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DISCLAIMER: This article is based on a complaint. The defendant has not responded to the complaint to present its side of the case. The claims mentioned are accusations and should be considered as such until and unless proven otherwise.
Before Regulation F went into effect two years ago, the validation period was fairly straightforward — an individual had 30 days after receiving the initial communication to dispute all or a portion of a debt. When Regulation F went into effect, though, the Consumer Financial Protection Bureau opted to require collectors to provide an actual date on the Model Validation Notice that consumers had to dispute a debt. Rather than trying to count 30 days into the future, a consumer now knew by what date he or she had to file a dispute or validation request.
What happens when those two worlds collide? Sometimes, it leads to a class-action lawsuit, as is the case here. A consumer is accusing a collection operation of violating the Fair Debt Collection Practices Act by overshadowing the validation deadline with a settlement offer that includes a disclosure informing the plaintiff that the offer does not affect his right to dispute the debt and seek validation during the 30-day window “as described above.” What is included above, though, is an actual date on which the validation period expires.
The Notice: The validation notice sent by the defendant — dated 03/24/23 — is a form of the Model Validation Notice, but not an exact replica. Under the section “How can you dispute the debt?” the notice informs the plaintiff that he has to call or write by 05/03/23 to dispute all or part of the debt.
The Offer: Further down in the notice, the plaintiff is informed that the creditor has authorized the defendant to resolve the account for 50% of the total balance. After informing the plaintiff that it was not obligated to renew the offer, the notice says, “This settlement offer does not in any way affect your right to dispute this debt and request validation of this debt during the 30 days following your receipt of this letter as described above.”
The Claim: The issue, according to the lawsuit, is the discrepancy between one part of the notice saying the consumer had until May 3 to dispute all or part of the debt or seek validation and another saying that he had 30 days to do so. Those two dates are not the same, the complaint alleges, leading the settlement offer to overshadow the validation notice.
