Credit Reporting Does Not Trigger 1692g(A) Notice Requirements

A Better Understanding of Overshadowing Under the FDCPA

Frankel Rubin received a very favorable decision in the case of Katina Perry v. Trident Asset Management, LLC, 4:14-cv-01004, from Judge Mensah of the United States District Court for the Eastern District of Missouri, Eastern Division.

Plaintiff alleged that Defendant violated 1692g(a) by failing to send a validation notice after credit reporting. The Court reaffirmed the holding in Edeh v. Aragon Collection Agency, LLC, rejecting the argument that reporting a debt to a credit reporting agency is an “initial communication with a consumer” for purposes of Section 1692g(a). Judge Mensah stated that if Plaintiff’s argument would be accepted, it would essentially read “with a consumer” out of the statutory language and would require a debt collector to send a validation notice within five days of making any communication regarding a debt, if there is some chance that the consumer might eventually learn about the communication. The Court emphasized that Plaintiff is mistaken in relying on the phrase in Edeh v. Midland Credit Mgmt., Inc., which holds “reporting a debt to a credit reporting agency constitutes debt collection activity within the meaning of the FDCPA”, because the issue is “not whether reporting debt is a “communication” or “debt collection activity,” but rather whether it is a “communication with a consumer” which would trigger § 1692g(a)’s validation notice requirements. Plaintiff cites no cases finding that reporting to a credit agency is a communication with a consumer, and the Court has found none.”

Additionally, the Court drew a bright line regarding what is considered a demand for payment during collection calls. The Defendant was asked by Plaintiff in a telephone call “is there a deadline when I have to have this paid by”, to which Defendant responded “No.You can just begin making monthly payments to the debt. You can do that at our website or by sending us a money order”. Plaintiff alleged that Defendant overshadowed her dispute rights in violation of 1692g(b). The Court disagreed. “..[I]n contrast, courts have found no overshadowing where the debt collector requests payment but does not indicate that payment must be made before the expiration of the 30-day dispute window described in the validation notice. …Here, as in Founie (Founie v. Midland Credit Mgmt, Inc.) and Riess (Riess v. Messerli & Kramer, P.A.), Defendant invited Plaintiff to make payments, but it did not demand “immediate” payment, did not specify a deadline for payment within the 30-day dispute period, and did not threaten negative consequences if payment was not made within the 30-day dispute period .”

Please click on the link below for a full copy of the Court’s Opinion.

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