Tuesday, May 02, 2006

consumer - debt collection - failure to dispute debt doesn't "verify" it

Nelson v. Select Financial Services, Inc. - ED Pa. - April 28, 2006


A debt collector's letter which states that the debtor's lack of response to the intial collection letter "verifies the validity of this debt" was held to violate sec. 1692e of the Fair Debt Collection Practices Act, which prohibits "any false, deceptive, or misleading representation in connection with the collection of any debt."

Applying the "least sophisticated debtor" standard, the court found that the letter "falsely represented to [the debtor] that her inaction definitively confirmed the authenticity of the debt, in violation of Sections 1692e and 1692e(10)."

The court noted the difference between (a) the statutorily-required language that a debt "will be assumed to be valid by the debt collector" unless disputed by the debtor within 30 days and (b) the statement that the debtor's lack of response an intial collection letter with such a "will be assumed" notice verifies the debt.