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Collection Agency Wins Motion to Dismiss Thanks to Clear Validation Notice

Sometimes, when you do the right thing, you’re rewarded by a federal judge. I think I saw that on a bumper sticker somewhere.

A collection agency based in Minnesota, National Recoveries Inc., was granted its motion to dismiss a case after a plaintiff filed a class action lawsuit alleging the company violated the Fair Debt Collection Practices Act by sending a validation notice that would be confusing to the least sophisticated consumer.

A copy of the ruling, in the case of Reizner v. National Recoveries Inc., can be accessed by clicking here.

The validation notice said:

Dear Alex Reizner,

This notice, regarding your defaulted student loan or grant overpayment held by the U.S. Department of Education, is from National Recoveries, Inc.

Unless you notify this office within 30 days after receiving this notice that youdispute the validity of the 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 ajudgment and mail you a copy of such verification or judgment. Upon your written request within 30 days after receiving this notice, this office willprovide you with the name and address of the original creditor, if different from the current creditor.

National Recoveries, Inc. office hours are: 7:00am-9:00pm, Monday through Thursday; 7:00am-7:00pm, Friday; 8:00am-12:00pm, Saturday (Central Time). You may write to us at the address listed below or telephone us at the number provided below. Do not send a payment to this address.

National Recovers, Inc. P.O. Box 120666 St. Paul, MN 55112

Toll-Free Number: 1-877-221-9729

Facsimile: 763-780-6255

This communication is from a debt collector. This is an attempt to collect a debt. Any information obtained will be used for that purpose.

As of the date of this letter, you owe $96,601.75. Because of interest, late charges, and other charges that may vary day to day, the amount due on the day you pay may be greater. Hence, if you pay the amount due shown above, an adjustmentmay be necessary after we received your payment, in which event we will inform you before depositing the payment for collection. For further information, pleasewrite or call us at the address or number contained in this notice.

Consumer Feedback — To submit complaints, questions, or any other concerns, you may do so via fax at 763-780-6255, via email to compliance@nationalrecoveries.com, or call toll-free at 1-877-221-9729 during business hours.

The plaintiff has filed a notice of an intention to appeal the ruling to Court of Appeals for the Third Circuit.

In looking through a handful of other collection letter cases that have been ruled on by the Third Circuit Court of Appeals as well as other Circuits at the Appellate level, the judge in this case, Judge John Michael Vazquez, ruled that this letter did not rise to the standard of an FDCPA violation.

The validation notice appears in the first two paragraphs of the letter, and it precedes NRI’s address and telephone number. The Collection Letter does not expressly state that Plaintiff should call to contest the debt. The validation language is also in bold font. In comparison, the information following the validation notice is in norrrial typeface. The validation notice is set off by a solid line, demarcating the notice from the rest of the letter’s language. Further, the additional language in the Collection Letter does not threaten or encourage Plaintiff to waive his statutory right to challenge the validity of the debt. The validation notice appears in the first two paragraphs of the letter, and it precedes NRI’s address and telephone number. The Collection Letter does not expressly state that Plaintiff should call to contest the debt. The validation language is also in bold font. In comparison, the information following the validation notice is in norrrial typeface. The validation notice is set off by a solid line, demarcating the notice from the rest of the letter’s language. Further, the additional language in the Collection Letter does not threaten or encourage Plaintiff to waive his statutory right to challenge the validity of the debt.

 

 

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