Appeals Court Affirms Lower Court’s Class Certification in FDCPA Case

The Court of Appeals for the Sixth Circuit has affirmed a lower court’s ruling to certify a class action against a collection agency that was accused of violating the Fair Debt Collection Practices Act by not clearly indicating in its validation notices that any disputes filed by individuals had to be done in writing. The agency had argued that the individuals suffered no concrete damage as a result of the alleged violation and the District Court denied a motion to dismiss the case.

A copy of the ruling in Wilbur Macy and Pamela Stowe v. GC Services LP can be accessed by clicking here.

The plaintiffs received a collection letter from the defendants that included the following language:

[I]f you do dispute all or any portion of this debt within 30 days of receiving this letter, we will obtain verification of the debt from our client and send it to you. Or, if within 30 days of receiving this letter you request the name and address of the original creditor, we will provide it to you in the event it differs from our client, Synchrony Bank.

Originally, the defendant moved to have the case dismissed, arguing the plaintiffs lacked standing — a motion that was denied by the District Court for the Western District of Kentucky. The defendant re-asserted its challenge to standing when the class was certified, at which point the defendant appealed the decision to the Sixth Circuit.

The thrust of the defendant’s argument is that the plaintiffs did not suffer a concrete injury, which is required in order to file a suit in federal court.

Section 1692(g) of the FDCPA requires collectors to provide a notice to individuals that includes language notifying the individual of a 30-day window in which a debt can be disputed, provided the individual notify the collector in writing. From the Appeals Court’s ruling:

GC’s letters present a risk of harm to the FDCPA’s goal of ensuring that consumers are free from deceptive debt-collection practices because the letters provide misleading information about the manner in which the consumer can exercise the consumer’s statutory right to obtain verification of the debt or information regarding the original creditor. In responding to a debt collection notice, an oral inquiry or dispute of a debt’s validity has different legal consequences than a written one.

The Appeals Court tossed aside every argument put forth by the defendants to establish its position. Ultimately, the Appeals Court ruled that the defendant misled the plaintiffs with the language in the validation notice, which, according to the Appeals Court, “is precisely the type of harm—abusive debt-collection practices—the FDCPA was designed to prevent.”