MVN Not a Requirement Under Reg F, FDCPA, Judge Rules

Usually, when I write about cases being remanded back to state court, it’s not necessarily a good thing for the collector. In fact, it’s often the collector that sought to have the case heard in federal court in the first place. But, this time, a District Court judge granting a collector’s motion to remand a case back to state court is a good thing, because the underlying case hinges on whether sending the Model Validation Notice is a requirement to comply with the Fair Debt Collection Practices Act.

A copy of the ruling in the case of Collection Professionals Inc. v. McDonough District Hospital can be accessed by clicking here.

Background: The plaintiff has been collecting on unpaid debts for the defendant for 15 years. There is an underlying agreement that requires the plaintiff to comply with the FDCPA and rules issued by the Consumer Financial Protection Bureau. When Regulation F went into effect last November, the plaintiff was not ready to use Reg F’s MVN. In February, the Chief Executive of the hospital sent the plaintiff a letter declaring that it was in breach of the agreement because it was not complying with the FDCPA, claiming that use of the MVN was required. The letter requested that the plaintiff cease all collection activity on the hospital’s accounts and return everything back to the defendant.

  • At this point, the lawyers got involved and sent letters back and forth about whether the MVN was a requirement under Regulation F and the FDCPA.
  • Finally, the collector filed a lawsuit in Illinois state court, seeking a declaratory judgment that the letter it was using complied with the FDCPA.
  • The defendant removed the case to federal court, and the plaintiff filed a motion to remand it back to state court.

The ruling: At the end of the day, using the Model Validation Notice is not a requirement under the FDCPA or Regulation F, ruled Judge Sara Darrow of the District Court for the Central District of Illinois. “A debt collector may comply by using a different form so long as the required information is provided in a clear and conspicuous manner,” she wrote.

  • As such, Judge Darrow ruled that the alleged federal issue in the claim “is not substantial enough” to warrant keeping the case in federal court and granted the plaintiff’s motion to remand the case back to state court.

Check Also

Settlement Offer, Tradeline Deletion Mention in Letter Leads to Class Action Against Collector

EDITOR’S NOTE: This article is part of a series that is sponsored by WebRecon. WebRecon identifies serial …

Leave a Reply

Your email address will not be published.