Law Professor Notes Right to Verify Debt Not Included in Proposed Rule’s Model Validation Notice

A law professor who specializes in consumer protection issues has raised some concerns about whether the Consumer Financial Protection Bureau’s proposed debt collection rule provides a notification of the right for a consumer to receive verification of a debt when using the proposed rule’s model validation notice.

Jeff Sovern, a law professor at St. John’s University, published his concerns and issued a request for feedback about his position, earlier this week.

Sovern notes that Section 1692g(a)(4) of the Fair Debt Collection Practices Act requires that collectors provide individuals with “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 . . . . ”

As he read through the Notice of Proposed Ruelmaking and evaluated the model validation notice, Sovern noticed that he did not see anything referring to a right to verification.

The Proposal states at page 253 “While Model Form B–3 would alert consumers to an oral dispute option, the form would clarify that only a written dispute would invoke verification rights pursuant to FDCPA sections 809(a)(4) and (5).” Maybe the Bureau thinks that a right to verification is limited to the right to obtain the name and address of the original creditor. But that has to be wrong as a matter of standard statutory interpretation because § 1692g(a)(5) already requires the validation notice to say that the consumer can request the original creditor’s name and address. In other words, (a)(4) would have no independent meaning if all verification meant was that the consumer can get the original creditor’s name and address and so would be surplussage. Courts usually construe statutes to avoid surplussage.

Noting that a provision in the proposed rule allows for the validation notice to include a verification notice, it is not actually included in the CFPB’s model form.

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