Judge Denies MTD in FDCPA Case Over Dispute Clarification in Letter

A District Court judge in Colorado has denied a defendant’s motion to dismiss after it was sued for allegedly violating the Fair Debt Collection Practices Act because it included a statement in a collection letter that informed the recipient that calling to obtain more information or making a payment on the unpaid debt was not a substitute for disputing the debt.

A copy of the ruling in the case of Garrett v. Financial Business and Consumer Solutions, Inc., can be accessed by clicking here.

The plaintiff received a collection letter from the defendant, seeking to collect on an unpaid credit card debt. The letter instructed the recipient to contact the defendant if he was unable to pay the debt in full and speak to an agent because there might be other options available. The letter also included the following statement: “CALLING FOR FURTHER INFORMATION OR MAKING A PAYMENT IS NOT A SUBSTITUTE FOR DISPUTING THE DEBT.”

The plaintiff filed suit, alleging the statement violated Section 1692e(10) of the FDCPA and overshadowed Section 1692g of the statute. He claimed the statement in question obligated him to contact the defendant and dispute the debt and that he had only two mutually exclusive options — either calling for more information or making a payment. Why can’t he do both, he posited. As well, the plaintiff claimed that the letter portrayed the dispute process as mandatory, thus overshadowing the validation notice.

In denying the defendant’s 12(b)(6) motion to dismiss, the judge noted that the claims made by the plaintiff were plausible enough to allow the suit to continue, but “[w]hether Plaintiff will prevail on the merits of those claims under the least sophisticated consumer standard is beyond the scope of the pleading and thus this ruling.”

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