrella, the Eastern District of Pennsylvania (E.D. Pa.), continues to find that validation language that tracks the FDCPA confuses a consumer into thinking that a dispute can be made orally. Check out the insideARM Perspective at the end of this article for a discussion about the inconsistency.

Factual and Procedural Background

In the Martinez case, plaintiff-consumer fell behind on his Verizon account, which was then referred to a debt collector. The debt collector sent a letter to plaintiff containing on its front page a notice of validation rights that tracks the language of the FDCPA:

Unless you notify this office within 30 days after receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will assume this debt is valid. If you notify this office in writing within 30 days from receiving this notice that you dispute the validity of this debt, or any portion thereof, this office will obtain verification of the debt or obtain a copy of a judgment and mail you a copy of such judgment or verification. If you request of this office in writing within 30 days after receiving this notice, this office will provide you with the name and address of the original creditor, if different from the current creditor.

The letter also contains the debt collector’s address, toll free telephone number, hours of operation, and website address. The letter notifies the consumer that calls to and from the debt collector may be monitored or recorded.

Plaintiff filed a lawsuit alleging that this letter violates the FDCPA because it confuses the least sophisticated consumer about what he needs to do in order to dispute the account. Specifically, that including a phone number somehow makes a consumer think that he can dispute the debt by phone.

The debt collector filed a motion to dismiss, which was granted by the court.

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The Court’s Decision

The court’s decision is in line with prior decisions from New Jersey. Per the guidance from those decisions, the court looked at the substance and the form of the letter.

Substance-wise, the letter contained no indication that a dispute can be made orally, nor did it contain any sort of invitation to call (which, the court mentions, itself also wouldn’t necessarily be a violation). The only reference to disputing the debt in the letter was within the validation notice language, which contains an instruction to send the dispute in writing. Due to this, the court found that there is nothing confusing about the consumer’s requirement to dispute his debt based on the substance of the letter.

Form-wise, the court found that the letter contained all factors that favor the debt collector’s argument for dismissal. The validation language is clearly listed on the front of the letter and not intermingled in any way with the telephone number. The telephone number doesn’t appear an overwhelming amount of times on the letter. The telephone number is not printed in bold nor in a large font.

Accordingly, the court dismissed the lawsuit, allowing plaintiff the opportunity to amend the complaint if it can fix the deficiencies identified by the court.

Of most importance in this decision, however, is a little phrase tucked away in the middle:

For the reasons discussed below, the Court rules that the Collection Letter contains the required validation notice under Section 1692g(a)...

(Emphasis added.)

This is, of course, in direct conflict with E.D. Pa. decisions that ruled the exact opposite for identical validation notice language.

insideARM Perspective

The Third Circuit has inconsistency on its hands, and it is time for a resolution. If the same letter is both violative and not violative within the same circuit, an appeal -- even as far as Supreme Court review due to the Third Circuit's unique interpretation that subsection (a)(3) contains a written requirement -- is necessary to resolve the conflict.

In the past year, D.N.J. found that letters -- all of which contained identical FDCPA-tracking validation notice language -- do not lead a least sophisticated consumer into believe that they can dispute the debt by phone. The cases include, but are not limited to:

Across the state border, decisions in E.D. Pa. have consistently found that letters, which are almost identical to those listed in the cases above, somehow could confuse a least sophisticated consumer into thinking they can dispute the debt orally. These cases include, but are not limited to:

How can these virtually identical letters both confuse and not confuse the least sophisticated consumer about how to dispute the debt?

The reasoning in E.D. Pa. decisions is that the whole of the letter may have been reviewed to determine whether the language is confusing, but the specific validation language (outside of the remainder of the letter) has not. This, however, goes against other rulings that suggest the letter should be viewed as a whole rather than isolating individual parts. Doing otherwise contributes to the trouble of piecemeal letter requirements caused by hyper-technical lawsuits such as the ones in question.

One thing is for sure. A cleanup of decisions on this issue is needed in the Third Circuit.