A District Court judge in New Jersey has denied a defendant’s motion for summary judgment but granted an immediate appeal of the ruling to the Third Circuit Court of Appeals after it was sued for allegedly violating the Fair Debt Collection Practices Act by failing to note in a collection letter that a dispute must be filed in writing.
A copy of the ruling in Cadillo v. Stoneleigh Recovery Associates can be accessed by clicking here.
In this case, the plaintiff received a collection letter from the defendant that included the following passage:
Jersey City Medical Center has referred your delinquent account of $1,134.45 to this agency for collection.
This notice has been sent by a collection agency. This is an attempt to collect a debt. Any information obtained will be used for that purpose. Unless you notify this office within thirty (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 thirty (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 in writing within 30 days after receiving this notice this office will provide you with the name and address of the creditor. The law does not require us to wait until the end of the 30 day period before taking further collection efforts. But, if disputed, this agency will cease collection activities until we provide you with the validation information you requested.
If you have any questions or for further information, call toll-free at 877-812-8944 Monday through Thursday between 8:00 AM and 8:00 PM (CST) or Friday between 8:00 AM and 5:00 PM (CST).
The plaintiff alleged the letter violated Section 1692g(a)(3) of the FDCPA which requires debt collectors to include “a statement that unless the consumer, within thirty days after receipt of the notice, disputes the validity of the debt, or any portion thereof, the debt will be assumed to be valid by the debt collector.” The judge had previously denied a motion to dismiss by the defendants, ruling “the use of the word ‘if’ could arguably confuse the least sophisticated consumer as to whether a written response was required.”
The defendant pointed out that other District Courts have taken the opposite position, but the Third Circuit has yet to address the discrepancy, leading the judge to conclude that “if federal judges ‘have divided on the best reading’ of this validation notice, then surely the least sophisticated debtor would be similarly confused.”